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India raised objection when Pakistan initiated arbitration at the Permanent Court of Arbitration to address the interpretation and application of the IWT.
On July 6, 2023, the court unanimously passed a decision (which is binding on both parties without appeal) rejecting each of India’s objections.

Central Idea

The Indus Waters Treaty (IWT), 1960 has long been hailed as a remarkable example of cooperation between India and Pakistan, despite their tumultuous relationship. The treaty has endured numerous conflicts and established detailed procedures for dispute resolution. However, in recent years, there has been an increase in the utilization of judicial recourse to settle disputes arising from India’s construction of run-of-river hydroelectric projects.

The Indus Waters Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
According to this agreement, control over the water flowing in three eastern rivers of India the Beas, the Ravi and the Sutlej was given to India.
The control over the water flowing in three western rivers of India the Indus, the Chenab and the Jhelum was given to Pakistan

Back in time, partitioning the Indus rivers system was inevitable after the Partition of India in 1947.
The sharing formula devised after prolonged negotiations sliced the Indus system into two halves.
Underlying the treaty is the principle that water does not recognise international boundaries and upper riparian’s have a responsibility to lower riparian’s.

Construction and design of run-of-river hydroelectric projects by India- Kishanganga (a tributary of the Jhelum) and Ratle, a hydro-electric project on the Chenab- objections from Pakistan– potentially impact the flow and utilization of water downstream.
Pakistan initiated arbitration at Permanent Court of Arbitration- India objected to the jurisdiction of the court– advocating for the use of the neutral expert process instead.
Pervasive atmosphere of distrust and strained relations between India and Pakistan, which hampers effective cooperation under the treaty.
As precipitation patterns and runoff are altered, the assumption of fixed water availability under the IWT becomes increasingly uncertain.
The treaty’s allocation of water resources does not adequately consider the potential impact of climate change on future water availability, creating a need for flexible mechanisms.
The IWT does not sufficiently address the rapidly growing industrial and agricultural needs of both countries.

Equitable and Reasonable Utilization (ERU): This principle emphasizes the fair and reasonable use of water resources among riparian states.
No Harm or Do No Harm Rule (NHR): The no harm principle states that riparian states should not cause significant harm to other states sharing the same watercourse. It requires taking necessary measures to prevent or mitigate any adverse impacts that might arise from water-related activities.
Integrated Water Resources Management (IWRM): IWRM approach considers water resources as an interconnected system, taking into account social, economic, and environmental factors. Achieve optimal and sustainable use of water resources.

Basin-wide Management: Water resources should be managed at the basin or watershed level, as it is the most natural unit for water management.
Prior Informed Consent: Obtaining the consent of affected communities and stakeholders before implementing projects or activities that may have significant impacts on water resources.
Environmental Protection: Need to protect and conserve the ecological integrity of watercourses. Preservation of aquatic ecosystems, biodiversity, and water quality.
The Role of the World Bank: The World Bank, as a party to the treaty, could utilize its platform to foster a transnational alliance of epistemic communities.

By incorporating principles of equitable water utilization and preventing significant harm, the IWT can better address the evolving needs and climate change impacts of India and Pakistan. The World Bank’s involvement in facilitating collaboration and policy convergence could play a pivotal role in shaping a revised treaty that fosters long-term cooperation and sustainability in the shared management of the Indus waters