The speaker of the poem has received a postcard which someone has sent from his homeland of Kashmir. The first line refers to Kashmir's shrinking into the poet's mailbox. What the speaker means by this is that the immense grandeur of Kashmir has been diminished, reduced to the status of a small photo ("my home a neat four by six inches") on the little postcard he holds in his hand.
Kashmir is the northernmost geographical area of the Indian sub-continent. It is renowned for its deep valleys and gorges, steep hills, and tall, impressive mountains. Indeed, the world-famous Himalayas stretch across to Kashmir in the Western part of its range. Yet even the mightily impressive Himalayas have been been reduced by their inclusion in the little photo on the postcard:
Now I hold the half-inch Himalayas in my hand.