As per today's LSPP call, regular ipsec works ok over loopback.
However, I could not get labeled ipsec to work over loopback.
I will investigate to see why.

Also, you must set to false /proc/sys/net/ipv4/conf/lo/disable_xfrm
and /proc/sys/net/ipv4/conf/lo/disable_policy. By default they are set
to true.

Regards,
Joy


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