This declaration by a senior Indian official last week sums up New Delhi's predicament vis-à-vis Sri Lanka, where the rebel Liberation Tigers of Tamil Eelam and the government seem to be squaring off for another prolonged round of bloodshed and ethnic strife.
The daily toll in army-LTTE violence has seen a sharp rise recently, and the LTTE has been muttering threats about reviving its war against Colombo. Reports that the outfit was coercing donations from the public to fund its 'last strike' against the government have not helped.
The refugees have once again started arriving on the coast of Tamil Nadu. Sri Lankan Minister and military spokesman Keheliya Rambukwella says they are being sent by the LTTE 'so that they could make an issue within their political arena.'
India has seen a dramatic surge in economic interaction with the island nation, particularly post the February 2002 ceasefire agreement. But when it comes to foreign and strategic policy vis-à-vis its southern neighbour, New Delhi has been constrained by the Tamil factor.
India burnt its fingers badly in the aborted Indian Peace Keeping Force mission (1987 to 1990). And after the assassination of former prime minister Rajiv Gandhi by the LTTE on May 21,1991, India has refused to officially mediate in the dispute, despite being urged by both the LTTE and the government in Colombo to do so.
To wholeheartedly support Colombo's crackdown on the Tamil LTTE would spark resentment in Tamil Nadu.
To talk to the LTTE would mean giving legitimacy to a outfit which New Delhi (and the United States) has banned as a terrorist outfit. Last week, the European Union agreed 'in principle' to list the Tigers as a terrorist outfit too, despite warnings that this could jeopardise the already-fragile peace process.
The Tamil factor is why, when approached by Colombo for military assistance, New Delhi offered everything else instead. Having delayed a proposed defence agreement with Sri Lanka over one pretext or the other, it watched helplessly as Colombo took its military wish list elsewhere, including Israel, China and Pakistan.
The two sides are due to meet in Geneva this week, but the escalation in violence could lead to a cancellation by either side. Last week, the European Union agreed, 'in principle' to list the LTTE as a terrorist outfit, despite warnings that this might further derail the peace process.
Urging an end to the "escalation of violence" the Indian official stressed the need to continue talks for a "larger political settlement," and a solution which could, among other things, be "some variant of the Indian federal structure."
India, however, is unwilling to mediate directly in the conflict despite appeals from both the government in Sri Lanka and the Tamil Tigers. New Delhi refuses to negotiate with the LTTE, which it has banned as a terrorist outfit, but it cannot implicitly endorse or arm Colombo's crackdown on the Tamil rebels, since that would have direct repercussions in the Indian state of Tamil Nadu. Indian weapons being used against fellow Tamils.
Which is why when approached by Colombo for military aid, New Delhi offered everything else instead. Having delayed a proposed defence agreement with Sri Lanka over one pretext or the other, it watched helplessly as Colombo took its military wish list elsewhere, including China and Pakistan.
Economically, things have never been so good.
A bilateral Free Trade Agreement signed in December 1998 by then prime minister Atal Bihari Vajpayee and then Sri Lankan President Chandrika Bandaranaike came into effect in March 2000. But it was only after the Colombo-LTTE ceasefire was initiated in February 2002 that there was huge surge in economic activity. Bilateral trade has grown by almost 150 per cent since then.
Over a hundred medium to large Indian companies, including tyre giant CEAT and Indian Oil now have joint ventures in Sri Lanka. The Apollo Hospitals Group has set up a 'super speciality' unit in Colombo. Sri Lanka's Dilmah tea competes with Tata and Lipton on Indian store shelves.
And talks are now on to expand the agreement to cover trade in goods and services.
Pakistan, not to be left behind, has also initiated a similar Free Trade Agreement with Sri Lanka in February last year. This has even led to some speculation that Colombo might soon replace Dubai as a transit point for India-Pakistan trade. But the Free Trade Agreement with both India and Pakistan have clear restrictions on goods originating from other sources, which means Indian and Pakistani companies wishing to sell goods to each other would first have to set up a manufacturing base in Sri Lanka.
On the political front, however, when Sri Lankan Foreign Minister Mangala Samaraweera visited Delhi (May 8 to 10), he was politely told that India, while watching the situation with concern, could not go beyond training facilities for the Lankan army and non-lethal military assistance.
He was also told that India had no objections to Colombo purchasing weapons from any other country, provided they did not impinge on India's security concerns.
Samaraweera, who met Indian leaders and officials including Prime Minister Manmohan Singh, (who also holds the foreign minister's portfolio), Foreign Secretary Shyam Saran and National Security Adviser M K Narayanan, was also told that joint naval patrolling of the northern coast of Lanka could also be done but in a non-war situation.
Lankan officials believe the LTTE could be severely constrained if their supply lines from the sea were disrupted. But this would mean taking on the Sea Tigers, the LTTE's naval outfit, which launched a suicide attack on a Sri Lankan troop carrier ship earlier this month.
Indian officials say Samaraweera was also urged to initiate unilateral efforts to resolve the crisis. This includes trying to forge a consensus on the country adopting a semi-federal setup, which would give broad powers to the Tamils.
But this would be difficult to implement given that Sri Lankan President Mahinda Rajapakse pledged adherence to a unitary state during his election campaign. The Sinhalese hardline right-wing Janatha Vimukthi Peramuna, which helped him gain power, is unlikely to endorse any such move.
Meanwhile, pressure is mounting on New Delhi to get involved not just from the Sri Lankan government and the Tigers, but also from Tamil Nadu.
Tamil National Movement president and LTTE supporter Pazha Nedumaran, a former Congress leader who is said to be close to Tamil Nadu Chief Minister M Karunanidhi, has demanded that Delhi send a ship to pick up refugees fleeing the violence in Sri Lanka, like it had done in 1983 during the anti-Tamil rioting there.
'Indira Gandhi sent two ships in 1983 to Sri Lanka. India should send a ship to Sri Lanka now. India must also warn the Sri Lankan government to stop the killing of Tamils,' he said.
Some 2,000 Tamil refugees have already arrived in Tamil Nadu since January.
Faced with unpleasant choices, New Delhi can only hope that the ceasefire holds, which would allow it continue to play the game of wait and watch.