India and Pakistan battled over East Pakistan, now Bangladesh, in their third major war. Pakistan accused India of supporting Bengali separatists who sought to overthrow Pakistani rule of Bangladesh.

After many casualties, Pakistan agreed to a cease-fire with Bengali troops and officially recognized the sovereignty of Bangladesh.

Pakistani President Zulfikar Ali Bhutto and Indian Prime Minister Indira Ghandi signed the Simla Pact to formally end the war over Bangladesh.

The Simla Pact also reinstated the Kashmir "line of control" similar to the one created by the 1949 U.N. resolution and Karachi Agreement. Pakistan, however, has lodged several complaints with the U.N. alleging ceasefire violations by Indian troops.

India tests its first nuclear device in May. Pakistan begins its nuclear program the same year, with a bitter arms race developing between the two nations.