How Indus Water Treaty Suspension Will Impact Pakistan?

The Indus Waters Treaty (IWT) is the water-sharing agreement signed on September 19, 1960, brokered by the World Bank between India and Pakistan. The treaty covered six rivers of the Indus Basin including three western rivers Indus, Jhelum, and Chenab which largely go to Pakistan, and three eastern rivers such as Ravi, Beas, and Sutlej going to India.

The treaty has survived four wars between India and Pakistan making it one of the world’s most durable trans-border water accords. The treaty provides Pakistan with nearly 80% of its surface water and gives India vital hydropower and irrigation rights. Pakistan’s water storage capacity is only 30 days worth of its need.

However, cross-border terrorism has become a major roadblock in treaty participation as India has announced the suspension of participation in treaty mechanisms. The April 22, 2025, deadly terrorist attack in Pahalgam, Kashmir which caused at least 26 dead, has led to the immediate suspension of the Indus-Water Treaty. The Cabinet Committee on Security (CCS) meeting led by PM Narendra Modi decided to halt IWT.

The World Bank brokered treaty has set up a Permanent Indus Commission (PIC), a bilateral body to oversee and manage the implementation of IWT. PIC manages the water sharing of six Himalayan rivers between India and Pakistan. Commissioners of both countries are mandated to meet every year, to discuss and resolve differences on the sharing of river water and data sharing concerning the ecological aspects of the rivers. Notably, the last official meeting of PIC was held in Islamabad, Pakistan in March 2022.

Read also: Fawad Khan’s ‘Abir Gulaal’ Faces Boycott Calls After Pahalgam Attack

Impact on the Indus Waters Treaty Suspension On Pakistan

The Indus Waters Treaty suspension makes India no longer legally bound to guarantee the 80% share of Indus-basin flows that irrigate Pakistan’s bread basket mainly in Punjab and Sindh Province. Cuts in water during the sowing season in April-June Kharif could slash wheat, rice, and cotton output which could increase the food import bills and impact rural employment. Agriculture drives 22% of Pakistan’s GDP and 37% of jobs.

Water-intensive sectors account for nearly 25% of Pakistan’s GDP. The treaty suspension could reduce GDP by 1.5-2% annually with a food and energy price risk of over 20% creating widespread economic distress.

Urban systems in Lahore, Multan, Hyderabad, Karachi, and Faisalabad mainly depend on the Indus-system canals. The suspension can cause over 40 million urban residents to face water scarcity, especially during the dry months. Moreover, the emergency supply costs of tankers and desalinization could reach hundreds of millions annually.

Furthermore, nearly 30% of Pakistan’s electricity comes from the hydropower generated from the Tarbela, Mangal, and Neelum-Jhelum dams built on the western river system. This can cause around $1.5-2 bn/year load shedding and energy import costs, which can cause industrial slowdown.

Pakistan also lost an enforceable bilateral mechanism that has survived four wars.