Step 1: Understanding the Concept:
The Shimla Agreement is a significant peace treaty in the diplomatic history of South Asia.
Step 2: Detailed Explanation:
The agreement was signed following the Indo-Pakistani War of 1971, which resulted in the independence of Bangladesh.
The treaty was signed at Shimla, India, on July 2, 1972.
The signatories were the Prime Minister of India, Indira Gandhi, and the President of Pakistan, Zulfikar Ali Bhutto.
The agreement aimed to resolve bilateral issues peacefully and pave the way for normalising relations between the two countries.
Step 3: Final Answer:
The Shimla Agreement was signed between India and Pakistan in 1972.
Hence, option (D) is the correct choice.