The question for the Indian government is to what extent it should hold the government of Pakistan responsible for the unprecedented invasion and assault on its territory, citizens and tourists. The gunmen in question all came from Pakistan and were trained in Pakistan, however the government of Pakistan denies any responsibility and maintains a position of "plausible deniablity". It maintains that it should not be held responsible for the unauthorized actions of its citizens who invaded and murdered from its territory (and not for the first time), in the same way that Lebanon denies responsibility of the actions of Hezbollah who infiltrate Israel from Lebanese territory. Pakistan maintains that India and Pakistan face the same enemy in militant Islam which committed this atrocity to "embarrass the government of Pakistan."
This argument allows Pakistan the best of both worlds: Their radicals can use Pakistan territory as a base of operation against India and others with little fear, while the government of Pakistan can maintain respectability, claiming ignorance and washing their hand of any actions emanating from their territory against India. Should India dare to respond, Pakistan threatens to remove all troops in the fight against militants boarding Afghanistan, and put them on the boarder facing India instead, thus damaging allied efforts against the Islamists in the tribal regions. That is an insufferable and untenable position that cannot be allowed to continue. India should not be made to pay the price for the allies' kid-glove approach toward Pakistan.
India now must decide how to respond. No response at all will only embolden the enemy and send the message to Pakistan that it's business as usual. A non-response will eliminate any shred of deterrence and any possibility that Pakistan will take real action against its own radicals. Business as usual may be an option for us, but is not an option for India.
On the other hand, an all out war between the two nuclear powers would be a risk that no one can take. India needs to engage a few high-profile selective Islamist (non-Pakistani government) targets that will satisfy public demands in India for action, reestablish a credible deterrence and send the message that such evil deeds do not go unanswered... without triggering an all out war. If Pakistan is sincere, it will absorb the blow and refrain from responding. It's a fine line to walk with many variables and unpredictable outcomes. Interesting times lay ahead for South Asia.
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