India halts Indus Water Treaty, sparks economic fear in Pakistan

Time of India

25-04-2025

Following the deadly terrorist attack in Pahalgam,
Jammu & Kashmir
on April 22, which killed atleast 26, mostly tourists, the Indian government has suspended the
Indus Water Treaty
with
Pakistan
. The decision came after a Cabinet Committee meeting, chaired by Prime Minister Narendra Modi. The move by the Indian government has sparked economic fear in the neighbouring country as the river is intricately linked to Pakistan's food security, energy production, and overall economic stability.
On April 24, 2025, a letter was sent from the
Union Ministry of Water Resources
to Syed Ali Murtuza, Secretary in the Ministry of Water Resources of Pakistan that said: "The obligation to honour a treaty in good faith is fundamental to a treaty. However, what we have seen instead is sustained cross border terrorism by Pakistan targeting the Indian Union Territory of Jammu and Kashmir".
"Furthermore, apart from other breaches committed by it, Pakistan has refused to respond to India's request to enter into negotiations as envisaged under the Treaty and is thus in breach of the Treaty," the letter read.
Understanding the Indus water treaty
The World Bank administered the Indus water treaty, a water-sharing arrangement between India and Pakistan for the management of the Indus River system. It was signed on September 19, 1960, in Karachi by India's Prime Minister Jawaharlal Nehru and Pakistan's President Ayub Khan.
The treaty divides the six rivers of the Indus Basin between India and Pakistan. The eastern rivers – the Ravi, Beas, and Sutlej – are allocated to India for its unrestricted use. On the other hand, the western rivers – the Indus, Jhelum, and Chenab – are primarily allocated to Pakistan, although India retains limited rights for domestic and non-consumptive uses such as navigation and flood control, as well as for agriculture and hydropower generation, subject to specific restrictions outlined within the treaty.
This division results in a significant disparity in water sharing, with Pakistan receiving approximately 80 per cent of the total water from the Indus River system, while India's share amounts to roughly 20 per cent.
Infrastructure gap
To significantly reduce or stop the flow of the western rivers, India would require substantial infrastructure, particularly large storage dams which would require considerable time.
'Technically, we cannot say that water from the rivers will be stopped or controlled from today. There isn't any particular large dam ready on the western rivers at the moment that could directly regulate the waters. But what stops immediately are day-to-day information exchanges with our counterparts in Pakistan,' said an official from the Union Jal Shakti ministry.
From the western rivers, while regulated flow (3.6 MAF) can be reduced to some extent, the majority of water reaching Pakistan (131.4 MAF) flows naturally and remains beyond India's control. Full stoppage would require massive infrastructure investment by India.
Impact on Pakistan's economy
The Indus River, which provides the water lifeline for the vast majority of Pakistan's irrigated land and forms the core of its agricultural sector—a vital contributor to the country's GDP and a significant employer, particularly in rural areas—is linked with Pakistan's economy.
Crop yields would be significantly impacted by a decrease in the flow of these rivers, which might result in food shortages, higher import costs, and financial hardship for farming communities.
Apart from agriculture impact, the Indus Waters Treaty will affect power generation as Pakistan relies significantly on hydropower generated from the river. Dams like Tarbela and Mangla are key contributors to Pakistan's electricity supply. Any disruption to the water flow due to the treaty would have serious consequences.