The analysis examines the current context of the Kashmir conflict by comparing the states’ perspectives that have emerged from the India-Pakistan dialogue process initiated in 2004. This process has facilitated the adoption of some initiatives (which were unthinkable decades ago) regarding the exchange of people and goods across the Line of Control (the line that divides both sides of Kashmir). But confidence building, for the time being, has neither led to any substantial reduction of the military presence in the whole area nor significantly altered the harsh living conditions of the border communities. The situation is particularly unpredictable in the Indian Kashmir, where a sense of alienation from the central state still prevails among a significant part of the population in the valley. India’s and Pakistan’s thinking on Kashmir is still framed by sovereignty paradigms of territorial control, therefore ideas of converting the Line of Control to a permeable border, without significant political and social changes in the territories affected, might lead nowhere.