Context: The Permanent Court of Arbitration (PCA) has issued two further orders in the dispute raised by Pakistan regarding the Indus Waters Treaty (IWT), ruling that India’s decision to place the Treaty in “abeyance” is not permissible under the Treaty or applicable international law.
It also directed India to halt construction at the Ratle Hydroelectric Project until the technical dispute is resolved.
India has rejected these orders, arguing that the Court itself was constituted in violation of the IWT and that the Treaty’s dispute-resolution mechanism does not permit parallel proceedings.
Indus Waters Treaty: Basic Framework
The IWT, signed in 1960, governs the sharing of the waters of the six rivers of the Indus system.
Eastern Rivers — Ravi, Beas and Sutlej: allocated primarily for India’s unrestricted use.
Western Rivers — Indus, Jhelum and Chenab: allocated primarily to Pakistan, while India retains limited rights for specified uses such as domestic use, agriculture and hydropower generation.
Pakistan has historically objected to several Indian projects on the Western Rivers, particularly hydroelectric projects in Jammu and Kashmir.
Three-Level Dispute-Resolution Mechanism
1. Permanent Indus Commission
Questions concerning the interpretation or application of the Treaty must first be addressed through the Permanent Indus Commission, comprising the Indus Commissioners of India and Pakistan.
2. Neutral Expert
If the Commissioners cannot resolve the matter, a “difference” is deemed to have arisen.
If the difference falls within 23 specified categories, it can be referred to a Neutral Expert.
3. Court of Arbitration
If the matter does not fall within those specified categories, it can become a “dispute” and be referred to a Court of Arbitration.
A Court of Arbitration can also come into the picture if the Neutral Expert determines that the whole or part of the matter should be treated as a dispute, or if both countries agree to this route.
Why India Rejects the Arbitration
In the present case, India argues that Pakistan’s approach to the Court of Arbitration created a parallel process on an issue already before a Neutral Expert.
According to India, the two processes could potentially produce contradictory and irreconcilable decisions, which the Treaty’s mechanism was designed to prevent.
The World Bank had established a Neutral Expert at India’s request, while the Court of Arbitration was subsequently constituted following Pakistan’s initiative.
India therefore did not participate in the arbitration and did not appoint its arbitrator.
The Court nevertheless proceeded with two arbitrators nominated by Pakistan and three “umpires” nominated by institutions specified under the Treaty.
The Court subsequently declared itself competent to adjudicate the matter and held that its decisions were final and binding.
India has rejected the Court’s earlier awards as well, including the previous award issued in May.
India’s Position on the Latest Orders
The Ministry of External Affairs has maintained that the Court was constituted by the World Bank in breach of the Treaty and therefore its latest “award” has no legitimacy for India.
India continues to maintain that its decision to keep the IWT in abeyance remains in force.
Since India has not participated in the proceedings, the Court has limited practical means of enforcing its orders against India.
Why the Orders Matter for Pakistan
Although the Court cannot directly enforce its orders, Pakistan can use them to strengthen its diplomatic and legal narrative against India.
Pakistan is likely to invoke the orders in international forums and portray India as a country unwilling to respect international law and treaty obligations.
The orders could also provide Pakistan with a basis for exploring additional international legal and diplomatic options.
Possible Options for Pakistan
UN Security Council Route
Pakistan’s most ambitious option would be to persuade the United Nations Security Council (UNSC) to adopt a resolution framing the Indus Waters dispute as a security issue.
Pakistan could attempt this while it remains a non-permanent member of the UNSC.
Another possibility would be to seek a UNSC or UN General Assembly reference to the International Court of Justice (ICJ).
However, these remain difficult and unlikely scenarios because India has considerable diplomatic influence at the United Nations and could attempt to block such initiatives.
International Diplomatic Narrative
Pakistan is more likely to intensify its narrative that India is violating treaty commitments and disregarding international law.
India will need to counter this diplomatically while defending its legal position regarding the Treaty’s status and the arbitration process.
India’s Road Ahead
Accelerating Water Infrastructure
India’s immediate priority is to complete projects that enable it to make fuller use of its rights over the Indus, Jhelum and Chenab.
India is pursuing around eight infrastructure projects in Jammu and Kashmir worth approximately ₹50,000 crore on these rivers.
At least one proposed project involves diversion of water from the Chenab to the Beas, which goes beyond the Treaty because the IWT does not permit such inter-basin transfer.
Maintaining the “Abeyance” Position
The IWT contains no provision for unilateral termination or suspension by either country.
India therefore deliberately uses the term “abeyance”, rather than formally claiming unilateral termination.
India disengaged from the Neutral Expert process last year, despite having originally requested it, because continued participation could be interpreted as accepting the Treaty framework.
Similarly, India continues to share hydrological data with Pakistan, but does so through its High Commission in Islamabad rather than through the Permanent Indus Commission, consistent with its position that the Treaty is currently in abeyance.
Possibility of Renegotiation
India has suggested that the two countries renegotiate the IWT.
Pakistan is reluctant because it recognises that a new agreement may not provide it terms as favourable as the existing Treaty.
India is also likely to insist that any new agreement be strictly bilateral, without a third-party role for institutions such as the World Bank.
Pakistan is unlikely to readily accept such an arrangement.
Can the Rivers Flow Without a Treaty?
The present deadlock may remain unresolved for the foreseeable future, raising the possibility that the rivers will continue to flow without a formal water-sharing agreement.
There are numerous examples globally of transboundary rivers without comprehensive water-sharing treaties.
India itself shares rivers with China, Bhutan, Nepal, Bangladesh and Myanmar, and most of these relationships do not have comprehensive water-sharing arrangements comparable to the IWT.
Difference Between “Abeyance” and “Stopping Water”
Keeping the IWT in abeyance does not mean India has stopped or can completely stop the flow of Indus-system waters to Pakistan.
Pakistan will continue to receive substantial river flows because of the physical geography and hydrology of the basin.
Even after India completes its planned projects on the Western Rivers, Pakistan will continue to receive water.
However, population growth and climate change have reduced per-capita water availability, making effective management of the shared basin increasingly important.
The Indus river system nevertheless continues to contain sufficient water to support populations in both India and Pakistan, underscoring the importance of cooperative and sustainable basin management.
Key Terms for Prelims
Permanent Court of Arbitration (PCA): An international institution based in The Hague that facilitates arbitration and other dispute-resolution mechanisms between states and other entities.
International Court of Justice (ICJ): The principal judicial organ of the United Nations, based in The Hague, which adjudicates legal disputes between states and gives advisory opinions on legal questions referred by authorised UN organs/agencies.
Permanent Indus Commission: A bilateral mechanism created under the IWT to facilitate cooperation, information exchange and resolution of questions concerning the Treaty.
Neutral Expert: A mechanism under the IWT for resolving specified technical “differences” between India and Pakistan.
Broader Significance
Water security: Population growth, climate change and increasing water demand make transboundary water management increasingly important.
International law: The dispute raises questions about the relationship between treaty obligations, unilateral suspension/abeyance and international dispute-resolution mechanisms.
Geopolitics: The IWT has historically survived wars and periods of intense India–Pakistan hostility; its present crisis represents a significant shift in bilateral water diplomacy.
Federal and regional development: Greater utilisation of India’s permitted water rights has implications for hydropower, irrigation and infrastructure development in Jammu and Kashmir.
Prelims Question
Q1. With reference to the dispute-resolution mechanism under the Indus Waters Treaty (IWT), consider the following pairs:
Mechanism
Nature of matter it primarily addresses
1. Permanent Indus Commission
Questions concerning interpretation or application of the Treaty
2. Neutral Expert
Differences falling within specified categories under the Treaty
3. Court of Arbitration
Disputes outside the specified categories for reference to a Neutral Expert
4. Court of Arbitration
Any disagreement can be directly referred to it by either country without following the Treaty procedure
Which of the pairs given above are correctly matched?
(a) 1 and 2 only (b) 1, 2 and 3 only (c) 2, 3 and 4 only (d) 1, 2, 3 and 4
Answer: (b)
Explanation:
Pair 1 — Correct: The Permanent Indus Commission is the first level for questions concerning interpretation and application of the Treaty.
Pair 2 — Correct: A Neutral Expert can address a “difference” falling within the specified categories under the IWT.
Pair 3 — Correct: Matters qualifying as a “dispute” can be taken to the Court of Arbitration.
Pair 4 — Incorrect: The Treaty establishes a structured, sequential mechanism; either party cannot simply bypass the prescribed procedure and directly invoke arbitration for any disagreement.
