India and Pakistan agree to hold more talks:

As predicted, the prime ministers of India and Pakistan agreed during a meeting in Bhutan that their countries should hold further talks to try to repair relations strained since the 2008 Mumbai attacks.  Foreign secretary Nirupama Rao told reporters at a regional summit in Thimphu that Prime Minister Manmohan Singh and his counterpart Yusuf Raza Gilani had decided their foreign ministers and foreign secretaries (the top diplomats) should meet as soon as possible.

In agreeing to hold more talks, India and Pakistan have overcome the first major obstacle in the way of better ties – the question of what form their dialogue should take. Pakistan had been insisting on a resumption of the formal peace process, or Composite Dialogue, broken off by India after the attack on Mumbai which it blamed on the Pakistan-based Lashkar-e-Taiba militant group. India had been seeking a way back into talks which stopped short of a full resumption of the composite dialogue.

The prime ministers, who last met in Egypt last July, appear to have sidestepped that problem by agreeing to hold dialogue on all issues, without specifically labeling this as the Composite Dialogue (which incidentally is meant to cover all issues.)

Having dealt with the form of their talks, the hard parts – issues of substance – now lie ahead.

Any easing of tension between the two countries is unlikely to have any immediate impact on the U.S.-led war in Afghanistan, where India and Pakistan have been rivals for influence for decades. Pakistan had already moved significant numbers of troops last year from its Indian border in the east to fight Pakistani Taliban militants on its western border with Afghanistan during a brief thaw between the two nuclear-armed countries last summer. According to a Pentagon report released this week, it may have redeployed as many as 100,000 troops from east to west. But that means it is unlikely to redeploy any more right now, particularly given its concerns at what it sees as an Indian military build-up on its eastern boarder.

But the talks between India and Pakistan could ultimately pave the way for a scaling down of the proxy war which the two countries’ intelligence services have been accused of waging in Afghanistan. Over time, that will have a major impact on Pakistan’s willingness to tackle the Afghan Taliban and force them to the negotiating table. (Pakistan’s fight against militants so far has been concentrated on tackling the Pakistani Taliban on its border with Afghanistan rather then those fighting U.S. led forces in Afghanistan.

Pakistani officials complain that India is using its presence in Afghanistan – which grew substantially after the fall of the Pakistan-backed Taliban government in 2001 – to destabilize Pakistan.  They say India’s Research and Analysis Wing (R&AW) is giving money and weapons to Baluch separatists in Pakistan’s Baluchistan province. They also argue that R&AW agents are indirectly destabilizing Pakistan’s tribal areas on the Afghan border by providing funding to militants via Afghan’s NDS intelligence service. India denies the accusations and has so far refused Pakistani demands that it close down its consulates in the Afghan cities of Kandahar and Jalalabad near the Pakistan border.

Afghanistan has been a haven for years for proxy wars between rival intelligence agencies, often working with little real oversight from national capitals, so it is hard to work out exactly what is going on.  What is clear, however, is that whenever you ask a Pakistani official or diplomat about Pakistan’s cooperation with the United States in Afghanistan, they will invariably tell you that they expect in return that the country's security interests vis-a-vis India are met.

With its arrest of Taliban commander Mullah Abdul Ghani Baradar, Pakistan has demonstrated it is in a uniquely powerful position to bring the Taliban to the negotiating table – making it for now the favored ally of the United States over India. Crucial to watch, therefore, in the months ahead will be whether Pakistan makes headway in its demands for a scaling back of India’s presence in Afghanistan, as the price for its cooperation on bringing the Afghan Taliban to heel. India in turn is unlikely to give much ground on Afghanistan unless it believes it will win concessions elsewhere, either from Pakistan itself or from the United States.

But the battle over Afghanistan, for all its complexities, is the easiest of the issues for the two countries to resolve. In theory, both have a mutual interest in a stable and neutral Afghanistan which neither threatens Pakistan nor is used as a haven for militant groups targeting India.  On paper, both countries have an opportunity to narrow their differences. And while the huge trust deficit between the two usually makes any progress on any subject extremely difficult, their row over Afghanistan is pragmatic rather then existential.

Where it becomes much more emotional between India and Pakistan is the dispute over Kashmir, which goes to the heart of both countries’ identities.  As an Islamic country, Pakistan has always considered Muslim Kashmir should have naturally been part of its territory after partition in 1947; as a secular country, India will not tolerate any territorial changes based on religion. And while India and Pakistan made progress in resolving their dispute over Kashmir in 2007,  you can find plenty of people who are cynical about whether a deal worked out between Indian Prime Minister Singh and former Pakistan President Pervez Musharraf would ever have worked.  And significantly, the civilian government which took over from musharraf has virtually disowned it.

Adding fuel to the fire is a row over the role of the Lashkar-e-Taiba, which according to those I spoke to in Pakistan, is unlikely to be disarmed any time soon. Officials say Pakistan cannot risk taking on the Punjab-based militant group while its army is fighting the Pakistani Taliban in the tribal areas. Those who do not speak for the government or the security services give both that reason and another – why should Pakistan disarm a group which is fighting for what many Pakistan see as the liberation of Kashmir?

Last, but not least, is a dispute over dwindling, and erratic, water supplies as the Himalayan glaciers which feed rivers in both countries melt, and growing populations in both countries use up more and more water for irrigation.  This is perhaps the most troubling row since it is the one that both countries have least control over. Yet both will be more inclined to blame the other rather than the force of nature or global warming. (For a reality check, do get hold of a copy of this report published in 2005, which predicted that water would become an issue in 2010.)

Compared to the power of the Himalayan and Karakoram rivers; or indeed to the bitter identity-driven debate over Kashmir, the battle for influence between India and Pakistan in Afghanistan looks comparatively simple. If the Thimphu thaw between India and Pakistan leads anywhere, I’d probably expect to see it in Afghanistan first.