Scenario five: A smaller independent Kashmir
An independent Kashmir could be created from the Kashmir Valley - currently under Indian administration - and the narrow strip of land which Pakistan calls Azad Jammu and Kashmir. This would leave the strategically important regions of the Northern Areas and Ladakh, bordering China, under the control of Pakistan and India respectively. However both India and Pakistan would be unlikely to enter into discussions which would have this scenario as a possible outcome.
If, as the result of a regional plebiscite, which offered the option of independence, the majority of the inhabitants of the Kashmir Valley chose independence and the majority of the inhabitants of Pakistani-administered Jammu and Kashmir, (excluding the Northern Areas) also chose independence, a smaller, independent Kashmir could be created by administratively joining these two areas together.
This would leave the predominantly Muslim Northern Areas as part of Pakistan and Buddhist Ladakh and majority Hindu Jammu as part of India, with the possibility that some Muslim districts of Jammu might also opt to join the independent state.
Although Pakistan has demanded a change in the status of the Kashmir Valley, it depends on water from the Mangla Reservoir in Pakistani-administered Jammu and Kashmir and would be unlikely to permit loss of control of the region.
India is still committed to retaining the Kashmir Valley as part of the Indian Union and has refused to consider holding a plebiscite in any part of the state.
Regardless of the aspirations of the inhabitants, to date neither country has contemplated a situation where the end result would adversely affect their own interests.