This article highlights the current relevance of cultural diplomacy not as a panacea for the problems in India’s relations with its South Asian neighbours but as a way of dealing with the dilemma it faces. Against the backdrop of India’s position in South Asia and the importance of the region, the article makes an estimate of cultural diplomacy. Furthermore, it emphasises the need for redefining and reshaping India’s cultural diplomacy not as a means of increasing its own influence but with a view to furthering the prospects of regional cooperation and thereby helping the process of peace-building in the region.