Indus Water Treaty Developments

January 22, 2025

The Neutral Expert (NE) under the 1960 Indus Water Treaty (IWT) recently stated that he has the authority to resolve disputes between India and Pakistan about the design of hydroelectric projects on Indus Treaty rivers. India stated that it “welcomed” this decision

What is Indus Water Treaty?

The Indus Water Treaty was signed on September 19, 1960.
It was brokered by the World Bank after extensive negotiations.
The treaty governs the sharing of water from the Indus River and its five tributaries between India and Pakistan.
It aims to promote cooperation and information exchange on water use.

Key Provisions of the Treaty

The IWT divides six Himalayan rivers into eastern (Sutlej, Beas, Ravi) and western (Indus, Jhelum, Chenab) tributaries.
India has unrestricted use of eastern rivers, while Pakistan uses the western rivers but with certain Indian rights (e.g., hydroelectric projects).
Pakistan has unrestricted use of 80% of the water, while India uses the remaining 20%.
It establishes a Permanent Indus Commission to facilitate annual meetings and cooperation.

Dispute Resolution Mechanism

The IWT includes a three-step dispute resolution process:

Step 1: Disputes must first be addressed by the Permanent Indus Commission (PIC).
Step 2: If unresolved, the issue moves to the Neutral Expert (NE) appointed by the World Bank.
Step 3: If unresolved, it proceeds to a Court of Arbitration (CoA).
India believes each step must be fully exhausted before moving to the next, while Pakistan bypassed this sequence and directly sought the CoA in 2016.

Hydroelectric Projects Under Scrutiny

The Kishenganga Hydroelectric Project (330 MW) in Jammu and Kashmir has faced objections from Pakistan regarding its impact on river flow. The Ratle Hydroelectric Project (850 MW) on the Jhelum and Chenab Rivers is also under examination. Both projects are for India’s energy needs.

Pakistan’s Position

Pakistan sought both a Court of Arbitration and a Neutral Expert in 2016, leading to the World Bank facilitating both mechanisms in 2022.
This has led to tensions, with India rejecting the dual processes as a violation of the treaty’s mechanisms.
India believes each step must be fully exhausted before moving to the next, while Pakistan bypassed this sequence and directly sought the CoA in 2016.

India’s Recent Actions

Stopped attending PIC meetings since May 2022, demanding treaty renegotiation.
Sent four letters to Pakistan in 2023 to initiate renegotiation talks but received no formal response.

NE’s Clarification:

The NE stated he can address the technical issues without invalidating the ongoing CoA process but emphasized that the seven issues referred to him cannot be taken up by the CoA.
Historically, NE decisions have been accepted by both parties under the treaty.

Next Steps

The NE will hear both sides on whether the design parameters of the Kishenganga and Ratle projects align with the IWT and issue a final decision.

Water Management Challenges

The IWT aims to manage cross-border water resources effectively. However, ongoing disputes reflect broader geopolitical tensions. The management of shared water resources remains a critical issue for both nations, impacting millions of lives.

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