Hong Kong: India and Pakistan are again playing each other at their shared national obsession �€” cricket. Pakistan�€™s President, Pervez Musharraf, is expected to visit India to watch the game. More remarkably, this time next month there should be a bus service operating between the two parts of the disputed territory of Kashmir, partitioned since 1949 along the Line of Control. This progress toward normalisation accords with majority sentiment in both countries. It also reflects the changes in the international landscape since September 11, changed relationships with the United States, the ousting of the Taliban in Afghanistan and both countries�€™ commitments to outward-looking economic policies.

But can accord be achieved on the basis of small confidence-building measures while leaving Kashmir to some final settlement, accepting the Line of Control as a de facto border for the foreseeable future? Can this dispute be left to history to resolve?

Desirable though that may seem to be, in practice it may stumble over an issue that receives scant attention: water. It is possible to envisage Pakistan permanently keeping its jihadis under control. Equally one can envisage the Muslim majority in Indian-held Kashmir enjoying peace and autonomy under an elected government. But, as a new paper by the Mumbai-based Strategic Foresight Group asks, can there be peace without a much broader settlement of issues like that of the waters of the Indus and its tributaries?

On the face of it, Kashmir is an issue about identity: India�€™s identity as a secular state, Pakistan�€™s as a Muslim one, and for Kashmiris, whether they would prefer just to be Kashmiris. For reasons more to do with Pakistan politics than anything else, it has also become a cause for jihadis.

But control of Kashmir also gives the ability to control the rivers that are the lifeblood of Pakistan and of India�€™s part of the Punjab region. One of the wonders of the past 45 years has been that the 1960 Indus Waters Treaty has survived several wars and crises between the two countries. It allotted Pakistan 56 per cent of the catchment flow and India the rest. It is a matter of debate which side did best, but the treaty enabled both countries to develop canal systems. It also gave rights to build hydroelectric plants so long as they did not permanently change water flow.

With 80 per cent of its farmland relying on irrigation, Pakistan needs the Indus waters as badly as Egypt needs the Nile. So despite the treaty, the waters remain the crux of the Kashmir issue. Pakistan continues to fear that India will use its control of some of the headwaters. Meanwhile, India sees Pakistan�€™s support of jihadis and others pressing for the end of Indian rule in Kashmir as cover for its fears about water.

The treaty is open-ended, but given the increasing water and power shortages in both countries, it will come under increasing stress. Unless India and Pakistan can move toward enhanced cooperation on water issues, the treaty may end with one side abrogating it, setting the scene for turmoil. Cooperation would make usage of the waters more efficient, but it would require a much higher level of trust.

Tension over Kashmir�€™s waters flows through to other areas of the subcontinent. In Pakistan itself, there are sharp disputes over sharing scarce water between dominant Punjab on the one hand and Sindh and Balochistan on the other. India is accused of fanning consequent secessionist sentiments in a bid to weaken, if not break up, Pakistan. These accusations are mirrored by Indian allegations of its neighbour�€™s involvement in the Maoist insurgency in Nepal and secessionist movements in its northeast states.

The consequence of this bickering, the Strategic Foresight Group argues, is not just an arms race and India�€™s neglect of regional leadership and its global role. India has "not sought its destiny by rising above regional rivalries." The corollary is surely that India must see Pakistan not as a semi-equal nuclear rival but as a smaller state with a great sense of vulnerability to a large neighbour and to dependence on waters beyond its control.

So the cricket match is a small step on the long road to trust on the subcontinent. The hope must now be that having stepped back from fundamentalist tendencies, India and Pakistan will now be able to face the waters issues in the light of the direct benefits of cooperation �€” not only to their economies, but also to badly needed regional stability and trade.