IPCS Special Report 12 February 2006

INDO-PAK COMPOSITE DIALOGUE 2004-05 A PROFILE

KS Manjunath, Seema Sridhar & Beryl Anand Research Officers Institute of Peace and Conflict Studies

The India - Composite respective foreign secretaries on 27-28 Dialogue, borne out of the 6 January December 2004, they decided to, 2004 joint statement given by Atal “Build upon the existing contacts Behari Vajpayee and Gen. Musharraf between DGMOs … promote regular laid the ground for the formulation of contacts at local level at designated the eight-point agenda that were places and explore further CBMs detailed by the respective foreign along the international boundary and secretaries in February 2004. The the LoC … discussed and narrowed following issues constitute the eight- further their differences on the draft point Composite Dialogue: Peace and agreement on pre-notification of flight Security including CBMs, Jammu and testing of ballistic missiles, and agreed Kashmir, Siachen, Sir Creek, Wullar to work towards its early finalization.” Barrage/Tulbul Navigation Project, Terrorism and Drug Trafficking, At the next expert-level meeting on 5-6 Economic and Commercial August 2005, an understanding on the Cooperation and Promotion of proposed Agreement on Pre- Friendly Exchanges in Various Fields. Notification of Flight Testing of Detailed exposition in the progress Ballistic Missiles, “committing both made in the aforementioned issues sides to pre-notify in a structured follows. format flight-testing of ballistic missiles, with the objective of I enhancing mutual confidence and Peace & Security CBMs engendering predictability and transparency of intent.” Also, “in

pursuance of the MoU of 21 February Nuclear CBMs 1999 which inter alia provided for The nuclear and conventional CBMs undertaking national measures to between India and Pakistan are based reduce the risks of accidental or on the framework of the Lahore MoU unauthorized use of nuclear weapons (1999) and the Joint Statement made under their respective control, the on 20 June 2004. The Expert Level Indian side handed over a draft of talks were held in Islamabad on 14-15 such a proposed Agreement.” At the December 2004. This meeting’s agenda third round of talks between the was to prevent misunderstanding and respective foreign secretaries on 17-18 reduce risks relevant to nuclear issues, January 2006, the experts meetings on an early operationalisation and of the nuclear and conventional CBMs were upgradation of the hotline between the mandated to “continue consultations DGMOs and the establishment of a on security concepts and nuclear secure hotline between the two doctrines.” Also, an agreement to Foreign Secretaries was sought. prevent incidents at sea and air by During further meetings between the IPCS Special Report 12 February 2006 improving, and ensuring navigation Dialogue promised/promises to be facilities, is on the cards. On 1 January different from previous negotiations 2006, the two countries exchanged by virtue of not making J&K the only their lists of each other’s respective issue on the table, however, the nuclear facilities in terms of a 1988 centrality of J&K, and Siachen as an accord (in force since 1992) that adjunct is undisputable. Hence, prohibits attacking nuclear parleys conducted over these issues instillations and facilities. On 17 have been forever guided by the January 2006, Pakistan proposed “that history of the respective disputes, thus military strike formations on either formulating value judgements of the side should not be permanently respective interlocutors and the relocated to forward locations,” the resultant viewpoints they hold over aim being to avoid the possibility of an the issues. The complex history of the “eyeball-to-eyeball” confrontation region, coupled with the current status every time a strike corps formation is of the region and the flexibility of moved. The proposal is under review options available as solutions to the by India as it may undermine its post- sides is based on their respective Parakram emphasis on quick national (and local) political mandates. deployment of its armed forces. Another unique aspect of these issues is that their resolution has been sought Conventional CBMs at different levels - official diplomatic New Delhi hosted the second round of parleys, “back channel” diplomacy Expert Level Talks between India and conducted by specially appointed Pakistan on Conventional CBMs on 8 representatives or National Security August 2005. It was decided “to Advisors and Track-II diplomacy. implement the 1991 Agreement Therefore, to assess progress made in between Pakistan and India on Air these issues, it is necessary to glean Space Violations in letter and spirit; information from formal upgrade the existing hotline between pronouncements (at the level of the two DGMOs by end September official ministerial and diplomatic 2005; not to develop any new posts parleys), media utterances and and defence works along the LOC; reports, and internal debates in the hold monthly Flag Meetings, between respective countries. local commanders, at Kargil/Olding, Uri/Chakothi, Naushera/Sadabad Any durable solution to the J&K issue and Jammu/Sialkot sectors; speedy requires a multi-pronged approach, return of inadvertent Line crossers, none more important than a political and to work out a comprehensive settlement at the highest level between framework to that end, and the two representative governments, periodically review the existing with close consultations with local CBMs.” representatives of Jammu & Kashmir. At the outset, it must be noted that II Indian and Pakistani positions on the Jammu & Kashmir and causal link between J&K-centric CBMs and the final “solution” to the issue is Siachen different. Manmohan Singh has made it clear that India sees CBMs not as an Of all the marked issues in the end in themselves but as a step Composite Dialogue, Siachen and J&K towards the resolution of disputes. But are the most politically sensitive issues Pakistan’s fears remain over India’s for India and Pakistan. The Composite INDO-PAK COMPOSITE DIALOGUE: A PROFILE

machinations to only pursue CBMs self-government” was proposed. and stave off any substantial Interestingly, in contrast with the movement towards settlement of the aforementioned Iftar proposals, dispute. Conceptual dissonance still “independence and religious basis are exists over this aspect and was on ruled out” this time around. display during the beginning of the Manmohan Singh had made India’s third round of the composite dialogue basic stand very clear as back as May in New Delhi on 16-18 January 2006. 2004 saying, “short of redrawing of Indian foreign secretary opined that boundaries the Indian establishment CBMs were part of the “final solution” can live with anything.” on Kashmir, the logic being that CBMs are integral to resolving his Pakistani In an interview to BBC on 21 October counterpart, Riaz Muhammad Khan 2005, Musharraf wanted the LoC to be curtly expressed Pakistan’s opinion made “irrelevant” to handle the that Saran’s comment was “just a groundswell of human misery point of view.” resulting from the aftermath of the Kashmir earthquake on 8 October Various possible solutions or ‘trial 2005. He put forth the idea to “identify balloons’ have been floated since the ‘what is Kashmir,' then demilitarise the inception of the dialogue. In October identified region, take all the soldiers 2004, during an Iftar party, Musharraf out and then give self-government to identified seven regions in J&K based the people in the region.” on “religious, ethnic and geographical Demilitarisation and self-governance terms [Ladakh (the Islamic part are “joint ideas”, i.e. they are mutually between the Himalayas and the exclusive according to Pakistan and Indus), Kargil/Dras (Muslim), Poonch hence just demilitarisation will not (Muslim, contiguous with Azad suffice, it must be followed up with Kashmir), Jammu (Muslim-majority self-governance. “Demilitarisation” districts) and the Valley (Muslim)]” and “self-governance” have been oft- and change their status. Change of repeated refrains emanating from the status of an area(s) would entail Pakistani establishment, especially in “demilitarisation & autonomy, joint the latter half of 2005. In a January control of the two countries, division 2006 interview, Musharraf clarified his between the two countries, and definition of self-governance by stating making the Kashmir Valley that, “We are working for something autonomous or placing it under UN between autonomy and independence. supervision.” India and the people of And I think self-governance fits in J&K itself shot down this balloon as well.” Another idea mooted by the idea of partitioning the state is Musharraf is joint management; which antithetical to its people and is against entails identification of a region, the one of the foundations of the demilitarise in that region, followed Indian Republic, secularism. Further, by self-governance and then joint Musharraf drew flak from within management. Under his own Pakistan for “doing a U-turn on admission, these “are the four things” Kashmir.” While visiting Delhi in he had proposed long time ago. The April 2005, Musharraf mentioned October 2004 Iftar proposals and the “self-governance” and on 20 May 2005 May 2005 “demilitarisation” proposals “demilitarisation” and “maximum had similar connotations; the only

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IPCS Special Report 12 February 2006 difference being that overt references wake of the October earthquake, the to religious and ethnic grounds for spate of attacks in Kashmir, the New identifying regions are absent in the Delhi bombings and the IISc shootout elucidation of this idea. It must be kept at Bangalore. Pakistan’s capability to in mind that Gilgit, Baltistan and combat terrorism has been one of the Northern Areas that are under cornerstones of this composite Pakistani control now must be part of dialogue as enshrined in the joint this joint management proposal for it to statement of 6 January 2004. have any purchase in India. Musharraf has also floated a ‘test case’ Detailed expositions of the very same of demilitarisation “in three important proposals have been doing the rounds towns of the Valley - Srinagar, since October in the Pakistan Kupwara and .” If India establishment. In October 2005, pulls back its security forces from Pakistan’s minister for Kashmir & these towns, Pakistan will “ensure that Northern Areas Affairs, Faisal Saleh there is no militancy inside.” He Ahmed espoused “joint control proposes to move forward based on formula, limited sovereignty formula the “the comfort that will come to the or a devolution system formula.” people.” India has not publicly Again, during the 13th SAARC Summit responded to this set of measures, yet. at Dhaka in November 2005, the prime The ostensible reason for India not ministers of India and Pakistan met at responding has been that the the sidelines of the summit where the Pakistanis have made no formal demilitarisation and self-rule were presentation of such plans. This has brought up. India’s official response to caused much chagrin and these ideas is that relative self- disappointment to Pakistan and autonomy of J&K is higher as Musharraf in particular. The discretion compared to “Azad” Kashmir and the exercised by India can be attributed to Northern Areas; also, the state a close study of the ramifications of elections in J&K held in 2002 have any plans that involves considering been recognised as “free and fair” by that Kupwara and Baramulla’s both local and international observers. strategic importance as they serve as India has also stressed upon the gateways to the Valley. “54 terrorist special status accorded to J&K under 'commanders' have been killed in the Article 370 of the Indian Constitution. three districts between 2003 and 2005 Closer scrutiny of Pakistan’s bouquets and “183 terrorists were killed in of ideas reveal that the LoC as a de Kupwara and 169 in Baramulla in facto border will be a hard sell during 2005, the two highest numbers in the negotiations with Pakistan, and J&K.” this will have its ramifications on the Siachen issue as well. The demilitarisation and self- governance ‘plans’ being debated in India’s stand on demilitarisation has official and media circles were been constant; describing it as India’s clarified in December when Indian sole prerogative to take that step and National Security Advisor, MK the security set-up is in place to tackle Narayanan said in an interview aired the menace of cross-border terrorism, on 24 December that experienced whose threat has been sharply brought diplomats were engaged in back into focus after credible inputs of the channel diplomacy and India would influx of terrorists into Kashmir in the look into any specific plan about self- INDO-PAK COMPOSITE DIALOGUE: A PROFILE

governance that Pakistan has the Siachen Glacier are moving at a proposed. This concession came after a glacial pace. barrage of criticism from both Pakistan and Kashmiri leaders like moderate- On his visit to the Siachen Glacier on APHC chief Mirwaiz Omar Farooz 10-12 June 2005, Indian Prime Minister and NC President Omar Abdullah Manmohan Singh mooted the idea of about India’s lukewarm response and converting it into a “mountain of inflexibility. However, setting aside peace.” The official Indian position impassioned exhortations, India’s next remains that the boundaries will not step will depend upon studied be redrawn “coupled with Pakistan responses based on not just specific to accepting and authenticating drawing Kashmir (like reduction in violence, of a straight line north of the Soltoro details of the self-governance plans), Ridge.” Troop withdrawal has been but also progress being made in other ruled out until the complex modalities areas of the composite dialogue like of the Actual Ground Position Line Siachen, Sir Creek, trade and CBMs. (AGPL) are worked out. Reports suggest that the Indian government is not “worried about losing control of III the Bilafond La, Gyong La or Siya La, the three passes along the Saltoro Siachen range and falling back.” Delineation of the AGPL remains India’s prime A two-day defence secretary-level concern to avoid violations in future. talks was held between India and The much-touted agreement on Pakistan on 5-6 August 2004 in New Siachen formulated during back Delhi. The ceasefire (in effect since 25 channel diplomatic parleys did not November 2003) at Siachen was materialise in September 2005, even as assessed and the military experts Manmohan Singh and Musharraf met discussed disengagement and at the sidelines of the UN General redeployment of troops. In April 2005, Assembly in New York. 16 months after the initiation of the composite dialogue, the “existing IV institutional mechanisms” (defence secretaries) were mandated to find a Sir Creek mutually acceptable solution. At the next meeting joint statement issued by Indian and Pakistani delegations met the respective foreign ministers on 4 in New Delhi on 6-7 August 2004 to October 2005, it was agreed to discuss the “demarcation of the exchange ideas on the Siachen and international boundary between the continue discussions so as to arrive at two countries in the Sir Creek area.” a common understanding before Later, on the basis of the commencement of the next round of understanding [to undertake the Composite Dialogue in January discussions over joint survey of the 2006. However, the joint statement boundary pillars in the horizontal issued at the end of the scheduled segment (blue dotted line) of the beginning third round of talks on 18 international boundary in the Sir January 2006 did not make any Creek area] reached during the reference to Siachen. Clearly, talks on Foreign Minister level meeting in New Delhi on 5-6 September 2004, a

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IPCS Special Report 12 February 2006 meeting was held at Rawalpindi on provides for the division of the rivers 14-15 December 2004. The two sides between the two countries; eastern agreed that the Joint Survey would rivers, Sutlej, Beas and Ravi to India commence from 3 January 2005. and the western rivers, , Subsequently, a joint statement issued Chenab and Indus to Pakistan (barring (dated 18 April 2005) after Gen. their use by India under specified Musharraf’s visit to India in April 2005 conditions in Jammu and Kashmir). “instructed that the existing Though Kishenganga and the Baglihar institutional mechanisms should cannot directly be classified under any convene discussions immediately with of the eight categories identified for a view to finding mutually acceptable talks under the Composite Dialogue, and expeditious solutions” on the this section would focus on both of issues of Sir Creek and Siachen. these as discussions have been held between the two sides on these During the foreign ministers meet in important issues which have proved October 2005, the “two sides thorny to our bilateral relations and exchanged ideas, taking into account development of the Kashmir region. the joint survey of the horizontal section of the boundary in the area,” Tulbul Navigation / Wullar and “without prejudice to each other’s The Wullar barrage/Tulbul position, they agreed to undertake a Navigation Project was discussed as similar joint survey of the Sir Creek part of the composite dialogue itself, and to consider options for the between India and Pakistan and the delimitation of their maritime delegations met in New Delhi on 28-29 boundary … agreed that the joint June 2005. survey should commence before the end of the year (i.e. 2005) and its The work on the project began in 1984, report will be considered in the next but was stopped in 1987 after Pakistan round of the Composite Dialogue.” lodged its protest. Since then, there The Pak-India Technical Experts met have been ten rounds of secretary- on 20-22 December 2005. The talks level talks between India and Pakistan proved inconclusive due to Pakistan’s to settle the Tulbul/Wullar Barrage stance about the demarcation of the dispute bilaterally. international maritime boundary. Pakistan is at variance with the Indian Pakistan referred to the project as a stand to resolve the Sir Creek issue barrage meant for water storage and before addressing the issue of the accused India of violating the Indus international maritime boundary. Water Treaty 1960. According to India, Reports suggest that the issue is now the construction is meant for “beyond the scope and jurisdiction of enhancing ‘navigation’ and is the Surveyor-Generals of the two therefore permissible under the treaty. countries.” Article III (1) of the IWT provides that both countries have access to each V other's rivers for four distinct Tulbul/Wullar, Baglihar and purposes: domestic use, agricultural use, restricted use for generation of Kishenganga hydroelectric power through a “run- of-the-river” plant, and non- The Indus Water Treaty (IWT) consumptive use. Non- consumptive brokered by the World Bank and use included use of the waters for signed by India and Pakistan in 1960, INDO-PAK COMPOSITE DIALOGUE: A PROFILE

navigation and other purposes held in August 2004 were also provided the water is returned to the inconclusive. river undiminished in quantity. India constructed the barrage to enhance India offered to change structural navigation in terms of Article III (1). designs of the project and Pakistan rejected this suggestion. Pakistan Pointing to the storage utility of the wants to scrap the project altogether barrage, Pakistan has argued that on two counts. One, it entails more India has violated Article I (11) of the water storage than permitted by the Treaty, which prohibits both parties Treaty. Pakistan’s contention is that from undertaking any “man-made the Treaty allowed 0.1 million acre- obstruction” that may cause “change feet of water storage on Jhelum, in the volume …of the daily flow of whereas the project has water storage waters” unless it is of an insignificant 32 times greater. Two, India started amount. Further, Article III (4) the construction without notifying specifically barred India, from Pakistan, which is in violation of the “store[ing] any water of, or construct treaty. India maintains that the project any storage works on, the Western involves no man made water storage, Rivers”. Though the treaty permitted as it intends to make Jhelum a limited storage (not exceeding 10,000- navigable river so that small boats can acre ft.) for purposes of flood control, ply between Srinagar and Baramulla. it prohibited storage of water “for the It facilitates navigation during the lean purpose of impounding the waters of season from October to February, a stream”. when the flow of water in the river is 2,000 cubic feet per second and its The basic draft agreement on the depth is about 2.5 feet. Controlling dispute had been arrived at in October water for navigation is a permissible 1991, whereby India would keep 6.2 activity under the Indus Water Treaty. meters of the barrage ungated with a crest level at EL 1574.90m (5167 ft), The volume of water flowing to and would give up storage capacity of Pakistan would remain intact. India’s 300,000 acre feet out of the permissible position is that the project would, in level on the Jhelum (excluding Jhelum fact, help regulate the water flow in main). Pakistan would reciprocate by the Jhelum and would benefit allowing the water level in the barrage downstream power projects in both to attain the full operational level of the Indian side as well as Pakistani 5177.90 ft. side of Jammu & Kashmir. The talks thus far have proved inconclusive. As per the Joint Statement, on India - Pakistan talks on Wullar Baglihar Project barrage/Tulbul Navigation Project India and Pakistan held the first issued in New Delhi on 29 June 2005, secretary level talks on Baglihar both India and Pakistan agreed to hydropower project on the river continue the discussion at the next Chenab in Jammu and Kashmir in round of the Dialogue Process with a New Delhi on 21 June 2004. The view to resolving the issue in delegations were led by the respective accordance with the provisions of the Water Secretaries from Pakistan and Treaty. The previous rounds of talks India, Ashfaq Mehmood, and V.K.

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IPCS Special Report 12 February 2006

Duggal. The two Indus secretaries in the spirit of the Commissioners, Jamait Ali Shah and prevailing peace process. D.K. Mehta were also part of the deliberations. Earlier, the issue had The secretary-level talks also ended in been discussed in the permanent a stalemate on India’s refusal to stop Indus Commission under the the work on Baglihar da m. Pakistan respective Water Resources Ministries. has taken the matter to the World Bank for arbitration. India and Baglihar dam is under construction in Pakistan had discussions with the Doda district; the project is expected to World Bank-appointed neutral expert generate 450 MW power for the Prof. Raymond Lafitte from the Swiss northern grid including J&K. Pakistan Federal Institute of Technology in objects to the design as it considers Paris, in June 2005, and agreed upon that it would affect water flows modalities to be followed before the downstream. India maintains that the neutral expert could arbiter the technical design of the project, not differences. In July 2005, Pakistani involving storage, is well within the engineers visited Baglihar to prepare a provisions of the Indus Waters Treaty, report. Lafitte visited the project site in 1962, and national and international Jammu in the first week of October practices. Besides, Pakistan argues that 2005. Based on his findings, the the gated structure of the project could decision will be taken and made restrict about 8,000 cusecs of water to public in February 2006. it. India denies this assertion, saying that the limited pondage facility was Kishenganga only to get the required depth for Pakistan has also objected to the power generation. The first phase of Kishenganga project on Neelum River the Baglihar Dam was due for in the Gurez valley, where India is completion in 2004 but has been seeking to divert the course of the delayed by the dispute. river through a tunnel to the Wullar Lake. According to India, diverting In October 2003, India facilitated a water from one tributary of the Jhelum special visit by the Pakistan Indus River to another is permissible under Commissioner and others to visit the the treaty, which is not agreed by dam site in J&K. Pakistan was not Pakistan. The latter also has convinced and had threatened to bring reservations about the design of the in neutral experts — ostensibly the dam and has plans for constructing a World Bank, which had negotiated the power station on the Jhelum, which treaty. India maintained that the would be affected if India built the matter could be resolved bilaterally. Kishenganga. India asked Pakistan to substantiate its objections to the design. In January There were three rounds of talks on 2004, another round of talks was held the 330 MW Kishenganga; the last in Islamabad between the round was held in Lahore between 9- Commissioners under directions of 11 May 2005 and the officials from the their respective governments. The permanent Indus Water Commissions issue was also raised in the annual of India and Pakistan led their teams meeting between the two sides in May respectively. India offered a three- 2004. Since then, there was a stalemate month period to Pakistan for accepting at the Commissioner level and the certain design changes that Pakistan matter was taken up by the two refused. Pakistan has indicated that INDO-PAK COMPOSITE DIALOGUE: A PROFILE

following Baglihar, Kishenganga closer cooperation between drug law might also be referred to the World enforcement agencies.” Bank for international arbitration. VII VI Economic & Commercial Terrorism & Drug Trafficking Cooperation

Terrorism The second round of talks on Official statements to tackle terrorism Economic and Commercial were issued along with efforts to curb Cooperation was held on 9-10 August drug trafficking on 29-30 August 2005 2005. The two sides agreed on the in New Delhi. Apart from reiterating following: aeronautical talks would be “their commitment to combat held in Pakistan in September 2005 to terrorism and re-emphasised the need review the existing Air Services for effective steps for the complete Agreement; bilateral meeting to elimination.” Closer operational review the Shipping Protocol of 1975 linkages and need for cooperation would be held in Pakistan in between the Central Bureau of September 2005, the Second Meeting Investigation and the Federal of the Joint Study Group (JSG) would Investigation Agency was stressed be convened at an early date in upon and “experts from both sides Islamabad. The JSG meeting would be would meet at mutually convenient preceded by the meeting of the Sub- dates in the near future, to work out Groups on Non-Tariff Barriers (NTBs) modalities for the implementation of and Customs Cooperation and Trade the arrangement for cooperation Facilitation to formulate between the two agencies agreed recommendations for consideration by earlier.” Terrorism in J&K is detailed the JSG. in the following sections. While licences are under process for Drug Trafficking & Counter- Pakistani banks to open branches in Narcotics Operations India, the contentious issue of MFN The sixth Director General level talks status for India is being linked to the between the Narcotics Control Bureau resolution of the Kashmir dispute. of India and Anti Narcotics Force of Kasuri aired this view on 22 December Pakistan were held on 13-14 December 2005. However, the financial 2004 at New Delhi. “Issues relating to community is debating the issue on a the trafficking of drugs, psychotropic stand-alone basis, as India will be a de and precursor chemicals and means of facto MFN for Pakistan after SAFTA enhancing bilateral cooperation in comes into force on 1 January 2006. It exchange of information and has been reported that, "Those operational intelligence.” At the strongly in favour of MFN status for seventh round of meetings on 2 India in Pakistan's ruling circles held December 2005, a MoU on counter- the view that the country must move narcotics was signed and it focused on to trade with New Delhi based on cooperation between the respective MNF status before the SAFTA comes counter-narcotics agencies in fighting into force." However, trade and drug trafficking and “emphasis on services between two countries would remain insignificant as Pakistan has

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IPCS Special Report 12 February 2006 linked granting its MFN status to Agreement have been initiated, with India with the resolution of the the Indian side providing a draft Kashmir issue. Coupled with this Agreement for Pakistan’s rider, as on 16 January 2006, Pakistan’s consideration. Federal Cabinet decided not to ratify SAFTA, which came into force on 1 Iran-Pakistan-India (IPI) Pipeline January 2006 in all the other SAARC The Iran-India Pipeline scheme is a countries. The Pakistan government 2775 kilometre natural gas pipeline paid no heed to the wishes of its starting from Assaluyah, South Pars in business community and its own Iran to India through Pakistan. It will Industries, Production & Initiatives pass through provinces of Balochistan Ministry to grant the MFN status to and Sindh in Pakistan. India at the earliest. Later, on 15 February 2006, Pakistan ratified the In 2001, Pakistan and Iran agreed to South Asia Free Trade Agreement construct a multi-million dollar gas (SAFTA), but is yet to grant MFN pipeline, which would later extend to status to India and continues to link India. Initially, India was this with the “progress” on political apprehensive about the whole project, issues like Kashmir. However, those mainly due to security concerns. seeking a MFN to India within Economic and energy imperatives Pakistan reckon that liberalising trade have forced India to pursue the will “lower prices for domestic pipeline project. However, since consumers and generate greater January 2004, India and Pakistan have revenue for the government through been engaged in a peace process and taxes.” India feels it can pull off the construction of the pipeline from Iran Shipping Protocol through Pakistan. The pipeline is seen During the thirteenth Summit of as a major CBM between India and SAARC on 12 November 2005, Aziz Pakistan as it will increase their informed that Pakistan and India were economic interdependence. close to signing a protocol on shipping and port services. He also stated that Pakistan and India established a Joint Pakistan has already proposed 9-10 Working Group (JWG) in June 2005 December 2005 for further headed by the secretaries of their negotiations. Trade ties between India respective petroleum ministries to and Pakistan received another fillip on look into various issues involving gas 10 December 2005 with the revision of pipelines to intensify technical, the Shipping Protocol of 1975 due to financial and legal interaction between the deletion of paras 3 and 5 of the experts on the Iran-Pakistan-India gas Protocol, the restriction on “lifting of pipeline and agreed to hold six JWG cargo between the two countries by meetings and two ministerial meetings third country vessels as well as lifting on the subject. The JWG was to of third country cargo by Indian and exchange views and develop a Pakistani flag vessels from each commonly acceptable approach others’ ports” has been lifted. “The towards the project. It will not only agreement will increase the tonnage discuss the Iran-Pakistan-India gas carried by ships from both countries pipeline, but will also look into and also result in competitive possibilities of Turkmenistan- shipping rates. “ Discussions over a Afghanistan-Pakistan (TAP) pipeline bilateral Maritime Shipping as well as the Qatar-Pakistan pipeline. INDO-PAK COMPOSITE DIALOGUE: A PROFILE

The JWG would also deliberate on the Indian delegation on the status in lead promoter for the gas transport regard to the appointment of their company and the extent of equity financial advisory consortium for the participation by Indian and Pakistani project. It was agreed to join the firms in this company, the debt/equity Energy Charter Treaty (ECT) and options, role of BHP Billiton in the finalizing a Trilateral Framework project and devising a strategy for Agreement which would be prepared participation by Indian and Pakistani jointly by the three parties and would companies in upstream projects under lead to a series of other bilateral and a buy-back contract. trilateral agreements. A 10-member Indian delegation led by Indian The first meeting of the Joint Working Petroleum Secretary Sushil Chand Group (JWG) on 12 July 2005 at New Tripathy attended the second meeting Delhi, deliberated on issues including of the JWG. taxes and duties payable during the pipeline construction and its The third JWG meeting on 16-17 subsequent operation, risk analysis December 2005 at New Delhi and prevention, dispute resolution discussed matters like pipeline and arbitration. S.C Tripathi, routing, delivery points, Secretary, Ministry of Petroleum and transportation tariff, transit fee, capital Natural Gas(India) and Ahmad and operation costs. The issue of Waqar, Secretary, Ministry of pipeline security also featured in the Petroleum and Natural talks. A decision was taken to set up a Resources(Pakistan) led the joint Technical Sub-Group which delegations that discussed on would meet at least once in a month, technical, financial, commercial and alternately in each country to discuss legal issues and also agreed to join the various technical aspects relating to Energy Charter Agreement initially the pipeline project such as technical with ‘observer status’. specification, the quantum of gas, build-up, pipeline route, The second India-Pakistan Joint transportation tariff and system Working Group (JWG) meeting on 8-9 configuration. The most significant September 2005 at Islamabad development was that the countries discussed issues relating to a agreed to move from a bilateral to framework agreement, land tripartite framework of discussions to acquisition, reserve certification, gas evolve a common agreement. Pakistan demand in India and Pakistan, transit also acknowledged the receipt of the fee, project structure, gas pricing draft Framework Agreement proposal mechanism, pipeline size and other by the Indian side. It was agreed that related subjects. The two sides briefed since the agreement required each other’s delegation regarding the consensual view relating to project status of their developments. India structure, it would be taken up for had appointed an international consideration after discussion relating company, M/s Ernst & Young, as to the project structure had been financial consultant and had initiated completed satisfactorily among the action to appoint technical and legal three sides. The next meeting of JWG consultants who would support the would be held in early March 2006 at financial consultant. Pakistan briefed Islamabad. The Project Structure and

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IPCS Special Report 12 February 2006 the Framework Agreement would be quake. The Srinagar- finalized by April 2006. bus service resumed on 2 December 2005 after restoration of the quake- The proposed pipeline project is affected bus route, ending the misery significant in many ways. They range of stranded passengers. The first from Social, Political, Multilateral and round of talks over setting up the Economic. As a capital intensive Amritsar-Lahore road link went project, the pipeline would generate underway in Islamabad on 10-11 May substantial employment along its 2005. The second round of the India - route. To safeguard the investment Pakistan technical level talks on interests and other economic spin-offs, operationalisation of Amritsar-Lahore the stakeholders are bound to and Amritsar-Nankana Sahib bus maintain improved political services was held on 27-28 September cooperation. Also, India and Pakistan 2005. In lieu of the 8 October are increasingly import-dependent for earthquake, a decision was taken on 14 their energy needs. At a time of October 2005 to postpone the trial run possible energy crises, an alliance of the Amritsar-Lahore bus. Along the through pipeline for energy security Punjab border, the Lahore-Amritsar makes good economic sense. bus started on 20 January 2006 and the Amritsar-Nankana Sahib bus will roll The US has publicly opposed the by 27 February 2006. The official talks project on concerns about Iran’s on 21-22 December 2005 succeeded in nuclear programme and has also agreeing to these popular Punjab- maintained that the pipeline is against centric services. Early the US Iran and Libya Sanctions Act operationalisation of Poonch- (ILSA) of 1996 which forbids more Rawalakot Bus Service and a truck than $20 million of investment in service for trade on the Srinagar- Iranian oil and gas projects. US Muzaffarabad route is also on the Secretary of State, Condoleezza Rice, cards. Both sides have decided to start on her visit to India in 2005 a Poonch- Rawalakot bus service and a maintained that the US was opposed Muzaffarabad-Srinagar truck service to India’s cooperation with Iran on for “trade in permitted goods.” This any joint ventures. Also, India’s vote was decided during the third round of at the IAEA for the Resolution against talks at New Delhi on 17-18 January. Iran’s nuclear aspirations has aroused fears about endangering Indo-Iran India proposed the setting up of the relations and India’s energy security. Munabao-Khokrapar rail link and the Mumbai-Karachi ferry service in VIII October 2003. Officials met in Promotion of Friendly December 2004 to discuss the Munabao-Khokrapar rail link. India Exchanges in Various Fields wanted the service to be operational by September-October 2005. Pakistan Road & Rail Linkages sought an additional two years to Setting up of road links were part of build the necessary infrastructure on it the bouquet of Indian proposals of side. As a follow-up, the Manmohan October 2003. The Srinagar- Singh-Shaukat Aziz meet at New Muzaffarabad bus service was Delhi on 17 Feb 2005 expressed hope inaugurated by Indian Prime Minister for progress at the Joint Study Group Manmohan Singh on 7 April 2005 and meeting at the level of commerce carried on until the 8 October 2005 INDO-PAK COMPOSITE DIALOGUE: A PROFILE

secretaries that would be held in New Point Railway Station near Delhi on 22-23 February. In March Khokhrapar. This six monthly process 2005, Pakistan allotted Rs 3.1 billion will be repeated alternately.” for the rehabilitation and upgradation of the Mirpurkhas-Khokhrapar rail However, the real test of these link in Sindh so that it can be extended initiatives would be the arrangements until Munabao in Rajasthan. for passengers to facilitate quick Manmohan Singh and Musharraf operation of visa regimes. Simplifying reiterated hopes to operationalise rail visa procedures and setting up link by the end of December 2005 additional counters for issuing visas when they met in April 2005. Finally, from points-of-origin on the proposed on 21 October 2005, JP Batra, chairman road and rail links is of equal of the Indian Railway Board, importance. announced the operationalisation of the Munabao-Khokrapar rail link by Ferry Service January 2006 while speaking at a two- The uniqueness of the proposal to start day meet of the International Union of a Karachi-Mumbai ferry service lies in Railways (UIC). its potential to shore up trade and commerce between the commercial The Munabao-Khokhrpar train service hubs of the respective countries as will be revived from January 2006, well as the sub-continent. While after the two sides signed an visiting Karachi in January 2004, agreement during a ministerial level Shiveshankar Menon, India’s High meeting in New Delhi on 22 Commissioner to Pakistan stated that December. The scheduled launch of the Karachi-Mumbai ferry service the service in January 2006 was would be taken up after having dealt postponed as the Pakistanis had to with rail link issue first. In September work out “modalities over 2005, Pakistan government granted a immigration, customs and the licence to a private firm named "Land frequency of trains.” A Pakistan Ocean Ferry Service" to operate a delegation visited India from 4-7 Karachi-Mumbai ferry service. The January 2006 to work out these service is yet to be operationalised. modalities. Subsequently, the Thar Express was slated to start on 1 Formal Sea & Air Linkages February 2006, but was postponed of A MoU on issues between the Pakistan the proposed 23-24 January 2005 Maritime Security Agency (PMSA) meeting between the respective and Indian Coast Guard (ICG) was authorities. The agreement was signed arrived at on 11 May 2005 in when Indian authorities visited Rawalpindi. The MoU will enhance Pakistan on 31 January 2006. The communication links and provide “a service will now start from 18 formal mechanism for exchange of February 2006. “The rake for this information regarding EEZ violations, service will be provided alternately by search and rescue operations, control Indian and Pakistan Railways on a six of pollution, natural disasters and monthly basis. For the first six months, calamities, smuggling and drug the Pakistan train will cross into India trafficking etc.” Representatives of the to Munabao. Thereafter, the Indian respective civil aviation ministries met train will cross into Pakistan to Zero in Rawalpindi on 27-28 September 2005 to review the existing bilateral

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IPCS Special Report 12 February 2006 arrangements. They have not met Chakoti-Uri, Hajipur-Uri, Rawalkot- since. Poonch and Tattapani-Mendhar. They were functional by 7 November 2005. Indian Proposals after October The entire process was demonstrably Earthquake slow and did not respond to the India put up a slew of ideas for urgency of the situation on the Pakistan’s consideration after the 8 ground. October 2005 earthquake. On 10 October 2005, India proposed to provide aid to those areas in PoK that were cut-off. Its proposals in the form of relief supplies across the LoC, foot patrols of medical personnel were not accepted by Pakistan. However, Pakistani helicopters were allowed to fly upto the LoC, a practice avoided by both sides in normal times. The Pakistani rider to India’ sending its helicopters without their pilots was not accepted by the Indians.

Telephone links were restored across LoC for bereaved family members on 19 October 2005. On 22 October 2005, the Indian government decided to set up composite relief and rehabilitation points at three places: Kaman (near Aman Setu in Uri), Tithwal (Tangdhar) and Chakan da Bagh (Poonch), to provide facilities for medical assistance and relief to people from across the Line of Control. Relief material, medical aid, food, drinking water and temporary accommodation are available at these points. The Centre expected it to be operational from 25 October 2005. People from across the LoC will be permitted to come to these points after necessary screening during daylight hours and return after receiving medical treatment and relief. In addition, Indian nationals will be able to go to these points for meeting their relatives who may be coming from across the LoC. India’s proposal to set these three points countered by the Pakistani proposal to set up 5 points along LoC where relief material will be exchanged. They are Nauseri-Tithwal,