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You are talking about pre-bleedingheart Gujral era. RAW has 0 first party HUMINT today... only ELINT & SIGINT and 3rd party HUMINT.
Well, this is an age-old proven technique of "counter-intelligence" in the realm of espionage. RAW & MI also specialize in infiltrating extremist/secessionist groups.
This weaken these groups from within (by exposing their plans/hideout's /organization hierarchy/funding/safe-havens/sponsors/communication links etc.), from outside (by alienating the local population) & eventually, they are eliminated, by playing one group against the other.
One example: Hizb-ul-Mujahiddin vs. JKLF & other splinter groups. & the tactics of erstwhile RAW chief : AS Daulat