Indus Waters Treaty (IWT), 1960

India rejected the ruling of the Hague-based Court of Arbitration (CoA) regarding the abeyance of the Indus Waters Treaty (IWT). India termed the tribunal illegally constituted and asserted that it has no jurisdiction over India’s sovereign decisions.

Court of Arbitration’s Ruling

Treaty Remains in Force

The Court of Arbitration ruled that India’s decision to place the IWT in abeyance following the April 2025 Pahalgam terror attack was not permissible under the treaty or international law.

Terrorism and Treaty Suspension

The court observed that the treaty governs water rights and does not address terrorism or the use of force. It concluded that cross-border terrorism does not establish a material breach of the water pact by Pakistan.

Ratle Hydroelectric Project

The court imposed interim restrictions on certain construction activities at the Ratle Hydroelectric Project on the Chenab River until 90 days after the Neutral Expert gives a final decision, expected in 2027.

India’s Stand

Dispute Resolution Mechanism

In 2016, Pakistan requested the establishment of a Court of Arbitration, while India requested the appointment of a Neutral Expert to examine technical issues related to hydroelectric projects.

India argues that conducting both proceedings simultaneously violates the treaty’s sequential dispute-resolution mechanism.

Role of the World Bank

The World Bank paused both processes in 2016 but allowed them to proceed simultaneously in 2022. India joined the Neutral Expert process but boycotted the Court of Arbitration proceedings.

India maintains that the CoA has no jurisdiction over its decision to keep the IWT in abeyance.

What is the Indus Waters Treaty, 1960?

Background

The Indus Waters Treaty is a water-distribution agreement brokered by the World Bank and signed between India and Pakistan in Karachi in 1960. It establishes the rights and obligations of both countries regarding the use of the Indus River system.

Allocation of Rivers

Eastern Rivers — India

The Ravi, Beas, and Sutlej were allocated to India for exclusive and unrestricted use.

Western Rivers — Pakistan

The Indus, Jhelum, and Chenab were allocated largely to Pakistan.

India’s Rights on Western Rivers

India is permitted limited uses of the western rivers, including domestic use, agriculture, and run-of-the-river hydroelectric power generation, subject to the treaty’s technical conditions.

Dispute Resolution Mechanism

The IWT establishes a graded and sequential mechanism for resolving disputes between India and Pakistan.

1. Permanent Indus Commission (PIC)

Minor questions are initially addressed bilaterally through the Permanent Indus Commission.

2. Neutral Expert

Unresolved technical differences are referred to a qualified engineer appointed by the World Bank.

3. Court of Arbitration (CoA)

Legal disputes may be referred to an ad hoc Court of Arbitration under Annexure G of the treaty, subject to the treaty’s provisions.

Hydroelectric Project Dispute

Kishenganga Project

The 330 MW Kishenganga Hydroelectric Project is a run-of-the-river project on the Kishenganga River, a tributary of the Jhelum, in Jammu and Kashmir.

Ratle Project

The 850 MW Ratle Hydroelectric Project is located on the Chenab River in Jammu and Kashmir.

Nature of the Disagreement

Pakistan argues that India’s hydroelectric projects have pondage capacities larger than technically required, potentially affecting downstream water flows. Pakistan therefore sought adjudication by the CoA, while India requested a Neutral Expert to examine the technical design issues.

Court of Arbitration and Permanent Court of Arbitration

The Court of Arbitration (CoA) is an ad hoc five-member tribunal established under Annexure G of the IWT, 1960. It serves as the treaty’s dispute-resolution mechanism for legal disputes between India and Pakistan.

The Permanent Court of Arbitration (PCA) in The Hague serves as the Secretariat for the tribunal. The present CoA was constituted by the World Bank at Pakistan’s request in 2022–23.