The Indus Waters Treaty faces a perfect storm

Having endured all ebbs and flows in the India-Pakistan relationship so far, the IWT must now find a way out of the existing politico-legal quagmire.

September 19, 1960: Prime Minister Jawaharlal Nehru and Pakistani President Ayub Khan sign a treaty for the distribution of the Indus Basin waters. | Photo Credit: THE HINDU ARCHIVES

Flowing from the Kailash ranges in Tibet, the 3,180-km-long Indus is one among a handful of Asian rivers that offer a tidal bore—a strong tide that pushes against the river’s natural current. In its 64 years of existence, the 1960 Indus Waters Treaty (IWT) between India and Pakistan faces a similar phenomenon today: a growing tide of technical and political differences that runs against the security of the treaty’s sustenance. Borne out of prolonged negotiations between India, Pakistan, and the World Bank in the late 1950s, the IWT has long been touted as the benchmark of institutional bilateral water-sharing arrangements, especially as it has weathered the storms of three wars and multiple crises, proving its isolation from political disputes. Between the treaty coming into force in 1960 and 2022, the Commissioners of the Permanent Indus Commission (PIC) from both sides have met 118 times in India and Pakistan. Today, the IWT arguably faces a perfect storm: a protracted technical dispute over the interpretation of treaty provisions, situated against a “minimal” bilateral relationship between India and Pakistan sans diplomatic or economic ties. While the former’s resolution has run into a headwind, the latter shows no signs of a thaw, jointly producing an unprecedented predicament.

The arrangement between India and Pakistan for the Indus system was envisaged as a cooperative engineering effort focussed on development, borne out of the initial efforts of David Lilienthal.¹ With the support of the World Bank since 1951, then presided over by Eugene Black, India and Pakistan eventually reached a pragmatic water-sharing arrangement instead, with the bank stepping into a mediatory role not assigned to it in its statutes. Rather than consider Lilienthal/Black’s proposals for joint development of the Indus, Nehru asserted that while both sides should have a joint consultative and advisory machinery, the operation of development projects should be separate.²

By 1960, the IWT had divided the Indus system, with the western rivers of Indus, Jhelum, and Chenab being assigned to Pakistan, and the eastern rivers of Ravi, Sutlej, and Beas to India. While roughly 80 per cent of the system’s waters serviced Pakistan, India was free to manipulate the western rivers for domestic, agricultural, and non-consumptive uses, including power generation projects that are “run of the river”—meaning that water is allowed to “let flow” to the lower riparian without disruption. Because of India’s status as the upper riparian state, Indian projects have been scrutinised more than Pakistani projects against this provision, directly contributing to the current dispute.

Three-stage dispute resolution mechanism

The IWT has a three-stage dispute resolution mechanism that is well known: a “question” over treaty interpretation is referred to the PIC, a “difference” is referred to a Neutral Expert (NE), and a “dispute” is referred to a Court of Arbitration (CoA).³ While both the NE and CoA are appointed by the World Bank, Article VI of the IWT explicitly states that the provisions enabling the CoA will not apply to any difference while it is being heard by the NE.

Pakistan has filed a complaint with the Court of Arbitration in the Hague that the Kishanganga hydroelectric power project violates the Indus Water Treaty. Here, stones drilled from the headrace tunnel of the project dumped on a mountain in Bandipora, north of Srinagar, a 2014 picture. | Photo Credit: NISSAR AHMAD

Both India and Pakistan have had varying experiences at these World Bank-facilitated processes. For instance, India secured a favourable outcome for its Baglihar Project on the Chenab river in 2007 through a NE-led process. On the other hand, Pakistan secured a CoA-induced obligation in 2013 for India to release the requisite volume of water for Pakistan’s Neelum-Jhelum project; India, too, claimed victory in this decision, which also upheld India’s rights to proceed with the Kishanganga hydropower project. While Pakistan’s objections to the designs of India’s Kishanganga and Ratle (on the Chenab river) hydropower projects date to 2006 and 2012 respectively, the differences that remained despite the 2013 CoA decision on the Kishanganga project were sought to be mediated through an NE. However, in the months that followed, Pakistan turned away from the NE and favoured the constitution of another CoA, a move that not only India (which sought an NE) but also Pakistan’s counsel in the 2013 case criticised. Moreover, the World Bank itself recognised the procedural puzzle. It paused both proceedings, and its press release from December 12, 2016, reads: “Both processes initiated by the respective countries were advancing at the same time, creating a risk of contradictory outcomes that could potentially endanger the Treaty.”

In an inexplicable move that undermined its own 2016 reasoning, the bank announced in April 2022 that it would resume both processes simultaneously—with Michel Lino as NE and Prof. Sean Murphy as CoA Chairman. This means that at least until April 2022, the IWT’s dispute resolution mechanism and the bank’s involvement in mediating differences and disputes evidently continued to generate negotiations in good faith between India and Pakistan, notwithstanding their latent grievances. Both sides also had enough concerns about projects in either state causing fait accompli/ecological risks—the Kishanganga project for Pakistan and the Diamer Basha dam for India.

Highlights

• Until April 2022, the IWT’s dispute resolution mechanism and the World Bank’s involvement in mediating differences and disputes generated negotiations in good faith between India and Pakistan.
• On January 25, 2023, India sent a formal notice to Pakistan, calling for a modification of the IWT, justifying the notice on the basis of Pakistan’s “intransigence” vis-a-vis the IWT.
• Pakistan dismissed it as a demonstration of bad faith and an attempt to divert attention from the ongoing proceedings at the Hague. By August 30, 2024, India escalated its resistance to the proceedings at the CoA.

India calls for modification of IWT

On January 25, 2023, India sent a formal notice to Pakistan, calling for a modification of the IWT, with Indian officials justifying the notice on the basis of Pakistan’s “intransigence” vis-a-vis the IWT and to “incorporate the lessons learned over 62 years”. Pakistan’s reaction to the unprecedented development was quick and bitter; its Attorney General dismissed it as a demonstration of bad faith and “an attempt to divert attention from the ongoing proceedings at the Hague” on the Kishanganga and Ratle projects. Indeed, just hours before India sent the notice, the CoA began its first hearings to determine if it had the competence to consider Pakistan’s complaint. India boycotted these proceedings. By July of that year, the court affirmed such competence, “in a unanimous decision which is binding on both parties and without appeal”, rejecting India’s objections. India extended its boycott to the merits stage of the case, which continued ex parte (in India’s absence), and escalated its objections. India asserted that it “cannot be compelled to recognize or participate in illegal and parallel proceedings not envisaged by the Treaty”. While India maintained its “consistent and principled” stand that the court has been constituted in contravention of the treaty’s provisions, Pakistan joined the NE’s proceedings that began on India’s request.

Work in progress on the Kishanganga hydroelectric project in Bandipora district, Srinagar, in May 2012. | Photo Credit: NISSAR AHMAD

By August 30, 2024, India escalated its resistance to the ongoing proceedings at the CoA and Pakistan’s indifference to India’s concerns. It sent a fourth notice to Islamabad, calling for intergovernmental consultations under Article XII(3) of the IWT due to “fundamental and unforeseen” changes in circumstances that require a reassessment of the treaty. More significantly, India officially suspended meetings of the PIC (which has not met since May 2022) until Pakistan committed itself to renegotiating the IWT’s provisions. The Pakistani Foreign Office responded by reiterating that the IWT has served bilateral interests well for decades and is the “gold standard of bilateral treaties on water sharing…. Pakistan is fully committed to its implementation.” It added that it expected India would remain committed to the treaty and that the PIC is the “appropriate forum” to discuss the treaty’s issues.

India’s January 2023 notice was partly motivated by its objections to the World Bank’s continued involvement as a third-party mediator, catalysed by the bank’s 2022 decision on the parallel proceedings. In sharp contrast, Pakistan’s rationale for cooperating with the NE and resisting India’s call to modify the treaty’s dispute resolution mechanism in particular is grounded in Pakistan’s desire for continued international involvement in the IWT. This arguably mirrors the positions of both sides on their larger dispute over Kashmir, where India has rejected third-party involvement since the Simla Agreement of 1972, while Pakistan continues to seek internationalisation of the dispute.

Moreover, India’s rationale for stopping the PIC meetings is to force Pakistan into talks over the treaty’s provisions at large, even if a strong focus remains on the dispute resolution mechanism. Pakistan has few incentives to do so unless India itself agrees for talks at the political level; Pakistan has called for engagement numerous times, at multiple levels of leadership, over the past two years, while India has responded with indifference because Pakistan associates any engagement with India to the demand that India roll back its 2019 constitutional changes in Jammu and Kashmir. India’s “de-hyphenation” of Pakistan at the strategic (political) level seems to have met its match from Pakistan at the tactical (IWT) level. This, of course, can be punctured if the parallel mediation process throws up new issues.

Essentially, Pakistan is the high contracting party that objects to two projects (the Kishenganga and Ratle hydroelectric plants) which it alleges contravene the IWT’s provisions. However, it is also Pakistan that has the greatest interest in retaining the treaty in its current form. Both require Indian cooperation, especially the enforcement of any arbitration decision. Hence, in the event that the CoA and the NE deliver decisions that contradict each other even in part, Pakistan (by its own admission) will have to resort to bilateral consultations with India to service its own interests.

At odds over treaty interpretation

Both states are also fundamentally at odds over treaty interpretation. In January 2023, India’s External Affairs Minister asserted that the issue was a technical matter to be discussed by the PIC before “next steps are discussed”. By August 2024, India eliminated the PIC from the equation entirely. From India’s perspective, the PIC’s ambit extends insofar as differences over the IWT’s extant provisions and their implementation are concerned. Amendments to the provisions itself and changes to the treaty fall to the governments of both sides. Here, Article XII(3) fully empowers India to call for such consultations. Even if Pakistan interprets the PIC’s jurisdiction to extend into amendments of or additions to the treaty itself, it does not prejudice India’s invocation of XII(3), which does not make any intergovernment consultations contingent on PIC meetings.

Manmohan Singh, the then Prime Minister, laying the foundation stone of the Ratle hydroelectric project at Darab-Shala in Kishtwar district on June 25, 2013. | Photo Credit: PTI

The IWT in its current form has long been deemed untenable, especially due to significant demographic and climatic changes since the treaty was signed in 1960, and badly in need of amendments. In 2021, the Parliamentary Standing Committee on Water Resources in India explicitly recommended such amendments, calling for an “institutional structure or legislative framework to address the impact of climate change on water availability in the Indus basin”. Ideally, both states should negotiate such amendments under the auspices of Article XII(3) of the IWT at the intergovernmental level. However, the prospect of any negotiation over updating the treaty is clouded by perceptions of bad faith in an ongoing primary dispute over its implementation. This, in turn, is exacerbated by a secondary dispute over how the primary dispute should be resolved.

Adding to this complex mix of politico-legal variables is India’s increasing association of its obligations under the IWT with security concerns. The resurgence in Pakistan’s support for cross-border terror, especially in Jammu, has undoubtedly been factored into India’s fourth and latest notice, since Indian officials added it as an explicit concern driving India’s approach to the treaty. Indeed, cross-border terror has induced New Delhi to double down on its long-standing concerns pertaining to the one treaty that has endured all ebbs and flows in the relationship. The cumulative effect of the steadily escalating issues over the IWT only undermines the idea of pacta sunt servanda—the oldest principle of customary international law and codified in the Vienna Convention of 1969⁴—that parties to an agreement will abide by its provisions in good faith.

Despite its increasing securitisation and politicisation, the imperative to adapt the IWT to the threats of climate change remains. However, similar to the founding rationale for the arrangement and true to Lilienthal’s ideas, the inescapable tyranny of geography necessitates Indian and Pakistani engagement over the Indus system, whether direct or indirect, for the welfare of their populations—whether within the IWT framework or within an entirely new mechanism. While the IWT’s fate can spell a further breakdown in India-Pakistan ties, it is equally possible that renegotiating the arrangement in part or in whole can generate greater bilateral trust that can flow upstream to the political level, breaching the dam of disengagement.

Bashir Ali Abbas is a Research Associate at the Council for Strategic and Defense Research, New Delhi, and a South Asia Visiting Fellow at the Stimson Center, Washington, DC. The views expressed are strictly his own.

Footnotes

1. Niranjan Gulhati, President Honoraire, International Commission on Irrigation and Drainage, (1973), “Indus Waters Treaty: An Exercise in International Mediation,” Allied Publishers, pages – 91-96.
2. Letter from Jawaharlal Nehru to the President of the World Bank, 25 September, 1951. Quoted in “Indus Waters Treaty”.
3. Articles IX of the Indus Waters Treaty, titled “Settlement of Differences and Disputes”.
4. Article 26 of the Vienna Convention on the Law of Treaties, 1969.