India’s external environment has worsened greatly in the past 12 months and there is nothing to indicate a turnaround. Pakistan’s current preoccupation with internal terrorism and the Taliban may give us more temporary respite. But it is a mixed bag. As Hafiz Saeed’s release shows, the Pakistanis are quite emphatic in making a distinction between terror groups that threaten them and their American allies, and the Lashkars that their army and ISI patronise as “strategic assets” against India. At the same time, it is giving them an opportunity to indulge in some squeeze-play with the Americans. In return for the war on the Taliban, they are squeezing not just cash and military aid from Washington, they are also getting away with their totally cynical — but time-tested — policy of nuancing terror groups as being different on their western and eastern flanks. Therefore many in the Indian security establishment believe that another terror attack may not be entirely improbable — if for nothing else than to keep us unbalanced and the Americans “interested”.

Nepal has deteriorated greatly, and as things stand we seem short of ideas as well as leverage there. More than any other neighbour, an unstable Nepal is a threat that is both internal and external, given our shared demography and the nature of our borders. Links between the Nepalese Maoists and India’s Naxals are still rather incipient, probably because our border districts in UP and Bihar have still resisted the red story. But it is precisely because of that possibility that the current lack of a political centre of gravity in Nepal is a grave evolving threat to us. The real threat there is not so much the growing Chinese influence, but the prospect of anarchy.

... contd.