LONDON, May 9: Political uncertainty at home and military deadlock with Pakistan could paralyse India’s economic reforms and block its emergence as a global player, the International Institute for Strategic Studies (IISS) said on Thursday.

In its annual Strategic Survey, the influential London-based think tank underlined the “promise and peril” facing not just India, but also Pakistan and the United States as they try to unravel the diplomatic tangle wrought in South Asia by the aftermath of Sept 11.

“On balance, a deadlock is likely to prevail in Indo-Pakistani relations through 2003,” the survey said.

“This paralysis could adversely affect India’s efforts to broaden and deepen its political and military relationship with the United States.”

Much would depend, the IISS said, on President Pervez Musharraf’s ability to hold on to power and further deliver on promises to curb “cross-border terrorism” in occupied Kashmir.

India might then be pushed into constituting civil reforms in the held state, which in turn could lead to a scaling down of military deployment on the border and stabilize mutual deterrence between the two nuclear neighbours.

“Developments are needed along these lines if India is to get over its obsession with Pakistan and become the major power it seeks to be — and that Washington would like it to be,” the survey said.

The IISS noted the strategic shift brought about in the region by the US-led “war on terrorism”, which impacted on a rapidly growing Indo-US rapprochement.

Washington was forced to tilt back towards Pakistan in order to ensure Islamabad’s operational and diplomatic cooperation in the military campaign against the Taliban and Al Qaeda network in Afghanistan.

“If the American courtship of India was not put on hold, it was complicated by a serious rival interest,” the survey said.

The IISS attributed renewed US interest in building a strong relationship with India to its need for a counterweight to China’s influence in the Asia region.

On the purely domestic front, the survey said the future of India’s economic reforms, which have followed a stop-start route in the 10 years since their launch, were threatened by the inherent weaknesses of coalition government.

With the decline of the once all-powerful Congress party in the 1990s, India’s politics have become increasingly regionalized, resulting in a series of fractious and unwieldy multi-party coalitions in New Delhi.

“This development has made it difficult to establish a proper consensus, and the sheer number of parties and interests tends to preclude any sense of coherence,” the IISS said, highlighting the government’s inability to reform the behemoth public sector and antiquated labour laws.

“The coalition regime appears destined to remain fractious for the foreseeable future. Accordingly, significant economic reforms will, in all likelihood, remain stalled.”

Identifying a Congress-led coalition reliant on Communist support as the only viable alternative to the current Hindu nationalist-led government of Prime Minister Atal Behari Vajpayee, the IISS said such an administration could lead to a further slowing of the “near-glacial progress” of economic reform.

It could also witness a foreign policy return to the “knee-jerk anti-Americanism” of the Cold War.