The statement "There is no permanent friend or permanent enemy" perfectly encapsulates Kautilya's (Chanakya's) pragmatic and amoral view on sovereignty and statecraft, as expounded in his Arthashastra. For Kautilya, the primary objective of a sovereign (the King) is the preservation, expansion, and security of his state (sva-rāṣṭra). All foreign policy decisions, alliances, and hostilities are to be dictated solely by this overarching goal, not by sentiment, morality, or historical ties.

Kautilya's Mandala Theory (Circle of States) explicitly details this. The immediate neighbors of a king are considered natural enemies, while neighbors of the enemy are potential friends. This dynamic illustrates the fluidity of relationships. A friend today might become an enemy tomorrow if their interests diverge or their power balance shifts.

The king's sovereignty is paramount, and its defense and enhancement require constant vigilance and adaptation. Relationships are purely transactional, based on the principle of artha (material gain/security). Therefore, a wise sovereign must constantly assess the relative power, intentions, and interests of other states, forming alliances when beneficial and breaking them when disadvantageous. There is no room for sentimentality in the pursuit of state power. This realpolitik approach, where self-interest is the sole guide, renders concepts of permanent friendship or enmity obsolete.