India is set to scrap the bilateral agreement between India, Pakistan and the United States which was signed in 1991, which was aimed at improving relations between the neighbours, the foreign ministry said on Wednesday.

The announcement comes days after India and the US signed a deal for $100bn worth of infrastructure projects in Pakistan and $1bn worth in India’s north-east, and a separate deal for infrastructure projects on the border in Kashmir. 

The deal came under fire from the United Nations last month, with a statement from the agency stating the US has not fulfilled its end of the bargain by ensuring that India would not violate the agreement’s provisions that it should not be used as a transit point for illegal arms sales to Pakistan.

The agreement came into effect in 1990 after the Indian military overthrew the democratically elected Pakistani government in Pakistan, which then occupied Kashmir.

India said the agreement was to help “strengthen regional security, improve economic and social conditions of both countries and promote regional and global stability”. 

In its latest statement, India said it had “rejected the offer of cooperation” made by the US for “a $100 billion infrastructure project and a $1 billion infrastructure program” in Pakistan. 

“India has always maintained that the bilateral agreements between India & Pakistan are for mutual benefit and to advance mutual trust and confidence, and that such cooperation is only in the interest of both nations,” the statement said.

India has not accepted this offer of a bilateral agreement as a valid one.”