India and Pakistan - in the failed meeting of their two foreign ministers in Islamabad in mid-July - have agreed to meet once again in December. This can be seen as a 'gain' only if no terrorist intervention rocks the interim. In case of a terrorist strike originating in Pakistan, the just-concluded meeting would be viewed as a lost opportunity. Instead of bridging the 'trust deficit', as intended by the prime ministers as suggested by the Prime Ministers of both countries during their meeting at the sidelines of the SAARC summit at Thimpu, it only reflected the distrust.

The failure indicates that the two sides are not prepared to take the minimum steps necessary to get the other side to move likewise. They now have six months to prepare the ground to do so. Is it possible?

Pakistan's foreign minister is seen in the Indian media as the one to have wrecked the talks. This is being taken as part of a script written in the GHQ, Rawalpindi. The Pakistani military perhaps feels that country is not in a strong position, constrained as it is by the pressures on its internal polity and on the Af-Pak front. Therefore, it is playing for time. It expects it can ride out the risks, given that the US military effort moves towards a climax over the coming autumn. When the position gets clearer and hopefully better by end of the year, it would be better placed to weigh its cards.

India insists on visible proof of Pakistani sincerity in acting against the handlers of the 26/11 terror attack.

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In any case its grand strategy is to ride out the US intervention in the region without having to sacrifice its crown jewels in terms of the India, Kashmir, Afghan and nuclear policies. It also would not like the civil government to take credit for any useful movement on the India front, lest it upset the internal balance in its favour.

India for its part had nothing to offer at the talks. The talks process is ongoing through repeated meetings of leaders, even if consequential talks in the form of the composite dialogue are on hold. The latter, though an Indian idea, perhaps no longer serves India's purpose since it believes that the growing power asymmetry with Pakistan is making its position stronger. While it is pledged to talk, it is not pledged to take the talks process to an outcome acceptable to both. Since a composite dialogue implies timelines, concessions, and outcomes, India is quite happy to postpone this reckoning.

India therefore continued to insist on visible proof of Pakistani sincerity in acting against the handlers of the 26/11 terror attack. The UPA government, already on the defensive due to 26/11, inflation, Maoism etc. is in any case susceptible to right wing critique. Within itself too there appears to be a lack of consensus, given Home Secretary Pillai's statement on the eve of talks that held ISI directly responsible for the Mumbai terror attack. The Foreign Minister has since accepted that it could have been better timed.

Secondly, Pakistan did stir the pot in Kashmir by bringing disaffected youth out into the streets over the summer in an intifida-like confrontation with authorities. Therefore, there is no urgency to talk to either the internal dissidents or with their sponsors in Pakistan, lest the pressure be viewed as successful to get India to talk.

The talks have been seen as being influenced by the Americans - brought on by the US's need to ease its Af-Pak circumstance. Therefore, even if talks proceeded, meaningful outcomes from them were ruled out, lest Indian interests be sacrificed for US interests. Also, with 26/11, the Indian tolerance threshold has been stretched. Its procedures and organisations for response are considerably better placed. Therefore, seeing itself as capable of handling another crisis, India does not see any necessity for engaging Pakistan.

Lastly, in case Pakistan does succumb to Indian demands, then going after its home grown terrorists would result in an introspective Pakistan. A weaker Pakistan with an internally embroiled Army is one India can then manipulate with greater ease.

Both states have thus independently concluded that they would be able to extract better concessions from the other at a later date. Is this justified? In case of Pakistan, the Army would not like to take on terrorists on multiple fronts simultaneously. Therefore, it does not want to aggravate its ties with its anti-India proxies while it takes on the other terrorist formations such as the Tehrik e Pakistan. By not taking on the anti-India terror groups, Pakistan may be able to demand that they exercise self-restraint to keep India placated, till it is able to discern the end game on the AfPak front. Waiting seems strategically appropriate.

India, not having anything to concede and with prospects of continued accretion in power into the foreseeable future, can afford to wait. The risk of another attack is taken as acceptable in relation to the political losses to be incurred by engaging Pakistan meaningfully. India has not taken any action in moulding public opinion towards the need for talks and concessions - clear evidence that of its 'wait and watch' strategy.

Both states are therefore acting in accordance with their respective strategic logic. Progress in December would be predicated on how the situation develops in Af-Pak. This impasse in South Asia has an underside. Firstly, are the two states underestimating prospects of another terror attack and possible escalation into an inter-state war thereafter? The linkage of terror directly with the ISI, seconded by the NSA Shiv Shankar Menon at a seminar in New Delhi, could yet come back to haunt the government in case of another provocative action by terrorists. It would then not be able to make a distinction between the Pakistani state and the non-state actors that could help buffer its response. The government, already proven weak in its ability to take talks ahead meaningfully, would not be able to resist calls for extreme steps.

Secondly, the newly framed Multidimensional Poverty Index has half the world's poor living in South Asia. The recent survey by the Oxford University and the UNDP indicates that just eight Indian states have more poor people than 26 poorest African countries combined. This yardstick calls for a revision of strategic priorities and gameplan. The Sonia Gandhi-led NAC needs to provide right-headed direction to a grand strategy for UPA II, as it had done in UPA I.

Lastly, while Pakistan's position can certainly get weaker, it does not imply that India is necessarily the gainer. The talk of Pukhtoonistan, emanating lately in hardline US circles and finding echo in the conservative sections of Indian strategic community, can only be a pressure point at best. As a self-regarding regional power, India needs to be in charge. Assisting a neighbour going downhill is an indicator of power alright, as was the case in 1971. But are there better indicators and is this in India's self interest? There is much more to do before December than merely avoiding war.