karan.1970
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You are right, India has certainly been increasing support for terrorists etc. in Baluchistan. However, from what I have gathered in discussions with officers - in particular a Brigadier stationed in Quetta - the situation has normalized over the last year+. The 'key' fomentors have been neutralized and the very substantial recent economic package for Baluchistan has allowed the administration to prevent the 'miscreants' from leveraging the local population in any significant way.
On the other hand, I think the relative stability in J&K was only achieved after Pakistan and India went down the talks route in the Musharraf era and Pakistan exercised its influence to stabilise things across the LoC. Given that this period of calm coincided with an increase of foreign support for insurgents in FATA and some parts of Baluchistan, I think many in the Pakistani establishment are of the view that the gloves might as well be taken off.
Also, logistically, I think it will become well nigh impossible for support to be provided to anti-state elements in Baluchistan and FATA once the Afghan situation has sufficiently progressed in the direction it is going in. Pakistan will calculate most likely, that the ability for 'pressure' to be exerted on it in Baluchistan and FATA is going to be significantly lessened in the emerging Afghan scenario...
Its a matter of debate whether Pakistan was actually reducing tensions in J&K or was it the result of being otherwise occupied in FATA etc. Whether that occupation was due to India cranking up pressure or was more indegenous, is something which is again pretty speculative. However in my view, the situation in NWFP is far from over and is more on lines of USA's declared success in Afg some 5 years back.
From an Afg perspective, India has zero exit barrier. If the situation goes down the way Pakistan is hoping for, the cost to India is negligable (some $1 billion of investment). However on the other hand, if it does not go down that way, Pakistan will be in a spot of trouble to say the least.. And if India decides to continue with the approach of morally supporting Balochistan, there can be multiple replacements for Afg..
Same applies to the IWT. India today holds the cards and can dance around the provisions of the treaty and its legal modalities till decades to come.
In my view, the GoI is also not too much in favor of open talks and is doing this for optics only and will use the above cards to to try and get Pakistan move from its stand on Kashmir.
I think the Indian establishment decided to take off the gloves after 26/11.
One thing is for sure though. There is a lot of hurt in the near future for common folks in India and Pakistan while the 2 states will try and turn the screws on each other