Waging a war or firing at enemy rangers is a legal option for sovereigns and in that sense Pakistan can use all options available to it. But simultaneously Pakistan and India have signed ceasefire agreement along the LoC even though the ceasefire is repeatedly violated, more often by Pakistan. If Pakistanis don’t like Indians or if they feel cheated by Indians on Kashmir then they can fire at Indian troopers or fight a war but they should never mutilate deceased soldiers’ bodies. The same is true for India as many Indians feel animus and antagonistic towards Pakistani state and its people.
But India should take the incident seriously. Obviously, fighting a war or disproportionately reacting towards Pakistan may not be viable options at all. India rethinking on its re-engagement with Pakistan could also be a bad move as this is what Pakistani military and intelligence establishment may want at this moment of time. India should continue to engage Pakistan in a peaceful manner as extensively and as comprehensively as it is possible and it should not feel shy of discussing Kashmir issue with Pakistan.
But then it should never forget the incident. India should use all diplomatic measures to corner Pakistan on this issue. It should use the good offices of the Pentagon Chairman and the Russian defense secretary to achieve desirable results. If international military courts exist then India should take the issue to these courts. India should make sure that Pakistan feels embarrassed about the incident and should try to make a three star Pakistani general apologize. In this way Pakistani defense establishment may be hesitant to repeat the act.
But such things should be done in private otherwise they will not succeed. All should remember that there exists a thing called measure and they should act proportionately. If pride is not an issue then Indian defense establishment should seek compensation from Pakistani military for the deceased soldiers. But India and Pakistan should never segment because of this issue as it may backfire. Moreover, segmentation between India and Pakistan is always difficult and it could affect demographic equations negatively.