"the negative effects of the 1990s cutoff" are mostly posthoc propaganda from people who know what works best for the ignorant rich uncle that they want to "touch". The policy of using Jihadis was developed while aid was flowing in the 1980s and continued unabated and expanded when aid was cut off (and the cutoff officially had nothing to do with those policies)..the increase in Jihadist recruitment and usage was not a petulant response to the cutoff. It was focused on wresting Kashmir, creating an "area of influence" in Afghanistan/central Asia, developing muscle against domestic opponents and Islamicate fantasies (with differing proportions for individual policymakers). It was also thought that this policy, as long as it was mostly "India-centric", was not a "red-line" for the Uncle.
It is worth keeping in mind that the person across the table is also a person, with aims or ambitions of his own. And with the ability to churn out propaganda that serves to justify said aims and ambitions.
And to keep in mind that we have a bigger stake in knowing how to play the uncle than the uncle had in playing us. We are therefore naturally better at it.