SYLLABUS: 

GS-2: India and its neighborhood relations and Bilateral, regional, and global grouping and agreements involving India and/or affecting India’s interests.

Context: India rejected an award issued by the Court of Arbitration (CoA) at The Hague concerning maximum pondage at Indian hydroelectric projects on the Indus River system, reiterating that it does not recognise the tribunal as legitimately constituted.

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• The Ministry of External Affairs termed the CoA an “illegally constituted” body and declared all its proceedings, awards, and decisions as “null and void”.
• The five-member CoA, constituted in January 2023 at Pakistan’s request, is examining disputes related to the design of India’s Kishenganga and Ratle hydroelectric projects on the Indus River system.
• India has refused to participate in the arbitration process, arguing that the disputes are technical in nature and fall within the jurisdiction of the Neutral Expert mechanism provided under the Treaty.
• In its August 2025 Award on Issues of General Interpretation, the CoA reportedly ruled largely in Pakistan’s favour by restricting India’s calculation of permissible pondage and limiting design flexibility for run-of-river projects.
• India placed the IWT in abeyance in April 2025 after the Pahalgam terror attack in Jammu and Kashmir, marking a major shift in its approach towards the Treaty.

About the Indus Waters Treaty (IWT)

• It is a landmark transboundary water-sharing agreement signed between India and Pakistan in September 1960,facilitated by the World Bank, to manage the distribution of water from the Indus River System, which consists of six rivers: Indus, Jhelum, Chenab, Ravi, Beas, and Sutlej.
• These rivers originate from Tibet and flow through the Himalayan ranges into India and Pakistan, which makes Pakistan as the lower riparian state.

Key Provisions of the Treaty

• Water Allocation:
  • Eastern Rivers (Ravi, Beas, Sutlej): Allocated to India for unrestricted use.
  • Western Rivers (Indus, Chenab, Jhelum): Allocated to Pakistan for unrestricted use, with some exceptions for India’s non-consumptive agricultural and domestic needs.
• India’s Rights and Restrictions:
  • According to Article III (1) of the IWT, “India is under obligation to let flow” waters of the Western Rivers to Pakistan.
  • India is also permitted to build "run of the river" hydropower projects, which do not require live storage of water. However, it must share project details with Pakistan, which has 3 months to raise objections.
• Article IX of the Treatyestablishes a three-step Dispute Resolution Mechanism:
  • Permanent Indus Commission: First level, where representatives from both countries discuss and attempt to resolve disputes.
  • Neutral Expert: If technical differences or unresolved questions remain, either country can request the World Bank to appoint a Neutral Expert (NE)to make a decision.
  • Court of Arbitration: If either party disagrees with the NE’s decision or if there are disputes about the treaty's interpretation, the issue can be referred to a Court of Arbitration.
• According to the treaty, neither India nor Pakistan can unilaterally withdraw from the agreement, but Article XII allows for modifications to the treaty provisions only through a “duly ratified treaty” that both governments must mutually agree upon, essentially meaning any changes require the consent of both parties involved.

Significance of the Treaty

• The IWT is regarded as one of the world’s most durable international water-sharing agreements, having survived wars, military standoffs, and prolonged diplomatic tensions between India and Pakistan.
• It has often been cited globally as a successful example of conflict management and cooperation over shared water resources despite hostile political relations.
• The Treaty also reflects the principle that transboundary rivers should be governed through legal and institutional mechanisms rather than unilateral actions.