New Delhi is confused and frustrated about continued uncertainty over elections in Nepal.

Nepal watchers here are convinced that missing the deadline yet again will mark the collapse of the peace process. They say they are working on politicians in Kathmandu to get their act together, but admit their leverage is limited.

An exasperated official told Nepali Times : "We can't do much if Kathmandu's myopic political class doesn't want elections. They will create new excuses, and this time the excuse seems to be the Madhes."

Indian agencies are said to be in touch with all Madhesi groups, but deny India is instigating trouble in the Tarai. "Why would we want to prolong instability and bloodshed in the Madhes when its first negative fallout is on our own side in Bihar and UP?" asked one official.

Delhi has alerted the Bihar authorities about the presence of Madhesi militants, but officials say without more engagement from Kathmandu it is unlikely that Patna will step up the heat on the extremists.

The policy thrust now is for a quick fix on the Madhes to enable polls to go ahead. It is a difficult balancing act of backing the larger process while maintaining influence over Madhesi groups. India is happy with the unity and alliance of Madhesi groups and the distilled six point demands.

"The government must sincerely reach out to the Madhes, and Madhesi groups shouldn't allow themselves to be used as a pretext to cancel polls. They should consolidate and get votes," said a senior diplomat, summing up Indian policy.

India is also keen on an understanding between the NC and Madhesi groups to strengthen 'democratic forces' so they can stand up to the Maoists. On her recent visit to Delhi, sources said US ambassador Nancy Powell warned her interlocutors that the Maoists were bullying their way through the process. There is concern here that the Maoists will use the YCL to intimidate voters and rig elections.

India doesn't seem to have a neat Plan B in case elections do not happen. But one top policymaker told us, "We don't even want to think of that scenario.it will be like a civil war."

Meanwhile, the king is lobbying hard in Delhi to retain the monarchy. Son-in-law Raj Bahadur Singh was in town this week meeting the BJP's Rajnath Singh and Jaswant Singh, among others. The message is that the Maoists plan a power grab, and only the monarchy can counter it. The royals were pleased about BJP prime ministerial candidate L K Advani launching a blistering critique of India's Nepal policy last week.

Nepal is high on New Delhi's agenda these days. Minister for External Affairs Pranab Mukherjee personally tracks Nepal and speaks regularly with Prime Minister Koirala. The visit to Kathmandu this week by senior Congress leaders Digvijay Singh and Verappa Moily is described here as testimony to the importance Sonia Gandhi attaches to the situation in Nepal.