1. Pakistan will retaliate by taking out our assets ? And they are atleast 10 times more capable than us when it comes to terrorism. Pak Army wants India to attack. These guys are desperate. These attacks will only increase in the near future.
Pak army wants another Op Parakram to shun their war against their trained guys being forced upon them by US. A covert operation is not what they wish. A covert operation by India taking out guys like Hafiz, Lakhvi, Dawood...and his ilk are not in Pakistan's interest. These people are considered as assets by Pak establishment. Attacking them would have negative effect on the covert war that Pakistan is carrying on India. It will also create fear of retaliation in the pigs that mastermind attacks against India. Remember, the masterminds love their life, they use foot-soldiers as cannon fodder, while they themselves live in a great luxury and have contacts within power circles. By hitting them, India would send a message that they are not immune. They would know that, now, it is not just the foot-soldier who is risking his life but they are also risking their lives by getting involved in these attacks against India.
As for Pakistan's capabilities against India. Yep, sure. And they are using their capabilities to do what they can. If they could do better, they would have done it already. Right now, nothing stops them from doing so. The handlers, master-minds, funders, trainers...etc know that they are safe, only some young fool would be trained and indoctrined for some 2-3 months and sent to do a job in India. But if they know that even they will come under line of fire, then the equation changes. Think of it this way, right now, we are fighting a defensive war, a defensive unconventional war against Pakistan. We can foil their attempts hundred times, yet they will try again because they are safe in their locations. But if we retaliate covertly for every attack made on us by hitting one of their chief guys then the attempts would not be as frequent or as brazen. Pakistan gave up the option of conventional war against India after it was defeated. We had defended three times before that, but they kept coming back until we defeated them by going on offensive. The same has to be done in this unconventional war.
2. India would be committing an act of terror on a vital partner of US in WoT. Diplomatic seppuku. Pak has non state actors, we don't. So we don't have any plausible deniability excuse. And the cold war is finished. We are integrated with the world. US relies heavily on Pak for carrying out its Af ops. And it needs to ensure that Pak troops stay on the western borders.
We have plausible deniability. Pakistan has no non-state actors, they invented them. We could do the same. US is not stopping its vital partner from attacking India, so it better take a hike. US' WoT is its headache. We have our worries to ponder over. Anyway, nothing can be proved. Remember, Pakistan has non-state actors, so maybe one of them did it.
The dialogue would be like this:
US: We told you guys that we need Pak troops on western border, then why did you do it?
India: what did we do? We did not move our troops and have shown restraint after you guys pleaded us to do that.
US: Then why did you carry out this attack of Hafiz guy?
India: We did not.
US: We know you did. Accept it.
India: We did not. There are so many non-state actors in Pak, may be someone else did it.
US: No, you did it. RAW did it.
India: Oh, come now, how can you be so sure? Pakistan is saying this so that they dont have to do the job on their western front.
US: Anyway, what you did was wrong, dont repeat it again. It creates a lot of mess for us.
India: We did nothing.
3. Currently Zardari-Gilani-Qureshi are about as pro-India politicians in Pak as they come, we can't afford to let Pak Army take over. Pak is already embroiled in terrorism, our aim is not to destabilize the country nor necessarily unite it.
Are you kidding? What will India gain with pro-India politicians and what will India lose if PA take over? PA is still incharge of their foreign policy vis-a-vis India. Our aim is to protect ourselves. BTW, if PA takeover, why will it be destabilized? PA is rightnow pulling strings from behind and if it takes over, it will pull strings directly. No difference whatsover as far as India is concerned.
Our long term aim should be to destabilize the Pakistan without much spillover effect on India.
A short recap of the present situation
US has acknowledged the problem is Pak.
Yet, it continues to give huge aids and weapons to Pak, all of which are used against India.
US is cutting deals with the Af talibani irregulars to target the 5 core groups (Quetta Shura, Haqqani etc).
Hardly matters to us until and unless LeT or JuD or such groups based in Punjab province of Pakistan are untouched because these are the ones attacking India right now not Quetta Shura or Haqqani.
ISAF is conducting the largest op in a Astani province bordering Pak, the last bastion of taliban.
US is carrying out ops in Pak mainland - arrest of top Quetta Shura leaders
Drone activity has increased. - A leading Haqani family member was killed recently
As I said, not our main priority.
India is calling for talks. - To not give Pak an excuse to move troops to the east.
Exactly. We are talking to not give them any excuse, so that they can move their troops to western borders. We can keep talking and carry on with our covert ops. Of course, the Paks will make noise after the hit, but you must remember that in Pakistan everything is blamed on foreign hand(meaning India, US and Israel), so we should rubbish their attempts to link us in the hit.
At this point in time the common man in Pak is already terrorised by the inflation, energy crisis, food crisis, sectarian clashes and terrorism. Not much we can do to add to his misery.
Common man of Pak is concern of Pakistan's rulers. Indian rulers need to worry about common man of India who is being attacked by terrorists who are being funded, indoctrined, trained, nurtured, handled from Pakistan.