"The decision on Lakhvi also fuels India's argument to the United States that their attempts to engender cooperation from Pakistan are futile and naive, as Pakistan will not truly change its stripes unless there is a wholesale change towards leadership that can keep the military in check," Whitney Kassel wrote in the prestigious Foreign Policy magazine.
Kassel is a director focused on strategic analysis and risk management at the New York-based Arkin Group, a private intelligence firm.
Lakhvi, 55, was released from jail on April 10 following the Lahore High Court's dismissal of his detention orders.
His release "tanked any near-term prospects for improved relations between the two countries," wrote Kassel who spent four years with the Department of Defence, where she focused on special operations, counter-terrorism, and Pakistan policy.
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"A deterioration in Pakistan's relations with either nation will be detrimental to regional and global security and, in the case of bilateral India-Pakistan ties, the ultimate stability of both countries," she said.
Although Pakistani authorities have claimed that there was not enough evidence to keep Lakhvi in prison, much of the evidence in the case is considered sensitive and thus has not been made available to the press or public, Kassel noted.
"It is unlikely that Lakhvi's release will be enough to shut down the pipeline of US military assistance, given the importance of that bilateral relationship. But it certainly tips the scales towards those who hold Pakistan's commitment to counter-terrorism in doubt. In the case of India, it will almost certainly preclude any further talks for some time to come," Kassel said.