Nepal has found the second spot after Bhutan as the most peaceful country in South Asia in the latest Global Peace Index (GPI) released late on Tuesday.

The study, conducted by the Australia and US-based Institute for Economics and Peace (IEP), has ranked Nepal in the 80th place after Bhutan among the 158 nations it took into account.

While India figures much behind, in the 142nd position, Sri Lanka, Bangladesh and Pakistan have been ranked 103rd, 91st and 149th among the countries respectively.

Bhutan tops in South Asia in the GPI with the 19th position, while China has slid in the peace index, standing 89th as against the 80th position last year.

According to the report, deaths related to internal conflict, displaced people, weapons export, heavy weapons, armed service personnel, death from external conflict, weapon imports and jailed population have declined in Nepal.

The report also claimed that the world was more peaceful in 2011 as powerful nations had austerity-driven defence cuts.

The survey studied 23 indicators across 158 countries, ranging from measures of civil unrest and crime to military spending, involvement in armed conflict and relations with neighbors.

Aside from the deterioration in the Middle East, every other region in the world showed at least some improvement.

In Asia, despite worries over a growing arms race and geopolitical rivalry between China and the United States, the overall defense spending appeared roughly flat and conflict slightly down.