Indus Waters Treaty explained: Why the 65-year-old pact matters to India & Pakistan and what its suspension means

The Indus River is once again at the centre of tensions between India and Pakistan, with the future of a 65-year-old water-sharing agreement hanging in the balance.

The Indus Waters Treaty has survived several conflicts between the two countries, but disagreements over its provisions have been growing for years. India has argued that some clauses are outdated, while Pakistan has objected to India’s construction of hydropower projects on rivers covered by the treaty.

The dispute escalated in April 2025 after the Pahalgam terror attack in the disputed region of Kashmir killed mostly Indian tourists.

Pakistan has since pushed for talks to restart the agreement. India, however, maintains that the treaty is “in abeyance”.

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The issue has gained fresh attention after the Permanent Court of Arbitration in The Hague ruled on August 31 that India must comply with the treaty. India rejected the ruling and described the arbitration panel as an illegally constituted body.

So, what exactly is at stake?

What does the Indus Waters Treaty say?

The dispute dates back to the partition of British India in 1947. The irrigation system was divided without taking the new India-Pakistan boundary into account. In April 1948, India withheld water from canals flowing into Pakistan, triggering an international water dispute.

In 1960, with mediation by the World Bank, India and Pakistan signed the Indus Waters Treaty. Under the agreement, Pakistan received unrestricted use of the three western tributaries, while India received the three eastern tributaries.

The western rivers account for about 80% of the Indus system’s water. India is allowed to use the western rivers while they are in its territory for “non-consumptive use” such as hydropower and irrigation, subject to certain limitations.

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The treaty permits only very limited storage of water from the western rivers. This has allowed India to construct run-of-the-river hydropower projects that do not change the course of the rivers or deplete downstream levels.

India and Pakistan are also required to share hydrological, flood and discharge data.

Why did the treaty come under pressure?

Pakistan has objected to India’s construction of two dams, Kishanganga and Ratle, arguing that they violate the treaty.

India has sought to renegotiate the agreement since 2023, citing population, climate and technological changes that it says have not been taken into account. India now says the treaty is “in abeyance”.

The Permanent Court of Arbitration in The Hague ruled on August 31 that India must comply with the treaty. India rejected the ruling and called the arbitration panel an “illegally constituted body”.

While rulings under international treaties can be legally binding, enforcing them can be difficult when a country refuses to comply.

India has not stopped water flowing to Pakistan. But by suspending treaty cooperation, New Delhi has greater freedom to develop projects and use more water upstream.

India’s target of building 500 GW of renewable energy capacity by 2030 is also putting pressure on it to increase hydropower projects. Pakistan’s main concern is that India could now fast-track projects that significantly alter water flows.

What is the Indus River system?

The Indus Basin stretches across China, India, Pakistan and Afghanistan and supports nearly 300 million people. Its irrigation system is the largest in the world.

The 3,180-km-long Indus River originates in southwest Tibet. It gets water from melting snow and glaciers in the Hindu Kush, Himalaya and Karakoram mountain ranges, as well as from monsoon rains.

The river flows into Ladakh and then through disputed territory between India and Pakistan.

Five separate tributaries feed the system. The three eastern tributaries - Ravi, Beas and Sutlej - either originate in or pass through Jammu and Kashmir, Himachal Pradesh and Punjab before entering Pakistan.

The tributaries merge in the plains of Pakistan before the Indus flows into the Arabian Sea.

Why does Pakistan depend so heavily on the Indus?

Pakistan’s dependence on the river system is particularly high. Nine in every 10 Pakistanis live in the Indus Basin. All its 21 hydroelectric plants are located in the system generating a fifth of Pakistan’s electricity .

More than 90% of Pakistan’s crops, including wheat, rice and cotton, depend on the rivers.

Agriculture contributes about 23% of Pakistan’s gross domestic product, employs more than 37% of its labour force and accounts for a quarter of the country’s exports. Pakistan can store less than 10% of the Indus’s annual flow, making continued access to the river crucial.

How important is the Indus to India?

India’s dependence on the Indus is more concentrated in the northern part of the country.

Rajasthan, Haryana, Himachal Pradesh and Delhi are among the areas facing water shortages. Punjab, which means “the land of five waters” because of the Indus River system, is also heavily dependent on it for agriculture and textile production.

India, however, has other sources of water because of its size and geography. These include river systems in the south and west, rainfall in the northeast, perennial rivers in the north and groundwater in arid areas.

But the country is also facing increasing pressure on its water resources. India is home to about 17% of the world’s population but has only 4% of the world’s freshwater resources.

Niti Aayog has warned that demand could be twice the available supply by the end of the decade, citing McKinsey & Co. and Water Resources Group data.

Annual per capita water availability is expected to fall close to the official water scarcity threshold of 1,000 cubic metres by 2050. Government estimates put it at 1,486 cubic metres in 2021.

Can India cut off Pakistan’s water supply?

Not with its current infrastructure. The Indus reaches Pakistan after flowing downstream through India. But India does not currently have the reservoirs, dams and canals needed to turn off the water flowing into Pakistan, according to the Center for Strategic and International Studies.

India threatened to cut off water access during a rise in tensions in 2016. In May 2025, it briefly stopped the flow of water from the Chenab.

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According to reports, India is planning to double the length of the 60-km Ranbir canal on the Chenab as part of its response to the Pahalgam attack. The expanded canal could divert 150 cubic metres of water per second in India, compared with the current 40 cubic metres.

However, experts say India would need a decade or more to build the infrastructure required for such large-scale diversion. The Baglihar dam, which holds about 428 million cubic metres, took around 15 years and at least $1 billion to build.

Pakistan has said that any attempt to prevent the flow of water would be considered an act of war.

Any move to block water could also affect India’s relations with other countries with which it shares rivers, including Nepal, Bangladesh and China.

India has a water treaty with Bangladesh covering the sharing of Ganges River water. That treaty is due to expire in 2026 and will be up for renewal. China could also be affected by the dispute. It has invested significantly in Pakistan’s hydroelectric system as part of its Belt and Road Initiative.

China has access to the upper section of the Brahmaputra River, which flows into India, and has been building dams and hydropower projects there for the past decade.