Indus Waters Treaty Suspended: Five ways it empowers India, what it means for Pakistan's crippling economy

India suspended the Indus Waters Treaty (IWT) of 1960 with Pakistan a day after at least 26 people were killed in the Pahalgam terror attack. The Ministry of External Affairs said on Wednesday that the Indus Waters Treaty of 1960 will be held in "abeyance" until Pakistan irreversibly ends its support for cross-border terrorism.

The Indus Waters Treaty, mediated by the World Bank, split the Indus River and its tributaries between India and Pakistan and regulated the sharing of water. It had so far withstood even wars between the neighbours.

The Treaty allocates the Western Rivers (Indus, Jhelum, Chenab) to Pakistan and the Eastern Rivers (Ravi, Beas, Sutlej) to India. The Treaty allows each country certain uses of the rivers allocated to the other. Its waters are critical to both India and Pakistan.

Now that India has terminated the Indus Waters Treaty, what changes now, and what are the powers this scenario offers India? Mint decodes the issue

1. No objection to India's projects

Defence & Strategic Affairs Analyst Lt Col JS Sodhi (Retd) said India can now build projects on the banks of the rivers despite Pakistan's objections, as the treaty has been suspended.

According to the Indus Waters Treaty, there are design restrictions on building structures like dams on Indus and its tributaries.

Pakistan has raised objections to the designs in the past, but in the future, it will not be obligatory for India to consider their concerns.

In the past, Pakistan has objected to almost every project. Notable are hydroelectric projects including Salal, Baglihar, Uri, Chutak, Nimoo Bazgo, Kishenganga, Pakal Dul, Miyar, Lower Kalnai and Ratle.

The objections may no longer be applicable for the new projects.

2. No exchange of data

Lt Col JS Sodhi (Retd) told Mint, "The only immediate impact is that India will stop sharing water-flow data with Pakistan."

Not sharing flood data on the rivers with Pakistan could prove detrimental to Pakistan, especially during the monsoon when rivers swell.

The Indus Waters Treaty of 1960 states that the "data with respect to the flow in, and utilisation of the waters of, the Rivers shall be exchanged regularly between the Parties".

These data include: Daily gauge and discharge data relating to flow of the Rivers at all observation sites; daily extractions for or releases from reservoirs; daily withdrawals at the heads of all canals; daily escapages from all canals, including link canals; and daily deliveries from link canals.

3. No inspection by Pakistani officials

Lt Col JS Sodhi (Retd) said India will now bar the inspection of the Pakistani officials in India as enshrined in this treaty.

"The tours of Pakistan side to India, which are mandatory under the treaty, may now be stopped," Pradeep Kumar Saxena, who served as India's Indus Water Commissioner for over six years and has been associated with work related to the IWT, told news agency PTI.

The Indus Waters Treaty of 1960 provides that India and Pakistan shall each create a permanent post of Commissioner for Indus Waters. One of the "purpose and functions of the Commission" is "to undertake, once in every five years, a general tour of inspection of the Rivers for ascertaining the facts connected with various developments and works on the Rivers..."

4. No restrictions on "reservoir flushing"

In the absence of the treaty, "India is under no obligation to follow the restrictions on the "reservoir flushing" of the Kishanganga reservoir and other projects on western rivers in Jammu and Kashmir," Pradeep Kumar Saxena said.

The Indus Waters Treaty currently prohibits it.

PTI reported that "flushing" can help India desilt its reservoir, but then filling the entire reservoir could take days. Lt Col JS Sodhi (Retd) also observed that reservoirs can be filled, “but the present filling capacity of reservoirs will not affect Pakistan as the quantity of water is enormous.”

There are also operational restrictions on how reservoirs are to be filled and operated. With the treaty in abeyance, these are no longer applicable.

Under the Indus Waters Treaty, reservoir filling after the flushing has to be done in August — peak monsoon period — but with the pact in abeyance, it could be done anytime.

Doing it when sowing season begins in Pakistan could be detrimental, especially when a large part of Punjab in Pakistan depends on the Indus and its tributaries for irrigation, the report added.

5. No restriction on storage on western rivers'

"India will now have no restriction on storage on western rivers, particularly the Jhelum, and the country can take a number of flood control measures to mitigate floods in the Valley," Pradeep Kumar Saxena told PTI.

Indus Waters Treaty suspended: Impact on Pakistan

International Strategic and Military Analyst Shashi Asthana said holding the Indus Water Treaty in abeyance will have a "major psychological impact on people of Pakistan who take it as deprivation of water."

He said the Pakistani economy is largely dependent on water flowing into Punjab. India's suspension of the Indus Waters Treaty "will certainly act as a deterrent for people of Pakistan," he told Mint.

Major General (Dr) SB Asthana said Punjab is the heart of Pakistan, and agriculture/farming is one of the main occupations of the people of Pakistan, especially those from the heartland of Punjab. "Suspending this treaty will certainly have political consequences in Pakistan," he said.

Meanwhile, Lt Col JS Sodhi (Retd) believed that "the suspension of the Indus Water Treaty will not make any materialistic difference to either India or Pakistan for the next few years as India lacks the necessary infrastructure to hold/divert water in such large quantities."

Pakistan's economic fallout

Pakistan has already been trying to spiral out of a deep economic crisis amid high inflation rate and low forex.

On April 24, the World Bank slightly lowered its growth forecast for Pakistan to 2.7 per cent for the current fiscal year, citing continued economic stabilisation but persistent constraints from tight monetary and fiscal policies.

The World Bank had earlier predicted Pakistan’s economy to grow by 2.8 percent during the current fiscal year in its Pakistan Development Update (PDU) released in October last year, Dawn reported.

In a statement issued on Wednesday, the World Bank said that growth would remain subject to many downside risks but forecast that the economic growth rate would improve to 3.1 percent in the next fiscal year (FY26) and 3.4 percent in FY27.

Earlier in March, the International Monetary Fund (IMF) approved a loan of $1.3 billion for Pakistan to address climate change while also reaching a staff-level agreement on the first review of the already agreed USD 7 billion loan.

The new agreement spans over 28 months under the Climate Resilience and Sustainability Facility which aims to help nations address climate challenges while committing to reform, PTI reported.

Additionally, freeing $1 billion for the country under the $7 billion bailout programme would bring the total disbursements to $2 billion.

(With inputs from PTI)