Seistan was one of the important ancient urban centres in south eastern Persia. The ruins of the city show the prosperity and fertility of this city to the extent that a British civil officer considered it as the ancient London of Asia. This article attempts to describe the enormous latent wealth of this ancient city which made it important for strategic, political and commercial reasons. Due to strategic importance, it fell into the power struggle of 19th and 20th century especially between British and Russia. This power game was the main reason of the poverty of the peasant of Seistan. East India Company had extensively taken Seistan as the major point for its trade after its penetration in Afghanistan and likewise Russia’s penetration in the Central Asia. Western penetration in Seistan had already started in 1809. When Samarqand was annexed in 1867, the British raised the question of establishing neutral zone between Britain and Russian in Central Asia. In 1872 thus, Seistan was divided between Afghanistan and Persia. Government of India had proposed building a new trade link between Quetta and Seistan, just to establish the supreme interest of Britain in those parts of Persia bordering Baluchistan. In the later half of the 19th century, the whole policy of the British government was to capture the strategic locations to further its economic interest, which are evident from the official and non-official records. With this evil intention and local power struggle, the richness and fertility of Seistan was destroyed and local peasantry faced dire straits.