In looking at the future of Pakistan-India relationship, it is useful to have an aspirational model of what we might aim for. Various people have made various suggestions, based on the history of other countries in the world, depending on what their final vision is, and what lessons they draw from history. For example, it has been suggested that France and Germany could form a model: their history is full of wars in the 17th, 18th, 19th and early 20th Centuries. Yet today they are living in peace, and are jointly the principal countries in the European Union (EU).
Other people have suggested that East and West Germany could provide a model. After the Berlin Wall fell in 1989, the two Germanies, which underwent a de facto Partition based on Allied Occupation Zones at the end of World War II - merged peacefully, though not without significant economic and political adjustments on both sides. Here the common point of comparison is that the German Partition took place around the same time as the Partition of British India - and the two Germanies spent the Cold War on opposite sides, rather like Pakistan and India.
Yet other people have suggested that Brazil and Argentina, which had a long-running rivalry in the 19th and early 20th Centuries (that included a race toward nuclear weapons, which both eventually gave up) could form a model. Argentina and Brazil threw off their colonial occupiers (Spain and Portugal) in the early 19th Century, and then found that they had disagreements over territory, over which they fought wars 1825-28, and then again 1852-54. Brazil settled its boundary issues awith Argentina in the early 20th Century, but the two remained rivals (though not enemies) through most of the 20th Century, each going through military dictatorships. But finally, in the aftermath of the Falklands War of 1980, they both democratized and eventually signed a free-trade pact - Mercosur. They launched a cooperative program in civilian nuclear energy, as well as one in space research. In 2007 they jointly launched a rocket into space. Today Brazil and Argentina are each other's largest trading partners, with a close political relationship.
Other people yet have suggested that the European Union itself forms a model, for the whole of South Asia, including Bangladesh, Nepal, Sri Lanka, Bhutan and the Maldives - as a sort of next step from SAARC (South Asian Association for Regional Cooperation) - to result in what has been called a South Asian Union (SAU). Although SAARC is more than 20 years old, movement towards SAU has been slow, mainly because India and Pakistan, the two biggest members of SAARC, need to solve their bilateral issues first.
Yet other people have suggested that the United States is itself a model for South Asia, and all countries in the region could eventually organize themselves internally and externally into what has been called the United States of South Asia (USSA). This has a long history, and was quite actively promoted during the immediate pre-Partition phase 1945-47. The idea was again revived at the end of the Cold War, but in spite of an active constituency in both India and Pakistan, has not quite taken off, again the bilateral issue between India and Pakistan tying up progress.
All of these ideas have many things to commend them, and some have also been studied in depth by various scholars, generals, and diplomats. It may very well be that sometime in the future, a version of either the SAU or the USSA models, or some variation thereof, could be the model for political organization in South Asia.
Here I would like to suggest that perhaps the Canada-US relationship could serve as a good model for Pakistan and India for the immediate future, while in the long term other possibilities can also be studied and could come to fruition if found suitable. Consider the similarities between India-Pakistan and US-Canada.
First, relative geo-demographic scale: Although Canada and the US have roughly the same land area, the population and economy of USA is roughly ten times that of Canada. The population and economy of India are roughly in the same proportion relative to that of Pakistan, though in land area terms, Pakistan is about a quarter of India's land area.
Second, history: Both US and Canada were once ruled directly by Great Britain (later US also took over areas under the Spanish and French). What is often not appreciated is that a significant number of present-day Canadians had ancestors who were Americans that escaped to Canada (then known as British North America) after the American Revolution of 1776. This has its counterpart in India-Pakistan history: both were ruled by Britain (and therefore also, like Canada and the US, use English), but also, as a result of Partition, there is a significant number of people, especially in Pakistan, whose ancestors lived in areas that are now in India.
What is appreciated even less today is that Canada and the early US had hostile relations in the first few decades. They even went to war in 1812. However, in 1815, a peace treaty was signed, and has held ever since. Disputes between the US and Canada have arisen since then, but they have always been settled by negotiations, discussions, give-and-take, and arbitration when needed. For example, the boundary between Canada and Alaska, a dispute running for nearly 80 years, was eventually settled in this way. The Alaska boundary issue between Canada and the US does resemble the Kashmir issue between India and Pakistan, and the Kashmir issue can also be settled between India and Pakistan in the same way - negotiations and discussions, and arbitration if necessary.
What is even more interesting is that water is an issue between Canada and the US at present, just like water is an issue between Pakistan and India. There are proposals today to meet water shortages in the US through import of water from Canada. While strong views are held in Canada on the issue, the matter will eventually be settled in a peaceful manner, with no thought of going to war, an example that Pakistan and India can also follow.
Canada and the US are today joined, together with Mexico, in a North American Free Trade Area, and this is also something that India and Pakistan could move toward, a South Asian Free Trade Area. Canada and the US share a relatively very open border, where citizens of either country do not need visas to travel to the other. So could India and Pakistan.
And just like with India-Pakistan cricket rivalry, teams of Canada and the US have rivalries in (ice) hockey and to some extent, also baseball. Just as many talented Pakistani actors, musicians and other artistes work in Bollywood, so also, many Canadian actors, musicians and other artistes work in Hollywood. In this respect, many concerns regarding cultural issues between Canada and the US are similar to those that often arise in Pakistan and India.
In summary, Canada and the US share many aspects of India-Pakistan history (a common language, English; common colonial master - Britain; populations with significant shared ancestry) and today their relationship has many aspects that India and Pakistan too could come to share: Issues settled by negotiation; relatively free borders; free trade; friendly rivalry in hockey/cricket; shared cultural traditions/Bollywood.
But there are even more subtle points of similarity. It has been argued, quite persuasively, for example, that much of the basis of Canadian nationalism lies in an attempt to define an identity on the North American continent that is explicitly 'non-(US)American'. Indeed, going further, it has been argued that 'Canada is a nation of people in denial of their own American-ness'. While a counter-argument can also be mounted, the very existence of this strain of thought is a point of similarity with the India-Pakistan dynamic - where it is often argued that Pakistan is a nation of people who are in denial of their own Indian-ness! In both cases, it is claimed that there is a nationalism based on negation, not affirmation. Among those Canadians that can see this clearly, there is a strong sentiment to create a larger North American Union which includes both Canada and the United States, much like there is also among many Pakistanis a sentiment to create a South Asian Union that includes both Pakistan and India.
The Canada-US relationship is therefore, in my opinion, an important aspirational model for the Pakistan-India relationship, that merits greater attention from thinkers and scholars on all sides as a good direction for the near term future, while the long-term future could include any of the other possibilities such as SAU or USSA. Indeed, the future, even for the Canada-US relationship could well lie in a larger union, variously called the North American Union (NAU) or a United North America (UNA) that includes both the US and Canada.