It appears that a tacit agreement on the release of Pakistani prisoners of war was reached in early 1972, since Bhutto overturned the death sentence handed down by Sheikh Mujibur Rehman on 8 January 1972. The sheikh took over as Prime Minister of Bangladesh on 10 January 1972. The United States declared Bangladesh sovereign on April 4, 1972. This laid the groundwork for the Shimla agreement. However, Pakistan officially recognized Bangladesh on 22 February 1974 and China on 31 August 1974. The important part of the agreement included Pakistan`s recognition of Bangladesh. Other issues were discussed: the repatriation of refugees to India and the release of Bangladeshi and Pakistani nationals stranded in both countries. Pakistan has agreed to host an unspecified number of bihari Muslims from Bangladesh. Pakistan has also agreed to send back to Bangladesh nearly 150,000 to 200,000 Bengali citizens of the new nation-state of Bangladesh. On 29 August 1972, the two chief negotiators Parmeshwar Narain Haksar (India, Parmeshwar Narain Haksar) and Aziz Ahmed of Pakistan signed the final agreement between India and Pakistan, the summit between Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto.
In the end, during the Shimla final, Gandhi evolved as a swing factor between strength and accommodating postures. The alternative of calling Bhutto`s bluff and leaving without agreement, Gandhi and Haksar were deemed too expensive after India`s dramatic triumph in 1971. The self-limitation that underpinned India`s attitude was all too noticeable to the Pakistanis. Ahmed, their negotiator, later noted that “India`s excessive fear of avoiding the failure of the talks at all costs has become its great handicap,” while it held “all the negotiating tokens.” Haksar later noted that “force negotiations” are part of the diplomatic currency. But negotiating with someone weak is even more difficult. In the hope of saving an agreement, Bhutto called Gandhi directly. During the climate meeting, Gandhi stressed the main advantage of the Indian proposal in Kashmir – neither side was forced to physically abandon the territory or exchange populations. With “obvious feeling and sincerity,” Bhutto acknowledged that India`s proposal was the only possible one, but that a legally binding commitment would significantly weaken its domestic political position and strengthen the military establishment. He could give nothing but oral assurance that the de facto border in Kashmir, in Bhutto`s words, would gradually acquire the “characteristics of an international border.” On the other hand, India`s concession was concrete and in advance. India abandoned its “package arrangement by agreeing to withdraw troops from the international border before concluding an agreement on Kashmir.” The Simla agreement reads as a communiqué rather than a peace agreement with a country that had waged war on India. Nothing in the agreement has put Pakistan in a state of good behaviour in the future. It also contained some ridiculous expectations, such as the clause that required both governments to “take all measures within their power to prevent hostile propaganda against each other.” The agreement did not prevent relations between the two countries from deteriorating until the armed conflict, the last time during the 1999 Kargil war.
In Operation Meghdoot of 1984, India seized the entire inhospitable region of the Siachens Glacier, where the border was clearly not defined in the agreement (perhaps because the area was considered too arid to be controversial); This was considered by Pakistan to be a violation of the Simla agreement.