The US intelligence chief has slammed Pakistan for its failure to curb support to anti-India militants and warned Islamabad that ties between the two countries would deteriorate if there is another "high-profile terrorist attack in India".
"They might deteriorate further in 2017, especially in the event of another high-profile terrorist attack in India that New Delhi attributes to originating in or receiving assistance from Pakistan," Director of National Intelligence Daniel R. Coats said during a Congressional hearing on Thursday.
Coats also sought progress into the 2016 Pathankot attack probe as he presented the intelligence community's 2017 assessment of threats to US national security.
"Islamabad's failure to curb support to anti-India militants and New Delhi's growing intolerance of this policy, coupled with a perceived lack of progress in Pakistan's investigations into the January 2016 Pathankot cross-border attack, set the stage for a deterioration of bilateral relations in 2016," he said.
Last year, Jaish-e-Mohamed militants attacked the Indian airbase in Pathankot on January 2 and killed seven security personnel.
Coats said easing of heightened Indo-Pakistani tension, including negotiations to renew official dialogue, will hinge in 2017 on a sharp and sustained reduction of cross-border attacks by terrorist groups based in Pakistan and progress in Pathankot air base attack investigation.
Testifying before the Senate Select Committee on Intelligence along with key intelligence officials, Coats said that New Delhi-Islamabad relations remain tense following two major terrorist attacks in 2016 by militants crossing into India from Pakistan.
"Increasing numbers of firefights along the Line of Control (LoC), including the use of artillery and mortars, might exacerbate the risk of unintended escalation between these nuclear-armed neighbours," he added.
On Pakistan's pursuit of tactical nuclear weapons, Coats said it "potentially lowers the threshold for their use".
Islamabad has developed short range tactical nuclear missiles to counter India's Cold Start doctrine.
According to the statement, the smaller and more mobile nuclear weapons were more prone to falling in the hands of non-state actors during any crisis situation as they would be outside the relative security of a storage site.
Coats said that Pakistan-based terrorist groups present a sustained threat to US interests in the region and continue to plan and conduct attacks in India and Afghanistan.
"The threat to the US and the West from Pakistani-based terrorist groups will be persistent but diffuse. Plotting against the US homeland will be conducted on a more opportunistic basis or driven by individual members within these groups," he said.
Noting that Pakistan will probably be able to manage its internal security, Coats said anti-Pakistan groups will probably focus more on soft targets.
"The groups we judge will pose the greatest threat to Pakistan's internal security include Tehrik-e Taliban Pakistan, Jamaat ul-Ahrar, Al Qaeda in the Indian Subcontinent, ISIS-K, Laskhar-e-Jhangvi, and Lashkar-e Jhangvi al-Alami," he said.
Coats said that the emerging China Pakistan Economic Corridor (CPEC) will probably offer militants and terrorists additional targets.
Talking about Afghanistan, Coats in his statement said: "The overall situation in Afghanistan will very likely continue to deteriorate, even if international support is sustained."
"Endemic state weaknesses, the government's political fragility, deficiencies of the Afghan National Security Forces (ANSF), Taliban persistence and regional interference will remain key impediments to improvement," he said.
Coats expected Taliban to make gains in 2017 and worsening of the ANSF "due to a combination of Taliban operations, ANSF combat casualties, desertions, poor logistics support, and weak leadership."