How do counterterrorism policies enable terrorist groups to thrive and survive? This article examines the relationship and how counterterrorism policies and political structures impact terrorist group success. While studies of terrorism have tended to separate the two phenomena, there is considerable complexity in the interactions between violent action and coercive state response. To demonstrate the complexity of these interactions, this article examines the persistence of three transnational terrorist groups from 1989 to 2022 – the Lashkar-e-Taiba, Jaish-e-Mohammad, and the Hizbul Mujahideen – that operate in the Kashmir region despite India’s coercive counterterrorism policies. While existing research emphasises macro-level factors in transnational terrorism, this article, based on original qualitative data, demonstrates the critical importance of granular, localised opportunities for terrorist groups to carry on. We show how these structures interact with civilian perceptions of state legitimacy and security to create nuanced patterns of support. In doing so, we challenge simplistic explanations of terrorist recruitment and resilience. The article dispels existing misconceptions about the efficacy of coercive counterterrorism to end militant groups and further suggests that softer, non-coercive approaches might not necessarily generate public sympathy. In fact, select counterterrorism policies might inadvertently legitimise violence by extremist groups to their constituency and increase sympathy in the process.