Content: Foreword. Preface. 1. Introduction. 2. Understanding texts: Indian theories. 3. Shabdabodha theories and Indian parsing. 4. Sanskrit parsing. 5. Conclusion. Appendices. Glossary. Bibliography. Index. India has a rich grammatical tradition, still extant in the form of Panini’s grammar as well as the theories of verbal cognition. These two together provide a formal theory of language communication. The formal nature of the theory makes it directly relevant to the new technology called Natural Language Processing. This book, first presents the key concepts from the Indian Grammatical Tradition (IGT) that are necessary for understanding the information flow in a language string and its dynamics. A fresh look at these concepts from the perspective of Natural Language Processing is provided. This is then followed by a concrete application of building a parser for Sanskrit using the framework of Indian Grammatical Tradition. This book not only documents the salient pieces of work carried out over the last quarter century under Computational Paninian Grammar, but provides the first comprehensive exposition of the ideas involved. It fills a gap for students of Computational Linguistics/Natural Language Processing who are working on Indian languages using Paninian Grammatical Framework for developing their computational models and do not have direct access to the texts in Sanskrit. Similarly for the Sanskrit scholars and the students it provides an example of concrete application of the Indian theories to solve a contemporary problem.