Two months after his repatriation, on 9 July 1963 Dalvi was appointed Commander, Poona Sub-Area. He was promoted substantive brigadier on 13 October 1964, with appointment as Commander, Bihar and Orissa Independent Sub-Area on 4 May 1965. With the outbreak of war with
Pakistan later that year, he was given command of a brigade on 12 September. On 29 September 1966, Dalvi was posted to Army HQ as Deputy Director of Staff Duties (DDSD). He took voluntary retirement from the Army on 3 March 1967. ==
The Himalayan Blunder==