• India downgraded diplomatic ties with Pakistan and announced a raft of measures, including expulsion of Pakistani military attaches, suspension of the Indus Waters Treaty of 1960 and immediate shutting down of the Attari land-transit post in view of the cross-border links to the horrific Pahalgam terror attack that killed 26 civilians.

• The new retaliatory actions shut down the few existing diplomatic mechanisms between the two sides taking bilateral relations to yet another new low.

• The Cabinet Committee on Security (CCS), under the chairmanship of Prime Minister Narendra Modi, decided that the Indus Waters Treaty of 1960 will be held in abeyance with immediate effect until Pakistan credibly and irrevocably abjures its support for cross-border terrorism

What is the Indus Water Treaty?

• India and Pakistan share the waters of six rivers — Ravi, Beas, Sutlej, Indus, Chenab and Jhelum. 

• The basin is mainly shared by India and Pakistan with a small share for China and Afghanistan.

• The Indus Waters Treaty was signed in 1960 after nine years of negotiations between India and Pakistan with the help of the World Bank, which is also a signatory. 

• Under the Treaty, the water from the three eastern rivers — Ravi, Sutlej and Beas — averaging around 33 million acre feet (MAF) were allocated to India for exclusive use.

• The water from western rivers — Indus, Jhelum and Chenab — averaging to around 135 MAF were allocated to Pakistan except for specified domestic, non-consumptive and agricultural use permitted to India as provided in the Treaty.

• The Treaty also sets forth distinct procedures to handle issues which may arise: “questions” are handled by the Commission, “differences” are to be resolved by a Neutral Expert, and “disputes” are to be referred to a seven-member arbitral tribunal called the “Court of Arbitration.” 

• As a signatory to the Treaty, the World Bank’s role is limited and procedural.

• The Treaty sets out a mechanism for cooperation and information exchange between the two countries regarding their use of the rivers, known as the Permanent Indus Commission (PIC), which has a commissioner from each country.

• The two commissioners are required to meet at least once every year, alternately in India and Pakistan.

Can India walk out of the pact unilaterally?

• The Indus Waters Treaty does not allow either country to unilaterally withdraw from the agreement.

• According to Article XII of the treaty, it states that the provisions of the treaty, or any modifications made under paragraph (3), remain in force until terminated by a mutually ratified treaty between both governments.

• If India wishes to terminate the treaty, it must adhere to the guidelines of the 1969 Vienna Convention on the Law of Treaties.

Dispute over two hydroelectric power plants

• The disagreement between India and Pakistan concerns the design features of the Kishanganga (330 MW) and Ratle (850 MW) hydroelectric power plants.

• The two countries disagree over whether the technical design features of these two hydroelectric plants contravene the Treaty. 

• The plants are located in India on tributaries of the Jhelum and the Chenab Rivers. The Treaty designates these two rivers, as well as the Indus, as the “Western Rivers” to which Pakistan has unrestricted use with some exceptions. Under the Treaty, India is permitted to construct hydroelectric power facilities on these rivers.

• In 2015, Pakistan requested the appointment of a Neutral Expert to examine its technical objections to India’s Kishenganga and Ratle hydroelectric projects.

• In 2016, Pakistan unilaterally retracted this request and proposed that a Court of Arbitration adjudicate on its objections.

• Under the pact, any difference needs to be resolved under a three-stage approach. 

• In November 2016, India had pointed out the legal untenability of the World Bank launching two simultaneous processes for appointment of a neutral expert — requested by India, and establishment of a Court of Arbitration — requested by Pakistan on Kishenganga and Ratle hydroelectric projects.

• In March 2022, the World Bank announced starting the two concurrent processes and subsequently, appointed a neutral expert and a chair of the Court of Arbitration.

• When the two concurrent processes resumed in March last year, India only cooperated with the Neutral Expert and has been skipping the process being followed by the Court of Arbitration.

• In July 2023, Court of Arbitration ruled that it has the competence to consider matters concerning the Kishenganga and Ratle hydroelectric projects.

• While India refused to take part in the Court of Arbitration, it submitted a Memorial to the Neutral Expert in August 2023.

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