India, Pakistan and Kashmir: Stabilising a Cold Peace

When the third round of the normalisation talks concludes in July 2006, India and Pakistan will be no closer than when they began the process in February 2004 to resolving differences, including over Kashmir. What they call their “composite dialogue” has helped reduce tensions and prevent a return to the climate of 2001-2002, when they were on the verge of all-out war, but progress has been limited to peripheral issues. India’s prime minister, Dr Manmohan Singh, and Pakistan’s president, General Pervez Musharraf, have reiterated commitments to sustain the dialogue. It is unrealistic, however, to expect radical change. International, particularly U.S. support for the process will likely dissuade either side from pulling out but asymmetry of interests and goals militates against a major breakthrough. The need is to concentrate on maintaining a cold peace until a long process can produce an atmosphere in which the support of elected governments in both states might realistically bring a Kashmir solution.

The situation in the former princely state is far from stable. In 2004, violence in Jammu and Kashmir (J&K) diminished somewhat but it is again on the rise, amid concerns that it could reach earlier levels with Pakistani support, particularly since the two countries’ priorities remain at odds. Pakistan’s military government has urged India to reach a solution on Kashmir; Indian decision-makers instead stress the prior need to create an environment conducive for a stable peace, which would help, in the longer term, to resolve the issue. Should the Pakistani generals, impatient with the pace and directions of the talks, attempt to pressure India through accelerated support for cross-border militancy, the fragile normalisation process could easily collapse.

Within Jammu and Kashmir, the relative decline in violence has helped stabilise the economy, and tourism is again flourishing in the valley. With the assistance of international agencies such as the Asian Development Bank, the Indian government is undertaking development projects in the cities. While the human rights situation has improved in urban centres, including J&K’s district capitals, it has yet to change in the countryside, fuelling Kashmiri resentment, particularly in the valley. Human rights violations are inevitable so long as there is a heavy presence of security forces. Although India attributes this presence to militant violence, it should reassess and reduce it to prevent the militants from exploiting Kashmiri alienation.

India and Pakistan should also involve in their talks Kashmiris on both sides of the Line of Control (LOC) and from all shades of opinion. New Delhi has initiated a process of consultation with moderate factions of the separatist All Parties Hurriyat Conference (APHC); Islamabad should consult all shades of Kashmiri opinion, including pro-independence, in Azad Jammu and Kashmir (AJK). Kashmiri participation would make the process more meaningful, particularly in the context of confidence building measures (CBMs). Had Kashmiris been consulted in devising the modalities of CBMs such as the Srinagar-Muzzafarabad bus line, India and Pakistan would have won Kashmiri goodwill, and implementation hitches could have been ironed out.

It is in the interest of both states to remove hurdles to the normalisation process. Pakistan must end material support for militancy in Kashmir if regional peace is to be assured. Both sides would save the lives of their soldiers and neutralise Pakistani spoilers by agreeing to resolve the dispute over the Siachen Glacier. Above all, they need to end the cycle of mutual recriminations and prove to Kashmiris that they value their welfare over narrow interests. Such an approach would help stabilise a fragile cold peace.

International, in particular U.S., support is essential to sustain and consolidate the normalisation process. The international community should:

q              press Pakistan to end all material support to the militants in Kashmir, while conditioning its military and non-development assistance on a complete end to cross-LOC infiltration; and

q              provide technical assistance for monitoring technologies and verification procedures to facilitate an agreement on the Siachen Glacier, where both countries have an interest in disengaging troops but progress is blocked by the lack of trust.

For their part, New Delhi and Islamabad need to:

q              sustain the normalisation process by stabilising the ceasefire on the LOC through a gradual reduction of troops and by implementing CBMs such as regular meetings between local commanders; and

q              remove administrative impediments to implementing Kashmir-specific CBMs such as cross-LOC communication and trade links; identify additional measures in consultation with Kashmiri stakeholders on both sides of the LOC and ensure Kashmiri participation in their dialogue process.

This briefing, which updates previous Crisis Group reporting,[1] assesses India and Pakistan’s normalisation process, with emphasis on the Kashmir issue. It identifies challenges and suggests ways in which the two countries could take the process forward, thus stabilising their relationship and reducing the risk of war.

Since February 2004, when the composite dialogue began,[2] India and Pakistan have taken a number of positive steps. The November 2003 ceasefire along the LOC, which ended armed hostilities after thirteen years, still holds. On 7 April 2005, a bus line between Srinagar, the capital of Jammu and Kashmir (J&K), and Muzzafarabad, the capital of Azad Jammu and Kashmir (AJK) was re-established, allowing divided families to meet for the first time since 1956. After the 8 October 2005 earthquake in AJK, India and Pakistan agreed to open the LOC at five points to facilitate the provision of humanitarian assistance as well as meetings between divided families. In May 2006, agreement was reached to open the LOC to trade by launching a truck service on the Srinagar-Muzaffarabad route, as well as a second cross-Kashmir bus service, linking Poonch in J&K with Rawalakot in AJK.[3]

Additional rail and road links have been reopened across the international border between the two countries. These include a bus service linking Sikhism’s holiest city, Amritsar in India, with Nankana Sahib, the birthplace in Pakistan of Sikhism’s founder; and a railway link between Pakistan’s Sindh province and India’s Rajesthan state. Bilateral trade has resumed through Wagah, at the international border. Agreement has been reached in principle to restart shipping routes. The Joint Economic Commission and Joint Business Councils have been reactivated, and cooperation in the petroleum and natural gas sectors is being explored.

The declared intentions to sustain the process are also promising.[4] But the trust and goodwill essential for resolving more contentious issues is absent. Differences over the use of river waters flowing from Jammu and Kashmir still bedevil bilateral relations, and the composite dialogue has yet to make progress on resolving such disputes as those over the Siachen Glacier and Sir Creek. Nor have the two sides narrowed their differences over Kashmir.

India and Pakistan stand to gain, politically and economically, from a stable peace but it is yet to be seen if their policymakers understand that armed conflict, conventional or by proxy, would not advance their national interests. To be sure, neither side has opted out of the normalisation process. Pakistan’s military leadership is well aware of international, particularly U.S., support for a process that reduces the risk of war between the nuclear-armed neighbours. India wants a viable and acceptable solution not only to escape the domestic spill-over effects of instability in Kashmir but also because it would help it to obtain the regional and global status commensurate to its size and potential. Yet neither side is willing, as yet, to move far from past positions.

President Musharraf insists that his government is willing to “think outside the box”[5] but his proposed solutions echo Pakistan’s long-standing insistence on a change in Kashmir’s territorial and constitutional status quo and its refusal to accept the LOC as the international border. Belying his rhetoric of involving the Kashmiris as an equal party in negotiations with India on the subject, the president-cum-army chief has insisted on driving the process on his own, excluding all civilian institutions and actors in Pakistan and Pakistan-administered Kashmir, including the national and AJK parliaments and political parties.

Unsurprisingly, Musharraf’s proposals have not found a receptive audience in India, where policymakers are averse to any change in J&K’s territorial and constitutional status.[6] New Delhi would be far more likely to accept a settlement that would transform the LOC into an international border. It wants terrorism eradicated from Kashmir but can live with a situation similar to the one that prevailed before 1989 when the insurgency in J&K began. Prime Minister Manmohan Singh’s approach focuses primarily on tackling the domestic sources of Kashmiri alienation through economic development and improvement of the human rights situation, along with greater autonomy for J&K and increased interaction between Kashmiris on both sides of the LOC.

The Indian government has reopened a dialogue with Kashmiri mainstream leaders and moderate factions of the separatist alliance, the All Parties Hurriyat Conference (APHC). It has also allowed separatist leaders to travel to Pakistan. Yet after more than fifteen years of continued violence, in which almost every family in the valley has suffered losses, India will have to do far more if it is to win over a population that has yet to experience many tangible benefits.

Aside from Kashmir, India and Pakistan also differ over the pace of the normalisation process. India cautions against haste. Emphasising that the process is more important than specific achievements at this stage of the negotiations, Manmohan Singh has stressed: “I really believe that if this process is allowed to go forward, it will create a climate conducive to the final settlement”. [7]

Wanting faster results and more emphasis on the “core” issue, Kashmir, in the composite dialogue, the Musharraf government has expressed its dissatisfaction with the pace and direction of the process, warning that unless Kashmir is settled, the confidence building measures will lose their meaning and peace in the region remain elusive. Insisting that Kashmir is “ripe for resolution”, and the two countries “must address the lingering dispute now”, Musharraf has warned: “Kashmir has been at the heart of conflict in South Asia, which became a nuclear flashpoint a few years back. It was an extremely dangerous solution, closest to the nuclear holocaust since World War”.[8]

Undoubtedly, the resolution of some issues such as the dispute over the Siachen Glacier would pay mutual dividends, by ending a military engagement in which both sides have needlessly lost lives and squandered economic resources that would have been better used to win over their Kashmiri populations. It would also strengthen constituencies for peace in both countries. Should Pakistan’s military hardliners attempt to pressure India again through militancy and violence in Kashmir, however, New Delhi would be likelier to opt out of the process rather than make concessions.

Since Prime Minister Atal Bihari Vajpayee and President Musharraf resumed direct talks on 5 January 2004, a spate of high-level diplomatic exchanges, such as Prime Minister Manmohan Singh and President Musharraf’s April 2005 meeting, have opened new avenues for bilateral relations. The composite dialogue has also helped to improve people-to-people contacts and expand communication links. However, despite declarations of intent, the two sides are still far from a breakthrough on the contentious issues.[9]

A.            Inching Forward

1.             Promoting trust

The normalisation process has helped to reduce the risk of war. A number of measures have been taken to stabilise the ceasefire including a commitment to refrain from developing new posts and defence work along the LOC; monthly meetings between local commanders; and the speedy return of inadvertent line crossers. The dial-up hotline between the directors general (military operations) has been upgraded, secured and dedicated. Other security-related CBMs include agreements on the pre-notification of ballistic missile flight tests and operationalisation of the hotline between foreign secretaries.[10] The two sides have also agreed to abide by the 1991 agreement on air space violations.

Goodwill gestures such as the decision to release all fishermen, as well as civilian prisoners whose national status was confirmed and who had completed their sentences, will help improve the bilateral environment. The decision to allow cross-border trade along the Srinagar-Muzaffarabad route should benefit Kashmiris on both sides of the LOC. Yet these and other CBMs will only be effective if implemented in earnest. For instance, export of fruit from the Kashmir valley to Muzaffarabad and Pakistan has been a longstanding Kashmiri demand. But if administrative constraints block the delivery of perishable goods, they would fuel resentment, just as constraints on cross-LOC travel, including clearances from Indian and Pakistani intelligence agencies, have undermined the effectiveness of that CBM.

2.             Economic ties

India and Pakistan have agreed to enhance economic and commercial cooperation and have reactivated the Joint Economic Commission and Joint Economic Council. They are also exploring the potential for cooperation in energy. Bilateral trade, $161 million five years ago, has passed $1 billion, with an increase of $400 million in 2005 alone. A study by the Federation of Indian Chambers of Commerce and Industry (FCCI) estimates it could reach $5 billion if tariff barriers were removed, rail and road links upgraded, business visa regulations liberalised, and illegal trade, valued at more than $2 billion, regulated.[11]

While the volume of illegal trade is evidence of the demand in both states,[12] political barriers remain the major obstacle to normal trade relations. Rejecting India’s proposals to normalise trade and commercial ties, Pakistan’s military government still links these and other areas of economic cooperation to the Kashmir dispute. While agreeing that economic cooperation can “build linkages and dependencies and build relations”, Prime Minister Shaukat Aziz has stressed that the main hurdle to trade liberalisation is “lack of progress on the Kashmir dispute”.[13]

B.           Resolving Disputes

India and Pakistan lack the political will to tackle even issues where they have far less at stake than Kashmir.

1.             Siachen Glacier

The conflict over the 76-kilometer long Siachen Glacier is not a declared war but dates back to 1984 and is the longest-running between their armies. Both have lost hundreds of lives in that remote and uninhabited region, not to military action but to the harsh climate, dangerous altitude and treacherous terrain.[14] The climate and terrain also make the monetary costs exorbitant.

Given the high human and financial tolls, and because the territory is of little strategic value, India and Pakistan have held a series of negotiations to resolve the dispute, but in the absence of political will these have achieved little, though they came close in 1989 and 1992. At the fifth round of defence secretary-level talks in June 1989, an understanding was reached “to work toward a comprehensive settlement, based on redeployment of forces to reduce the chances of conflict, avoidance of the use of force and the determination of future positions on the ground so as to conform with the Simla Agreement and to ensure durable peace in the Siachen area”.[15] However, this was not operationalised. At the sixth round in November 1992, agreement was almost reached which envisaged mutual withdrawal and redeployment to create “a zone of complete disengagement”. This area would be delineated “without prejudice” to the known positions of either side.[16] No new positions would be occupied in the designated zone nor would any activity, civilian or military be allowed there. But the proposed settlement fell victim again to mutual mistrust.

With relations on the mend, the two sides have observed a ceasefire in the Siachen region since 25 November 2005, although there are periodic accusations of violations.[17] The composite dialogue has made little progress in resolving the conflict, however, and the tenth round of defence secretary-level talks on 24 May 2006 ended in a stalemate.

Pakistan insists that India accept the 1989 understanding for an unconditional, mutual withdrawal to pre-1984 positions.[18] India wants troops positions authenticated and delineated before such a withdrawal and has ruled out a prior pullout, concerned that Pakistan could move into the vacated territory.[19] Pakistan believes India would use the delineation of ground positions before withdrawal to legitimise its claim over the disputed territory.

Despite the mutual desire to end this costly and futile conflict, lack of trust continues to inhibit progress. To overcome this, the two sides could, with international assistance, identify and institute a regime of monitoring technologies and verification procedures, which would enable them to disengage and demilitarise the region with confidence.[20]

2.             Sir Creek

India and Pakistan have failed to agree on delimiting their land and maritime boundaries in the Sir Creek region. Sir Creek runs for 100 kilometres along the Rann of Kutch, a marshy area between India’s Gujrat state and Pakistan’s Sindh province. Pakistan insists that all of it falls within its territory while India claims that the boundary should be drawn in the middle of the creek. The maritime boundary would determine nautical rights over a 300-kilometre stretch of the Arabian Sea, which is potentially rich in oil and gas.

Since both countries are parties to the 1982 Law of the Sea Convention, they have obligations under Articles 76 (in respect of the Continental Shelf), 74 (in respect of the Exclusive Economic Zone) and 15 (in respect of the territorial sea) to reach a negotiated settlement.[21] Although Part XV of the convention provides a formal mechanism for the settlement of disputes, it has yet to be invoked. Bilateral negotiations have been unsuccessful for years. Though a part of the composite dialogue, the issue is no closer to resolution with the two sides merely agreeing, at the end of talks in May 2006, to conduct a joint survey of Sir Creek and the adjoining region.[22]

3.             Waters disputes

Wullar is a lake in the Barramulla district of Indian-administered Kashmir. In 1984, India announced its intention to build the Wullar barrage (also called the Tulbul Navigation Project) on the lake to make the Jhelum River navigable all year. Pakistan argued that any attempt to block the waters of the Jhelum would violate the World Bank-guaranteed 1960 Indus Waters Treaty. India suspended construction in 1987 but has claimed that the barrage would be legal under the treaty and conform to its technical specifications, and it has expressed an intention to resume work at some point.

Pakistan believes India wants to link the project to the 390-MW Kishanganga hydroelectric project and divert the water of Neelum River into Wullar Lake.[23] Apart from concerns about the potential depletion of its lower-riparian water resources, its opposition is fuelled by suspicions that India could misuse its upper riparian status as strategic leverage in the Kashmir dispute.

The Wuller Barrage issue was almost resolved in 1991, when a draft agreement was prepared which would have allowed construction of the barrage conditional on some technical restrictions and monitoring by the Indus Water Commission, established under the 1960 treaty.[24] The agreement, however, was not signed, and the composite dialogue has yet to make any progress on this and other water-related, Kashmir-specific issues such as the Kishanganga Hydroelectric project and the Baglihar dam,[25] also to be constructed in Indian-administered Kashmir.

Although the Indus Waters Treaty contains legal dispute resolution mechanisms, all these issues are highly politicised because they are linked to Kashmir, and hence their resolution depends on the overall health of bilateral relations.

That the normalisation process has not stumbled augurs well for regional stability but the composite dialogue is still in its earliest stages and outside pressures will influence its prospects.

A.            The International Dimension

Two interrelated issues, nuclear proliferation and terrorism, have played a key role in India and Pakistan’s decision to initiate the normalisation process and will likely shape its direction. Pakistan has conducted a proxy war in J&K since the early 1990s, using Kashmiri and Pakistani militants, many from jihadi organisations, to undermine India’s control in the territory and tie down its forces there. The dangers of that strategy came to the fore during the Kargil conflict of 1999, and again in 2001-2002. On both occasions, the two states were on the verge of a conventional war that could have escalated to the nuclear level. Kashmir, in the perceptions of influential external actors, including the U.S., could no longer be considered a regional issue, with few or no wider consequences.

In 1999, Army Chief General Pervez Musharraf (he was not yet president) led a limited military operation, infiltrating several hundred Pakistani soldiers and jihadis into the Kargil region across the LOC, in the belief that Pakistan’s nuclear weapons capability would prevent India from escalating to a full-fledged conventional war.[26] Indian decision-makers, however, believed that it was possible to fight a limited conventional war against their nuclear-armed adversary. [27] Concerned that the conflict could escalate to the nuclear level, the U.S. pressured Pakistan to withdraw its regular forces and their jihadi supporters.[28]

The nuclear and terrorism factors also came into play in the 2001-2002 crisis. Following the December 2001 terrorist attacks on the Indian parliament, New Delhi mobilised along the LOC as well as the international border with Pakistan. Once again, the nuclear risk was high, and the international community, spearheaded by the U.S., intervened to persuade India to refrain from using force and to pressure Pakistan to end its support for terrorists operating across the LOC.[29]

More generally, since the watershed 11 September 2001 terror attacks in New York and Washington, the U.S. has increased its pressure on Pakistan’s military government to end its proxy war in Kashmir and to resolve its differences with India peacefully. However, Pakistan’s participation in the U.S.-led “war on terror” has somewhat eased that pressure, allowing its military rulers to make a tactical, as opposed to a strategic shift in their Kashmir policy. Lacking domestic legitimacy, President Musharraf cannot afford to opt out of the composite dialogue, since he is well aware that the withdrawal of international, particularly U.S., support would undermine his standing with his military constituency and embolden the civilian opposition. His changed rhetoric towards India is also meant to persuade his international allies that he and the military alone can guarantee regional peace.

Short of a major crisis in its relations with Pakistan, triggered, for instance, by a major terrorist attack, India, too, is unlikely to withdraw from the normalisation process. It is motivated by the desire to be seen internationally as a responsible regional power exercising restraint in its dealings with Pakistan despite considerable provocation.

Yet, the desire on Pakistan’s part to ease external pressure and retain international support and on India’s to project a positive image is insufficient to produce bilateral concessions. Absent the necessary political will, the two countries are unlikely to depart drastically from their long-standing positions on Kashmir. And domestic factors will play a major role in the decisions of both whether to maintain the status quo or move the process forward.

B.           The Domestic Dimension

1.             Pakistan

More than two years into the composite dialogue, Pakistan’s official position on Kashmir remains unchanged: the former princely state is disputed territory; India is in unlawful occupation of Jammu and Kashmir; Kashmiris should have the right, in accordance with UN resolutions, to accede to either India or Pakistan through a free and impartial plebiscite.[30] Pakistan believes that, given the opportunity, a majority would vote for accession to it. A corollary in Pakistan’s view is that deprived of the right to self-determination and repressed by India, Kashmiris are entitled to revolt against New Delhi’s rule.[31] Although Pakistan officially (and unconvincingly) denies providing more than moral and diplomatic support to the militants, many hardliners believe that without the insurgency, the issue would have become obsolete.[32]

To persuade the international community that Pakistan has abandoned its proxy war and supports a peacefully negotiated settlement, President Musharraf has put forward a number of proposals identifying potential options. Dropping Pakistan’s insistence on the old UN resolutions calling for a referendum on accession of the former princely state to either Pakistan or India, he has called on New Delhi to join him in thinking “beyond the box” on Kashmir.[33] In a press interview in October 2004, for instance, he proposed a three-phase formula for the three parties – Pakistan, India and Kashmiris. In a first phase, seven regions would be identified, along ethnic and geographic lines, in the former princely state. These would be demilitarised in the second phase and their legal and constitutional status would be determined by mutual consensus in the third and final phase. This could take many shapes, said Musharraf, including options such as a condominium, UN control or any other agreed formula.[34]

Examined more closely, these proposals are neither flexible nor a radical policy departure. There is no renouncement of territorial claims over Kashmir, and Pakistan continues to reject J&K’s status under the Indian constitution. More significantly, the military government has not ended support for Pakistan-based jihadi organisations such as Lashkar-e-Tayyaba and Jaish-e-Mohammad, responsible for much of the violence in J&K.

Musharraf’s concessions on Kashmir are understandably restricted to rhetoric. Unlike former prime ministers Benazir Bhutto and Nawaz Sharif, who had the backing of their domestic constituencies for reconciliation with India, Musharraf’s only constituency is a military establishment that is deeply hostile to India and retains the belief that a proxy war in Kashmir is the only way to pressure it into making concessions on vital areas of national interest.

2.             India

India’s official position also remains unchanged. Even if New Delhi now concedes that there is a Kashmir “issue” and has accepted its inclusion in the composite dialogue, it does not accept that it amounts to a territorial “dispute”.[35] In Indian perceptions, the former princely state of Jammu and Kashmir is an integral part of the Indian Union, the areas under Pakistan’s control are illegally occupied, and Pakistan remains responsible for an insurgency which would die down if that support were withdrawn.

There is consensus among Indian political and policy and opinion making circles that J&K’s territorial and constitutional status is non-negotiable. India would at the most be willing to give Kashmir maximum autonomy within constitutional bounds. “I recognise that there are many views and perceptions”, said Prime Minister Singh at a roundtable on Kashmir in Srinagar. “There is need to evolve a common understanding on autonomy and self-rule for Jammu and Kashmir, and I am confident that working together with all groups, both inside and outside the mainstream, we can arrive at arrangements within the vast flexibilities provided by the Constitution”.[36] New Delhi would also be willing to revise the 1994 Parliament Resolution claiming Indian sovereignty over Pakistan-administered Kashmir.[37] However, given the domestic sensitivity, the government would first have to prepare public opinion and then obtain bipartisan parliamentary support. This would be unlikely if militant violence continued unabated.

There is, however, also a growing domestic consensus for peace with Pakistan, since regional instability is seen to hamper India’s efforts to gain international recognition as a major power. This is reflected in the continuity in Indian policy, with Congress Prime Minister Manmohan Singh largely following the line initiated by his Bharatiya Janata Party predecessor, Atal Behari Vajpayee. However, hardliners within the bureaucracy oppose any unilateral concessions in the composite dialogue. Their influence on the process depends on the state of militancy in Kashmir, since an upsurge of violence would be used to justify a tougher line towards Pakistan.

While continuity mostly characterises India’s Kashmir policy, there are also some signs of change. Prime Minister Singh has, for instance, refused to redraw Kashmir’s borders but has also offered to soften them in the interests of peace. Proposing a “Treaty of Peace, Security and Friendship” to Pakistan, Singh said: “Borders cannot be redrawn but we can make them irrelevant”.[38] India’s willingness to soften the LOC, however, would also depend on the intensity of cross-LOC attacks and violence in J&K.