Why India wants to resume dialogue with Pak

New Delhi: India has offered to hold official-level talks with Pakistan, signalling a return to bilateral dialogue suspended after the 2008 Mumbai attacks.

New Delhi blames the attacks, which killed 166 people, on Pakistan-based terorists and wants Islamabad to act against them. The talks will be held at the level of the top diplomats of the two countries.

What's behind India's move?

New Delhi's earlier tough line -- no official talks with Pakistan until its neighbour gets serious about tackling anti-India militants on its soil -- has not produced results more than a year after the Mumbai strike.

India may now feel a more nuanced approach that boosts the credibility of Pakistan's civilian government is preferable than making tough demands, which could be used as ammunition by hawks in the Pakistan government and the army.

Washington is also eager for improved India-Pakistan ties, as tension after the Mumbai strike diverted Islamabad's attention from fighting insurgents in Afghanistan and Pakistan.

What's at stake in the talks?

Meaningful progress towards improved relations between India and Pakistan would be a relief for the United States, as it continues to pour money and troops into the region.

It would also calm nerves over a series of border skirmishes in recent weeks between India and Pakistan, who have been to war three times, twice over the disputed region of Kashmir and once over the founding of Bangladesh. Though a serious escalation is unlikely, the exchanges fuelled tensions between the two nuclear-armed rivals.

Having blamed some state agencies in Pakistan for having a hand in the Mumbai attacks, official level talks could lead to, in India's eyes, a stronger commitment from Pakistan to crack down on militants who want to train their guns on India.

Is success likely?

Though official-level talks are a big step-up from an earlier deep freeze on relations, any progress is likely to be slow.

There is no quick fix on Kashmir, which lies at the heart of their rivalry and which still remains a rallying cry for Kashmiri and Pakistan-based militants.

A further militant attack on Indian soil could send confidence levels into freefall once again. As if to underline the point, the U.S. Defence Secretary Robert Gates warned India might lose patience with Pakistan over another attack.

What is the political fallout for India?

The Indian public and political opposition groups are sensitive to any hint of an Indian sellout towards its foe, and New Delhi's latest move has already sparked a backlash from some quarters.

The main opposition Bharatiya Janata Party has slammed the offer as premature, arguing Pakistan has done too little to earn India's generosity.

Though it grappling with a slew of domestic issues, most notably price rises, India's Congress-led government still has a lot of political capital to expend after a comfortable victory in last year's federal election.

What's at stake financially?

Closer ties between India and Pakistan will be greeted positively by investors, but would not have a significant short-term market impact.