A compromise on the process of addressing the full India-Pakistan agenda and a principle of reciprocity on the 26/11 inquiry seem set to re-start the peace process.
New Delhi also believes the all-powerful Pakistan army is now on board when it comes to the bilateral dialogue.
The two sides have effectively agreed to middle paths on a number of the issues that had sunk the last few attempts to relaunch the dialogue.
Thus, the two have agreed to sequentially discuss all issues that were part of what used to be the composite dialogue process, including Kashmir, Siachen and terrorism, before Pakistan foreign minister Shah Mehmood Qureshi visits for talks this year.
This bridges the gap between Pakistan's demand that all issues be discussed with time tables attached and India's incremental, step-by-step stance.
Regarding forward movement on 26/11, the two have agreed to work under the "law of comity" - effectively, legal reciprocity.
India has proposed sending a panel to obtain voice samples of those believed to have directed the attack. Pakistan had earlier asked to send a judicial commission to record the statements of Indian officials who recorded the surviving 26/11 terrorist, Ajmal Kasab. Both sides have asked for further clarifications of these demands.
India is sequencing the dialogue process to try and achieve progress on all issues. These will include terrorism and security, India's primary concerns. They will also include water - a key Pakistani concern - trade and cross-border confidence-building measures.
They will mostly be held at secretary-level.
"For the next few months, things aren't going to remain dormant. There will be a lot of activity, a lot of interaction that had in a sense been put in abeyance for many months now. The intention from both sides is to resume the process," foreign secretary Nirupama Rao said.