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That is only possible if they allow a fearless environments. The present GOI is happy to keep separatists in their brotherhood, who actively promote unrest in Kashmir, and help Pakistanis to infiltrate into Kashmir, thus forcing the use of army and therefore making it impossible that any normalcy sufficient and necessary for development could be established there.One option is do put money on development of the Kashmir valley. Get in the good books of the Kashmiris and than extend the idea of an independent Kashmir (including Northern Areas and GB). This will cut-off Pakistan from China and also provide a much friendlier gas line through the Northern Areas.
Do what US did with West germany. Let the people of Pakistan occupied Kashmir know what they are missing. This would keep them in our good books. Their source of income through tourism will be largely from India. Investment in Kashmir will be largely from India. They will be on our side as far as economics are concerned.
The local politicians are extremely foxy. On one hand they would criticize the separatists and on the other seek to justify article 370 and autonomy of Kashmir.
Someone in the US has rightly noted (in one of the cables?) that Kashmir is a grand market with every stakeholder running their respective shops at the cost of the people of Kashmir. They will never allow a settlement of the Kashmir issue.