Following the 1971 war, India and Pakistan signed the Shimla Agreement on July 2, 1972. The treaty was signed by Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto. The core objective of the agreement was to establish a framework for long-term peace and to move past the conflict that had led to the creation of Bangladesh.

The agreement is significant because it formalizes the commitment of both nations to settle their differences through bilateral talks rather than seeking international mediation. This includes the contentious issue of Kashmir. By signing the document, both leaders agreed to refrain from the threat or use of force against the territorial integrity or political independence of the other.

While the treaty remains the bedrock of official diplomatic engagement, its interpretation has been a subject of ongoing debate. India has historically maintained that the agreement precludes third-party involvement in the Kashmir dispute, emphasizing that the matter must be resolved strictly between New Delhi and Islamabad. Conversely, Pakistan has at various times sought international intervention, arguing that the agreement does not permanently bar the involvement of the United Nations or other global powers in addressing regional tensions. Despite these differing interpretations, the Shimla Agreement continues to be cited by both governments as the primary reference point for diplomatic conduct and the resolution of bilateral grievances.