Gilgit–Baltistan is the northernmost territory of Pakistan. It borders the territory of Azad Kashmir to the south, the province of Khyber Pakhtunkhwa to the west, the Wakhan Corridor of Afghanistan to the north, the Xinjiang autonomous region of China to the east and northeast and the Jammu and Kashmir state of India to the southeast.
Together with Azad Kashmir, it forms part of the disputed Kashmir region, which has been the subject of conflict between India and Pakistan since the two countries' independence and partition in 1947.
Gilgit–Baltistan is an autonomous self-governing region that was established as a single administrative unit in 1970, formed by the amalgamation of the Gilgit Agency, the Baltistan region and the former princely states of Hunza and Nagar. It covers an area of 72,971 km² (28,174 mi²) and is highly mountainous. It has an estimated population approaching 1,000,000. Its capital city is Gilgit (population 216,760).
The economy of the region is primarily based on a traditional route of trade through the historic "Silk Road." The China Trade Organization was the leading economic forum through which most of barter trade activity made a phenomenal change in the general economic outlook of the area, which, being the remotest region under Pakistani control, was neglected for over a quarter of a century. That forum led the people of the area to actively invest and learn modern trade know-how from its Chinese neighbor Xinjiang. The participation of all ethnic groups and the active force behind this activity, the legendary economist of the area Ashraf Khan, brought a great change in the region. Later, the establishment of a chamber of commerce and the Sost dry port(in Gojal Hunza) are milestones. The rest of the economy is shouldered by mainly agriculture and tourism. Agricultural products are wheat, corn (maize), barley, and fruits. Tourism is mostly in trekking and mountaineering, and this industry is growing in importance.
In early September 2009, Pakistan signed an agreement with the People's Republic of China for a major energy project in Gilgit–Baltistan which includes the construction of a 7,000-megawatt dam at Bunji in the Astore District.