India-Pakistan water ties underwent a dramatic change when the Indus Waters Treaty was suspended recently by India following the Pahalgam incident. The hydroelectric projects started by the Modi government in occupied Jammu and Kashmir, India's water policy before and after the Pahalgam attack, and the possible consequences for both countries are investigated in this extensive paper.
With much of its hydroelectric potential developed under Prime Minister Narendra Modi's direction, occupied Jammu & Kashmir has great potential. Of the estimated 18, 000 megawatts (MW) of hydropower potential in the area, 14, 867 MW have been found spread over three main river basins: 500 MW in the Ravi basin, 11, 283 MW in the Chenab basin, and 3, 084 MW in the Jhelum basin. Only 3, 540.15 MW (23.81% of the total identified potential) have been used thus far, despite great promise. This capacity comprises 2, 250 MW in the central sector under the National Hydroelectric Power Corporation (NHPC), 1, 197.4 MW in the UT sector under the Occupied Jammu and Kashmir State Power Development Corporation (JKSPDC), and 92.75 MW via Independent Power Producers.
During Modi's term, several major hydroelectric projects have started or sped up. Prime Minister Modi opened the 330 MW Kishanganga Hydroelectric Project on May 19, 2018, a run-of-the-river project whereby water from the Kishanganga River is diverted to a power plant in the Jhelum River basin. Under development and anticipated to be commissioned by May 2026 is the Ratle Hydroelectric Project (850 MW), for which Modi laid the foundation stone on April 24, 2022. In April 2022, Modi also laid the foundation stone for the 540 MW Kwar Hydroelectric Project. Later approval of this project, which Chenab Valley Power Projects LTD. (CVPPL) will undertake, came from the Cabinet Committee on Economic Affairs.
Other significant projects are the Kiru Project (624 MW), a part of India's approach to using western rivers for power generation, and Pakal Dul (1, 000 MW), situated on the Marusudar River, a tributary of the Chenab. Targeting a greatly increased power-generating capacity, the Sawalkot Project (1, 856 MW) is among the most ambitious projects on the Chenab River. Three projects with a total installed capacity of 2, 354 MW (Uri-II 240 MW, Dulhasti-II 258 MW, and Sawalkote 1, 856 MW) were assigned to NHPC for development on a Build, Own, Operate, and Transfer (BOOT) basis under an MoU signed on January 1, 2021, between the government of Occupied Jammu and Kashmir and NHPC.
Before the Pahalgam attack, India had already been accelerating its hydropower development in the region. In 2017, India fast-tracked hydropower projects worth $15 billion in Kashmir, despite Pakistan's concerns that these projects would disrupt water supplies.
India's position on the Indus Waters Treaty (IWT) had been tightening even before the most recent occurrences. Prime Minister Modi said, "blood and water can't flow together", following the 2016 Uri incident, suggesting a possible change in India's attitude on the treaty. India sanctioned eight hydroelectric projects in Ladakh following the 2019 Pulwama incident, therefore indicating its intention to optimize the use of its portion of water. India had issued two notices requesting changes to the pact, first on January 25, 2023, and then once more on August 30, 2024, implying that it had been thinking about either changing or withdrawing the treaty within the framework of international law.
India had voiced reservations over the World Bank's decision to consider concurrent procedures, claiming that the appointment of a Neutral Expert on India's demand and a Court of Arbitration on Pakistan's demand breached the tiered approach to dispute resolution of the treaty.
In Pahalgam, occupied Jammu and Kashmir, a terror attack claimed 26 lives on April 20, 2025 mostly of tourists. India responded to the attack by suspending the Indus Waters Treaty, among several diplomatic actions directed against Pakistan. India formally informed Pakistan on April 24, 2025, using Article XII(3) of the treaty. Arguing that the fundamental presumptions of the IWT had changed dramatically, India invoked the principle of rebus sic stantibus under Article 62 of the Vienna Convention on the Law of Treaties.
For Pakistan, the Indus Waters Treaty's suspension presents several serious difficulties. With almost 80% of Pakistan's irrigated land dependent on the Indus basin, its agriculture is fundamentally dependent on these waters. Given Pakistan's mostly agricultural economy, any disturbance could be disastrous since almost 93% of the water from the Indus River System is used for irrigation and power generation.
Pakistan has deemed India's suspension of the treaty an "act of war" and has threatened to withdraw from all bilateral agreements, including the 1972 Simla Agreement. Former Pakistan foreign minister Bilawal Bhutto-Zardari offered a stern warning: "Either our water will flow through it, or their blood will", emphasizing the severity with which Pakistan views this situation. If water supplies are disturbed during important crop cycles, Pakistan may experience a serious agricultural catastrophe and perhaps food insecurity.
India gains strategically from the Indus Waters Treaty's suspension several times over. The treaty's restrictions no longer apply to India, allowing it to design dam projects without them. Now India may desilt and replenish lakes like Kishanganga outside the monsoon season, possibly during Pakistan's sowing season, therefore influencing its irrigation. India is no longer under an obligation to take Pakistan's objections over long-delayed, long-standing projects such as Pakal Dul, Kiru, and Lower Kalai under consideration.
India can stop providing vital flood data, which Pakistan depends on mostly to be ready for monsoon-related events. Particularly in occupied Jammu and Kashmir, India can take more general flood control measures and boost water storage on western rivers. India might stop the required inspection visits for Pakistani teams mandated under the pact. Previously voiced objections by Pakistan to Indian hydroelectric projects could now be ignored.
India's decision to suspend the Indus Waters Treaty seems to have been shaped by several elements. India said the main reason for the suspension was Pakistan's claimed backing of cross-border terrorism, especially given the Pahalgam attack. India's Ministry of Jal Shakti specifically said in their letter to Pakistan that "the need to honor a pact in good faith is fundamental to a treaty. However, what we have witnessed instead is continued cross-border terrorism by Pakistan against the Indian Union Territory of Jammu and Kashmir".
India has underlined its expanding energy demands and shifting demographics as factors for a revision of the deal. The building of hydropower projects is part of India's aim to make Jammu and Kashmir into an energy surplus region, with Kishtwar district emerging as a key power hub.
India had been preparing the framework for treaty amendments through formal notices in 2023 and 2024, indicating a planned approach rather than a purely reactive one. India has sought to create a legal foundation for its activities under international law by referencing the rebus sic stantibus principle.
With far-reaching consequences for both India-Pakistan relations, the suspension of the Indus Waters Treaty marks a marked turnabout in those ties. India offers more freedom in developing projects in the seized Jammu and Kashmir and might thus improve its strategic posture. For Pakistan, it seriously jeopardizes water security, agricultural output, and economic stability, as well as other aspects.
The matter is still in flux since both nations indicate their readiness to protect their interests. Given the significance of the Indus basin for regional stability and the possibility of escalation in an already strained relationship between two nuclear powers, the international community will probably closely track events.
With major consequences for peace and security in South Asia, the management of shared river systems like the Indus basin will remain a crucial factor in India-Pakistan relations as water resources become ever more limited and important.
