India and Pakistan may stumble into a large-scale war neither side wants, warns a US intelligence report while exploring the possibilities of miscalculations leading to a war in South Asia. 

The assessment is included in a Global Trends report produced every four years by the US government's National Intelligence Council, released in Washington. The report, released on Wednesday, focuses on both immediate and distant futures and is designed to help policymakers anticipate the forces likely to shape the world in the next five to 20 years.

"India and Pakistan may stumble into a large-scale war neither side wants, especially following a terrorist attack that the Indian government judges to be significant," the report warns.

The ability of some militant outfits to conduct attacks, New Delhi's resolve to retaliate against Islamabad after such an attack, and Islamabad's determination to defend itself "are likely to persist and may increase" in the next five years, the report adds.

"Miscalculation by both governments could prompt a breakdown in the deterrence that has restricted conflict to levels each side judges it can manage."

The US policy in Afghanistan and its impact on the neighbouring countries is top on a list of key uncertainties in South Asia that are underlined in the report. This would be "especially true" if a security vacuum emerges in Afghanistan that results in a civil war, expanded freedom of manoeuvre for regional terrorist networks, or criminals and refugees flowing out of the country, it adds.

The report predicts that such an outcome would exacerbate political tensions and conflict in western Pakistan and sharpen the India-Pakistan rivalry by strengthening longstanding judgments about covert warfare in Islamabad and New Delhi.