I saw this cold war while skimming through ibskins for president, and thought it deserved more attention.
The way these two countries regaurd each other is not what you might call a war where leaders would nuke each other or anything. They would more likely fight a small scale war, as there is not really anything to be gained. There is nothing to be gained as the un would not recognise land grabs by either side, and all that is left is tension between leaders.
If they were allowed to expand thier borders, then there might be a case for a financially stimulating war. What they have is more a war of religion - one like between a family. They will not be bringing islam to india as they already have this, so, they would likely be forcing the indians into worship. This could be like a crusade of sorts...
I suggest street artists get together and paint the walls of buildings with pro islamic and pro hindu symbolism. This will make them see that india has also got a vestment in the islam that is a part of thier daily lives anyway. Otherwise, maybe they sign a treaty of friendship, have a holiday, and have thier leaders meet. I am sure what you call the asian leaders body would like to see these two be friends? This means they should pump the media full of peaceful slogans and have the media interview the leaders next to each other.
If the leaders were in close proximity to each other, then they would relax - it is the high walls that make them so edgy. If they were to have a cultural cross over, from the leadership down to the people, then everyone would relax and remember that everyone is different and it is working.