"If Kashmir issue is resolved then there would hardly be a reason to fight."
As much as I'd like to think this is possible, it's not gonna be that easy.
Of course it's not gonna be easy...but other than 1971 the two countries have only fought with Kashmir being the central issue.
At least on Pak's side...Pak has shown that it can coexist with its neighbors.
- Iran: Despite close relations with Arab nations(who vehemently oppose Iran)...Pak has kept a careful balance...there is no dispute with Iran(like Kashmir)...so its more of a live and let live kind of relationship at the very least
- China: Large neighbor(similar to India in terms of large area/population). Peaceful relations. They even worked out Kashmir issue between them...after that neither violated the others Kashmir regions.
The only two countries where there is a problem are India and Afghanistan...
- Afghanistan: this too wouldn't have been any different than the other neighboring countries like Iran/China...but Afghanistan in its own greed/ambitions has been against Pak since Pak's creation. They have laid claim to Pak's KPK/Balochistan area in order to try and get more territory and access to the sea even though Pak as a successor to British India inherits previously made agreements(Durand Line). They tried to create unrest and separatist movements...etc. and yet still Pak gave refuge to a huge number of Afghans.
- India: well we both know why there are tensions...it is a continuing legacy of the horrors and massive killings that occurred during partition...and Kashmir. Though time heals all...and the hatred can be overcome with efforts from both sides. First it requires that no issue of contention(like Kashmir) remains. Worst case scenario is at the very least a Pak/Iran kind of relationship can occur in the absence of disputes like Kashmir.
If anything since Pak/India share similarities in culture/languages/etc. it can be more than a Pak/Iran kind of indifferent relationship.
...but it goes without saying that it would require efforts from both sides.
I know how Pak Army is demonized in Indian media that PA would never let Pak gov try to work towards a lasting peace with India...but that's simply not true. Why is PA not creating any issues with other neighbors like Iran/China? It is merely a speculative baseless "reason"(for not achieving peace) that is often presented by Indians whenever a solution to Kashmir is hypothetically brought up.
I've even heard that "if peace with India was achieved then PA would be out of a job and they wouldn't be able to fill their pockets through kickbacks and what not"...
That above reason is again dumb. There are plenty of countries that maintain standing armies despite not having any major threats. Secondly even if peace with India is achieved...its not gonna be like both countries are gonna be singing and dancing together hand in hand. Peace doesn't automatically mean trust/better relations. So even if peace is achieved today it would take decades before trust is restored and relations get better. So PA would still have a job to defend the country against any potential threats.
In short...yes u r right...it wouldn't be easy but it's certainly possible. The hard part isn't that Kashmir has no solution. It has many potential solutions...it can be solved, peace can be achieved, trust can be built over time, relations could improve...
...all it requires is willingness to solve it from BOTH SIDES
and to be honest IMO India doesn't want to solve it and hold a referendum bcuz of the likelihood of either "Independence" or "siding with Pak" options winning out over "siding with India"...mainly due to being Muslim majority and the long tense history/struggle of Kashmiris railing against IA.