The indians are living in a make-believe world if they think that dialogue with Pakistan is going to give them any headway in any way with Pakistan.
The Pakis are very cleverly using the dialogue to get the indian pressure off them on the borders so that their troops can be redeployed in Baluchistan and other internal trouble spots.
They get brownie points with the US.
Interim - the jehadi's still get trained for anti-india operations. The ISI sends in people - if not via POK - then via Nepal and Bangladesh.
If the Indian establishment think that they are in a dialogue - they are living in a grand delusion. The Pakis are simply buying time for getting a better grip on the internal security and planning their next strike on a train in bombay or a bus in Delhi and in the creation of more khalistans.