Terror won't deter progress on trade with Pak

The attack on an army camp and a police station in Jammu and Kashmir on Wednesday is not likely to lead to a cancellation of the planned meeting between Prime Minister Manmohan Singh and Pakistan's new prime minister, Nawaz Sharif, in New York this Sunday.

Official sources, who spoke on the condition of anonymity, said a major development in improving trade relations might be announced following that meeting - and this attack, which is being seen as a deliberate confrontation, would not be allowed to derail an occasion of such importance. Presumably this would include Sharif's assertion that he would pass India's Most Favoured Nation status through Pakistan's parliament, something its previous government failed to do.

By some estimates, annual trade between the two neighbours following normalisation of economic relations could go up to $12 billion. Ready access to produce from Pakistan at times of shortage could ease episodes of spikes in food inflation on the Indian side; for Pakistan, its energy shortfall could be partly addressed.

The PM reacted with unprecedented swiftness on Thursday to news of the attack. In a statement issued early in the morning local time in Frankfurt, where he was stopping on his way to the United States, Singh called the attack "heinous", "cowardly" and "barbaric". The statement also specified that "encouragement and reinforcement" from across the border was crucial to such attacks. It did not, however, mention directly the planned meeting with Sharif, merely that dialogue with Pakistan would continue.

Unlike on some previous occasions when Singh has attempted to move forward on relations with Pakistan, his Congress party also released an official statement of support. The opposition Bharatiya Janata Party, however, indicated its unhappiness with the proposed meeting, saying Sharif should be given more time to control anti-India elements within Pakistan.

Officials close to the PM said the prevailing view was that it was futile to wait; there were "many Pakistans" and India should deal with those that were friendlier to its interests. Every Indian administration, they claimed, has talked to Pakistan even while taking casualties on the border, and Singh subscribes to that continuous strategic vision.

Singh's first destination in the US, however, is Washington DC, where he will meet President Barack Obama on Friday morning. Security issues will figure in that meeting as well, with the future of Afghanistan being discussed. However, economic issues will predominate, said the sources. The state of the world economy, the question of better co-ordination of monetary policy as well as the recent cooling of Indo-US relations - especially in the economic sphere - are all likely subjects for discussion. The recent diplomatic overtures made by Iran to the US, which might lead to an easing of sanctions on one of India's major sources of oil, is another relevant issue.

Arriving in Washington, Singh told reporters that he intended to "review and deepen" the bilateral relationship.