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The war stripped Pakistan of more than half of its population, and with nearly one-third of its army in captivity, clearly established India's military and political dominance of the subcontinent. India successfully led a diplomatic campaign to isolate Pakistan and skillfully manipulate Pakistan's supporting countries to limit the extent of support to Pakistan. In addition, Prime Minister Indira Gandhi's state visit to United Kingdom and France further helped break ice with the United States, and blocked any pro-Pakistan resolution in the United Nations. There was also a meeting between Prime Minister Gandhi and President Nixon in November 1971, where she rejected the US advice against intervening in the conflict.
The victory also defined India's much broader role in foreign politics, as many countries in the world had come to realize – including the United States – that the balance of power had shifted to India as a major player in the region. In the wake of changing geopolitical realities, India sought to establish closer relations with regional countries such as Iran, which was a traditional ally of Pakistan. The United States itself accepted a new balance of power, and when India conducted a surprise nuclear test in 1974, the US notified India that it had no "interest in actions designed to achieve new balance of power."
In spite of the magnitude of the victory, India was surprisingly restrained in its reaction. Mostly, Indian leaders seemed pleased by the relative ease with which they had accomplished their goals—the establishment of Bangladesh and the prospect of an early return to their homeland of the 10 million Bengali refugees who were the cause of the war. In announcing the Pakistani surrender, Prime Minister Indira Gandhi declared in the Indian Parliament:
Dacca is now the free capital of a free country. We hail the people of Bangladesh in their hour of triumph. All nations who value the human spirit will recognize it as a significant milestone in man's quest for liberty.
Colonel John Gill of National Defense University, US, remarks that, while India achieved a military victory, it was not able to reap the political fruits it might have hoped for in Bangladesh. After a brief 'honeymoon' phase between India and Bangladesh, their relationship began to sour. The perceived Indian overstay revived Bangladeshi anxieties of Hindu control. Many were concerned that Mujib was permitting Indian interference in the country's internal matters and many in the Bangladeshi army resented his attachment with India. Whilst India enjoys excellent relations with Bangladesh during the Awami League tenures, relations deteriorated when the Bangladesh Nationalist Party assumed power. A 2014 Pew Research Center opinion poll found that 27% of Bangladeshis were wary of India. However, 70% of Bangladeshis held a positive view of India: while 50% of Bangladeshis held a positive view of Pakistan.
For Pakistan, the war was a complete and humiliating defeat, a psychological setback that came from a defeat at the hands of rival India. Pakistan lost half its population and a significant portion of its economy, and suffered setbacks to its geopolitical role in South Asia. In the post-war era, Pakistan struggled to absorb the lessons learned from the military interventions in the democratic system and the impact of the Pakistani military's failure was grave and long-lasting.
From the geopolitical point of view, the war ended in the breaking-up of the unity of Pakistan from being the largest Muslim country in the world to its politico-economic and military collapse that resulted from a direct foreign intervention by India in 1971. The Pakistani policy-making institutions further feared that the historicity of the two-nation theory had been disproved by the war, that Muslim nationalism had proved insufficient to keep Bengalis a part of Pakistan.
The Pakistani people were not mentally prepared to accept the magnitude of this kind of defeat, as the state electronic media had been projecting imaginary victories; however, the privately owned electronic news media coverage in East Pakistan had reported the complexity of the situation. When the ceasefire that came from the surrender of East Pakistan was finally announced, the people could not come to terms with the magnitude of defeat; spontaneous demonstrations and massive protests erupted on the streets of major metropolitan cities in Pakistan. According to Pakistani historians, the trauma was extremely severe, and the cost of the war for Pakistan in monetary terms and in human resources was very high. Demoralized and finding itself unable to control the situation, the Yahya administration fell when President Yahya Khan turned over his presidency to Zulfikar Ali Bhutto, who was sworn in on 20 December 1971 as President with the control of the military.
The loss of East Pakistan shattered the prestige of the Pakistani military. Pakistan lost half its navy, a quarter of its air force, and a third of its army. The war also exposed the shortcomings of Pakistan's declared strategic doctrine that the "defence of East Pakistan lay in West Pakistan". Hussain Haqqani, in his book Pakistan: Between Mosque and Military notes,
Moreover, the army had failed to fulfill its promises of fighting to the last man. The eastern command had laid down arms after losing only 1,300 men in battle. In West Pakistan 1,200 military deaths had accompanied lackluster military performance.
— Ḥaqqānī
In his book The 1971 Indo-Pak War: A Soldier's Narrative, Pakistan Army's Major General Hakeem Arshad Qureshi, a veteran of this conflict, noted:
We must accept the fact that, as a people, we had also contributed to the bifurcation of our own country. It was not a Niazi, or a Yahya, even a Mujib, or a Bhutto, or their key assistants, who alone were the cause of our break-up, but a corrupted system and a flawed social order that our own apathy had allowed to remain in place for years. At the most critical moment in our history we failed to check the limitless ambitions of individuals with dubious antecedents and to thwart their selfish and irresponsible behavior. It was our collective 'conduct' that had provided the enemy an opportunity to dismember us.
— Qureshi
After the war, the Pakistan Army's generals in the East held each other responsible for the atrocities committed, but most of the burden was laid on Lieutenant-General Tikka Khan, who earned notoriety from his actions as governor of the East; he was called the "Butcher of Bengal" because of the widespread atrocities committed within the areas of his responsibility. Unlike his contemporary Yaqub who was a pacifist and knew well of the limits of force, Tikka was a "soldier known for his eager use of force" to settle his differences.
Confessing at the hearings of the War Enquiry Commission, Lieutenant-General A. A. K. Niazi reportedly commented on Tikka's actions and noted: "On the night between 25/26 March 1971, [General] Tikka struck. Peaceful night was turned into a time of wailing, crying and burning. [General] Tikka let loose everything at his disposal as if raiding an enemy, not dealing with his own misguided and misled people. The military action was a display of stark cruelty more merciless than the massacres at Bukhara and Baghdad by Chengiz Khan and Halaku Khan... [General] Tikka... resorted to the killing of civilians and a scorched earth policy. His orders to his troops were: "I want the land, not the people..."." Major-General Rao Farman reportedly had written in his table diary: "Green land of East Pakistan will be painted red. It was painted red by Bengali blood." Farman forcefully denied writing that comment, and laid all responsibility on Tikka, while testifying at the War Enquiry Commission in 1974.
Major reforms were carried out by successive governments in Pakistan after the war in the light of many recommendations made in the Hamoodur Rahman Commission Report. To address the economic disparity, the National Finance Commission system was established to equally distribute the taxation revenue among the four provinces, the large-scale nationalisation of industries and nationwide census were carried out in 1972. The Constitution was promulgated in 1973 that reflected this equal balance and a compromise between Islamism and Humanism, and provided guaranteed equal human rights to all. The military was heavily reconstructed and heavily reorganised, with President Bhutto appointing chiefs of staff in each inter-service, contrary to C-in-Cs, and making instruction on human rights compulsory in the military syllabus in each branch of inter-services. Major investments were directed towards modernising the navy. The military's chain of command was centralized in Joint Staff Headquarters (JS HQ) led by an appointed Chairman Joint Chiefs Committee to coordinars military efforts to safeguard the nation's defence and unity. In addition, Pakistan sought to have a diversified foreign policy, as Pakistani geostrategists had been shocked that both China and the United States provided limited support to Pakistan during the course of the war, with the US displaying an inability to supply weapons that Pakistan needed the most.
On 20 January 1972, Pakistan under Bhutto launched the clandestine development of nuclear weapons with a view to "never to allow[ing] another foreign invasion of Pakistan." This crash programme reached parity in 1977 when the first weapon design was successfully achieved.
As a result of the war, East Pakistan became an independent country, Bangladesh, as the world's fourth most populous Muslim state on 16 December 1971. West Pakistan, now just Pakistan, secured the release of Sheikh Mujibur Rahman from the Headquarter Prison and allowed him to return to Dacca. On 19 January 1972, Mujib was inaugurated as the first President of Bangladesh, later becoming the Prime Minister of Bangladesh in 1974.
On the brink of defeat in around 14 December 1971, the media reports indicated that the Pakistan Army soldiers, the local East Pakistan Police they controlled, razakars and the Shanti Committee carried out systematic killings of professionals such as physicians, teachers, and other intellectuals, as part of a pogrom against the Bengali Hindu minorities who constituted the majority of urban educated intellectuals.
Young men, especially students, who were seen as possible rebels and recruiters were also targeted by the stationed military, but the extent of casualties in East Pakistan is not known, and the issue is itself controversial and contradictory among the authors who wrote books on the pogrom; the Pakistani government denied the charges of involvement in 2015. R.J. Rummel cites estimates ranging from one to three million people killed. Other estimates place the death toll lower, at 300,000. Bangladesh government figures state that Pakistani forces aided by collaborators killed three million people, raped 200,000 women and displaced millions of others.
According to authors Kenton Worcester, Sally Bermanzohn and Mark Ungar, Bengalis themselves killed about 150,000 non-Bengalis living in the East. There had been reports of Bengali insurgents indiscriminately killing non-Bengalis throughout the East; however, neither side provided substantial proofs for their claims and both Bangladeshi and Pakistani figures contradict each other over this issue. Bihari representatives in June 1971 claimed a higher figure of 500,000 killed by Bengalis.
In 2010, the Awami League's government decided to set up a tribunal to prosecute the people involved in alleged war crimes and those who collaborated with Pakistan. According to the government, the defendants would be charged with crimes against humanity, genocide, murder, rape and arson.
According to John H. Gill, there was widespread polarisation between pro-Pakistan Bengalis and pro-liberation Bengalis during the war, and those internal battles are still playing out in the domestic politics of modern-day Bangladesh. To this day, the issue of committed atrocities and pogroms is an influential factor in the Bangladesh–Pakistan relations.