India and Pakistan Share the Indus. Courts Now Decide Who Gets to Drink.

The Indus Waters Treaty, signed in Karachi on September 19, 1960, has survived three wars, a nuclear arms race, and six decades of mutual hostility between India and Pakistan. It has not, however, survived the confluence of climate change, competitive dam construction, and the discovery by both governments that international arbitration can be weaponised. What was once regarded as a model of transboundary water cooperation is now the subject of duelling legal proceedings in The Hague, paralysed enforcement mechanisms, and increasingly alarming hydrological data. Some 300 million people depend on the Indus basin for drinking water and irrigation. The treaty that governs it is, to put it mildly, under strain.

The immediate crisis concerns two Indian hydroelectric projects on tributaries of the Indus: the Kishanganga dam in Jammu and Kashmir, completed in 2018, and the Ratle project on the Chenab River, currently under construction. Pakistan argues that both violate the treaty's restrictions on how India may use the western rivers—the Indus, Jhelum, and Chenab—which were allocated to Pakistan in 1960. India counters that run-of-river hydropower is permitted under the treaty, and that Pakistan is invoking arbitration in bad faith to block projects it has no legal grounds to challenge.

The legal tangle is baroque. In 2016, Pakistan requested arbitration under the treaty's dispute resolution mechanism, administered by the World Bank. India refused to participate, arguing that the matter should first go to a neutral expert, a lower tier of adjudication. Pakistan proceeded to arbitration anyway. In 2022, the World Bank—in an unprecedented move—announced it would run both processes simultaneously. India then initiated a separate case at the Permanent Court of Arbitration in The Hague, challenging the World Bank's authority. There are now three overlapping proceedings, none of which Pakistan or India fully recognises, and no clear legal pathway to resolution.

A treaty designed for abundance

The 1960 treaty was negotiated after Partition left the Indus basin divided between two hostile states. India controlled the headwaters; Pakistan depended on rivers that now flowed through enemy territory. The solution, brokered by the World Bank over nine years, was elegant: India received full rights to the eastern rivers (Ravi, Beas, Sutlej), while Pakistan received the western rivers. India was permitted limited use of the western rivers for non-consumptive purposes, chiefly run-of-river hydropower, but could not store water in ways that materially affected flow to Pakistan.

The treaty worked, in part, because the Indus basin in 1960 was a system of abundance. Glacial melt from the Himalayas fed perennial rivers. Monsoons were predictable. Both countries could meet their needs. That hydrological reality no longer obtains.

Pakistan's water storage capacity, meanwhile, has not kept pace. The country can store approximately 30 days of average annual flow, compared to 120–220 days in the United States and Australia. The Tarbela and Mangla dams, built in the 1960s and 1970s with World Bank financing as part of the Indus treaty implementation, are silting up. Tarbela has lost 32% of its original storage capacity. Plans for new mega-dams—most notably Diamer-Bhasha, a $14 billion project on the Indus in Gilgit-Baltistan—have been stalled for two decades by financing gaps, resettlement disputes, and China-Pakistan disagreements over construction contracts.

The dam race

India, by contrast, has accelerated dam construction. Since 2014, the Modi government has approved 56 hydropower projects in Jammu and Kashmir and Himachal Pradesh, with a combined capacity of 12,780 megawatts. The stated aim is energy security and regional development. The unstated calculation is strategic: control of upstream water infrastructure gives India leverage over Pakistan in any future conflict.

That leverage was demonstrated in February 2019, two weeks after the Pulwama attack in Kashmir killed 40 Indian paramilitary personnel. Nitin Gadkari, India's water resources minister, announced that India would "stop our share of water which used to flow to Pakistan" by diverting eastern river flows and maximising use of the western rivers. The statement was legally ambiguous—India's treaty rights on the eastern rivers are unrestricted—but the political message was clear. Pakistan's foreign ministry called it "water terrorism."

Pakistan's vulnerability is acute. Agriculture accounts for 19% of GDP and employs 37% of the workforce; 90% of that agriculture depends on irrigation from the Indus system. Wheat, Pakistan's staple crop, requires winter irrigation during the rabi season, precisely when Himalayan flows are lowest. A 10% reduction in winter flow translates to a 7% decline in wheat yield, according to modelling by the Pakistan Council of Research in Water Resources. For a country that experienced food price inflation of 31% in 2023 and imports $8 billion of wheat and edible oils annually, this is not an abstract risk.

The arbitration impasse

The treaty includes a three-tier dispute resolution mechanism: technical discussions between the Indus commissioners (one appointed by each country), referral to a neutral expert for technical disputes, and a Court of Arbitration for legal questions. The system worked adequately until 2010, resolving eight disputes over dam design, water flows, and data sharing. But it was designed for good-faith disagreements over treaty interpretation, not for instrumental use of arbitration as a negotiating tactic.

The impasse reflects deeper geopolitical shifts. The World Bank, which brokered the original treaty, no longer commands the authority it did in 1960. India is now the Bank's second-largest borrower and a major shareholder; Pakistan's lending relationship is constrained by its precarious fiscal position and IMF programme conditionality. Neither country has an incentive to accept an unfavourable ruling, and the Bank has no enforcement mechanism beyond moral suasion.

India's position is that the treaty dispute mechanism has been exhausted, and that Pakistan is forum-shopping. Pakistan's position is that India is using procedural delays to complete dams that violate the treaty, creating facts on the ground that arbitration cannot reverse. Both are correct.

What should be done

The treaty requires revision, not abandonment. A renegotiation could include four elements. First, an updated hydrological baseline reflecting current and projected flows under climate change scenarios, replacing the 1960 data that still governs allocation formulas. Second, a mechanism for adaptive management, allowing allocations to adjust during drought years based on pre-agreed rules rather than annual negotiation. Third, joint investment in basin-wide water storage and efficiency, financed by multilateral development banks with conditionality tied to cooperative management. Fourth, binding arbitration with automatic enforcement provisions, removing the World Bank's discretion and both parties' ability to ignore rulings.

Neither country is likely to accept such a framework without external pressure. The United States, China, and the Gulf states all have strategic interests in South Asian stability and water security. A multilateral initiative—perhaps convened under UN Water or the Asian Development Bank, both of which lack the World Bank's conflicted position—could provide diplomatic cover for negotiations that neither government can initiate unilaterally without appearing weak.

The alternative is a slow-motion collapse. India will continue building dams; Pakistan will continue filing arbitration requests that go nowhere; both will blame the other for water shortages that are primarily driven by climate and inefficiency. Farmers in Pakistani Punjab, already facing groundwater depletion and soil salinisation, will bear the cost. So will farmers in Indian Kashmir, where flash floods from glacial lake outbursts have increased fivefold since 2000. The Indus basin does not care about the Line of Control. The treaty, for all its flaws, at least acknowledged that. Its replacement—if there is one—should do the same.

A test case

The Indus Waters Treaty was once cited as proof that even hostile states can cooperate when survival is at stake. It is now a case study in how legal frameworks designed for one era can become instruments of conflict in another. There are 276 transboundary river basins worldwide, supporting 40% of the global population. Most are governed by treaties written before climate change was understood and before upstream states had the engineering capacity to alter flows at scale. If India and Pakistan—who at least have a treaty, a dispute mechanism, and six decades of institutional memory—cannot make their system work, the prospects elsewhere are poor.

The irony is that both countries would benefit more from cooperation than from the current legal deadlock. Joint investment in drip irrigation, canal lining, and aquifer recharge could save more water than the disputed dams will ever divert. But cooperation requires trust, and trust requires a legal framework that both sides believe will be enforced. The Indus Waters Treaty once provided that. Whether it can again is the question on which 300 million people's water security now depends.