The killing of 26 tourists by terrorists in Jammu and Kashmir’s Pahalgam has caused a shift in India’s long-standing policy of keeping its water-sharing agreement with Pakistan independent from conflicts. 

However, on April 23, the government took a momentous step and decided to place the Indus Waters Treaty (IWT) in abeyance. It said that “sustained cross-border terrorism by Pakistan” has targeted Jammu and Kashmir and the uncertainty caused by terror attacks has impeded India’s full utilisation of its rights under the treaty.  

⁠Meanwhile, Pakistani Prime Minister Shehbaz Sharif’s office has said that that stopping or diverting the flow of water in violation of the treaty would be “an Act of War”. 

The diplomatic fallout between the two nations has brought a 65-year-old treaty to limelight. Here is a summary of what the treaty is and what makes it so important. 

What is the Indus Waters Treaty? 

The IWT is a World Bank-brokered water-sharing agreement between India and Pakistan. It was signed in 1960 by the then Indian Prime Minister Jawaharlal Nehru, Pakistani President General Ayub Khan and Sir William Iliff of the World Bank. 

The agreement governs how the waters of the six rivers under the Indus River system – Indus, Jhelum, Chenab, Ravi, Beas and Sutlej – are to be shared between the two countries. It gives India 20% of the water and the rest 80% to Pakistan.

While India has exclusive rights to the waters of the three eastern rivers, Ravi, Beas, and Sutlej, Pakistan is entitled to the waters of the western rivers, Indus, Jhelum, and Chenab. However, under certain conditions, India can use these western rivers for “non-consumptive” purposes like irrigation, hydropower, and navigation. 

The treaty has 12 articles and eight annexures. 

How crucial is the treaty for Pakistan? 

The IWT is essential for Pakistan because almost 80% of its cultivated land is dependent on the waters from the Indus River system. Agriculture makes up a quarter of Pakistan’s economy, employs half of its labour force and is the largest source of foreign exchange earnings. 

Moreover, major cities like Lahore, Karachi and Multan also rely on the water from the Indus system, and the survival of the country’s several hydropower projects also depends on these rivers. 

In fact in 1961, Iliff, the then Vice President of the World Bank, had said that if Pakistan is deprived of its canal water from the Indus system, the whole country would become a desert. 

How soon can India turn the tap shut on the Indus water? 

Stopping the flow of the three rivers, Indus, Jhelum and Chenab requires significant infrastructure which India does not have yet. Building dams and reservoirs will take years. 

A report in The Print said that that though India has utilised 95% of its share of water in easter rivers, it doesn’t yet have the infrastructure in place to harness the western rivers. 

“Currently, work is in various stages of implementation in four hydropower plants—850 MW Ratle, 1,000 MW Pakadul, 624 MW Kiru and 540 MW Kwar—on the Chenab to harness the water for electricity,” the report said. 

What is the mechanism to deal with disputes between two countries? 

The treaty has an in-built, multi-layered framework for conflict resolution, both bilaterally and through international arbitration. 

In case of any ‘question’ arising between the two sides, they are firstly addressed by the Indus Waters Commission, a permanent body constituted under Article VIII of the treaty. It consists of one commissioner from India and one from Pakistan. 

If the two sides cannot resolve the ‘question’ bilaterally, it becomes a ‘difference’. If these differences fall within Part I of Annexure F, they can be referred by either of the two commissioners to the neutral expert appointed by the World Bank. The appointment and functioning of the neutral expert is governed by Part II of Annexure F. 

If the differences do not fall within the said provisions or if the neutral expert believes the difference should be treated as a ‘dispute’, then it can be referred to a Court of Arbitration. 

As per Annexure G, the Court of Arbitration consists of seven members, two each from India and Pakistan. The three other arbitrators are referred to as umpires. The treaty says India and Pakistan “shall endeavour” to agree on these umpires. However, if they fail to do so in 30 days, they are chosen by drawing lots. 

What next? 

The IWT does not provide any mechanism for a party to withdraw from the agreement. It does not contain any exit clause. Article IX of the treaty, titled “Settlement of Disputes and Differences”, merely deals with the disputes arising between the two sides concerning its interpretation and application. 

Interestingly, the Indian government has not said that it is withdrawing from the treaty; it has merely kept it in abeyance, posing an interesting and complex legal question, which will be dealt with in the coming days. 

The result of the legal challenge will decide the fate of the 65-year-old treaty, which has often been described as one of the most successful international agreements. It has survived three wars and decades of strained relations between India and Pakistan. However, it now hangs in the balance. 

[Read Indus Waters Treaty]

[Read GoI order keeping IWT in abeyance]