These two countries were carved out in 1947 after the colonial rulers left the continent. But the creation was not smooth. Seeds of communal feelings based on ‘Two-Nation Theory’ were sown during the colonial rule which flared up hatred and led to clashes between Hindus and Muslims when the time came for actual demarcation of boundaries and transfer of properties. India began a new era with a democratic constitution, federal government and parliamentary institutions based on fundamental rights and secularism. Pakistan adopted a Presidential form based on Islamic laws, but soon was taken over by the military. Since then it has been reeling under political instability due to power struggle between civilian elites and military elites. Hate-India Syndrome has been a tool of survival for any ruler in Pakistan. Also, since birth Pakistan has constantly harboured a feeling that India has not willingly accepted its creation and may retaliate anytime. This compelled Pakistan to move closer to the Arab world and superpowers. It also created a bogey of demand for Kashmir from India under the pretext that it is a muslim-majority part. Pakistan became member of SEATO and CENTO and also hobnobbed with the US to gain financial and military assistance. In 1948, it tried to annex Kashmir with the help of some mercenaries. Pakistan failed but India also lost some of its territory due to wrong strategies and till date Kashmir has remained a major irritant between the two countries. Pakistan again ventured another military attack in 1965, but had to retreat against India’s military power. In 1971, It received a humiliating defeat, both militarily and politically, when India liberated Bangladesh. This decisive victory and further successful atomic explosion in 1974 boosted India’s global prestige and enhanced her clout as a mature, seasoned and responsible global power. This prompted a shift in Pakistan’s India-policy, the architect of which was Gen. Zia. Realizing that direct and overt confrontation with India is not going to succeed, Pakistan encouraged a proxy war against India with the help of terrorists, Islamic jihadis and its own secret service. The strategy was to infiltrate terrorists into Indian territory, brainwash & train jihadis in India and mastermind bomb-attacks on sensitive establishments and public places. The intension was to destabilise India politically, provoke communal violence, weaken India’s social fabric and disintegrate India. This indirect war has been a major challenge for India since 1980s. Indian and US secret agencies have proved with substantial evidence that Pakistani agencies are supporting the terrorist activities. Atomic explosion by India in 1998 and subsequent explosion by Pakistan threw this region into dangerous nuclear race and added to the existing tensions. These events have vitiated the relations between India and Pakistan. But, political realities of the region and global compulsions have led both to carry out constructive cooperation in non-political fields, while official rounds of dialogue continue on contentious issues.