Indus Waters Treaty, Neutral Expert’s Decision and Its Implications

Context: The recent decision by the Neutral Expert appointed by the World Bank under the Indus Waters Treaty (IWT) has significant implications for the ongoing water-sharing disputes between India and Pakistan.

• India has escalated its demands to renegotiate the Indus Waters Treaty (IWT), originally signed in 1960, by issuing its fourth notice to Pakistan in January 2023.
• This latest move involves halting all Permanent Indus Commission (PIC) meetings until Pakistan agrees to engage in discussions.

Historical Context of the Indus Waters Treaty

• The IWT was signed on September 19, 1960, after nine years of negotiations facilitated by the World Bank.
  • It allocates water from the Indus River and its tributaries, giving Pakistan control over approximately 70% of the water while India retains about 30%.
• The treaty was previously regarded as a successful model for international water-sharing agreements, with India winning disputes regarding projects like the Baglihar Dam (2007) and addressing concerns over Pakistan’s Neelum project (2013).

Water Distribution Under the IWT

• India has “unrestricted use” of three Eastern Rivers: Beas, Ravi, and Sutlej.
• Pakistan controls three Western Rivers: the Indus, Chenab, and Jhelum.
• This distribution grants India only around 20% of the total water flow from the Indus River System, with the remaining 80% going to Pakistan.
  • Article III (1) mandates that India must allow the flow of Western River waters to Pakistan.

Recent Developments and Dispute of Indus Waters Treaty

Three-stage dispute resolution mechanism under Indus Water Treaty (1960)

• Permanent Indus Commission (PIC): The first level of dispute resolution, where either party informs the other of their plans for the Indus River.
• Neutral Expert: The World Bank appoints a neutral expert to resolve any differences.
• Court of Arbitration: If either party is not satisfied with the neutral expert’s decision, or if there is a dispute over the treaty’s interpretation, the matter goes to a Court of Arbitration.
  • The World Bank appoints the chair of the Court of Arbitration.

Neutral Expert’s Decision

• The Neutral Expert validated India’s position that the seven questions referred to him fall under his jurisdiction per Paragraph 7 of Annexure F of the treaty.
• This aligns with India’s consistent claim that only the Neutral Expert has the competence to decide these issues.
• The decision marks the beginning of the merits phase, which will evaluate the specific technical differences and lead to a final decision

Hydroelectric projects objected by Pakistan

• Kishanganga HE Project (330 MW):
  • It is a run-of-the-river project in Bandipora (Jammu and Kashmir).
  • River Kishanganga is a tributary of Jhelum.
  • It requires diverting water from the Kishanganga River through the tunnel to a power plant.
• Rattle HE Project (880 MW):
  • It is also a run-of-river hydroelectric power project in Kishtwar District of Jammu and Kashmir.
  • It is constructed on the Chenab River.

Ongoing Disputes

• Hydroelectric Projects: The dispute centres on two hydroelectric projects in Jammu and Kashmir:
  • Kishenganga Hydroelectric Project (HEP) on the Kishenganga River (a tributary of Jhelum).
  • Ratle HEP on the Chenab River.
• Pakistan’s Objections: Pakistan objects to these projects’ design features, claiming they violate the IWT.
  • Despite being “run-of-the-river” projects that do not obstruct river flow significantly, Pakistan argues that they could affect water availability.
• Neutral Expert Appointment: In 2015, Pakistan requested a Neutral Expert to address its technical objections but later retracted this request in favor of adjudication by the Permanent Court of Arbitration (PCA).
  • India insisted on referring the matter to a Neutral Expert instead.

India’s Latest Notice

• In a formal notice issued on August 30, 2024, India cited “fundamental and unforeseen changes” necessitating a reassessment of treaty obligations under Article XII(3).
  • This article allows for modifications through mutual agreement.

Key concerns include

• Changing population demographics.
• Environmental issues exacerbated by climate change.
• The need for clean energy development to meet emission targets.
• Ongoing cross-border terrorism impacting national security.

Political Dynamics

• The current political climate between India and Pakistan is marked by increased tensions, with leaders using more aggressive rhetoric than in previous decades.
• Prime Minister Modi’s statement post-2016 Uri attack that “blood and water cannot flow together” exemplifies this shift.

Impact on Bilateral Relations

• There is a notable lack of political engagement or trade between the two nations, with the 2021 Line of Control (LoC) ceasefire agreement now at risk due to rising terror attacks.
• The potential for reopening treaty discussions exists, particularly in light of Pakistan’s invitation to attend the SCO Heads of Government meeting on October 15-16, which could serve as a platform for dialogue.

Need for Treaty Revisions

Experts argue that the IWT requires updates to address modern challenges:

• Climate change impacts necessitate new frameworks for water management.
• The treaty’s provisions do not account for modern hydropower technologies that enhance efficiency.
• Enhancements are needed to resolve disputes effectively between states within each country.

Implications for Future Relations

• Ongoing Tensions: The relationship between India and Pakistan remains strained, with minimal diplomatic engagement.
  • The Neutral Expert’s decision may provide a framework for resolving technical disputes while avoiding escalation to arbitration.
• India’s Notice for Modification: In January 2023, India issued a notice to Pakistan seeking “modification” of the IWT due to Islamabad’s repeated objections.
  • This marked a significant development as it was the first notice of its kind in over six decades.
  • India’s intent to review and potentially renegotiate aspects of the treaty reflects changing demographics, environmental concerns, and developmental needs.
• Future Considerations: Experts suggest that India’s notification highlights “fundamental and unforeseen changes” necessitating a revisit of treaty terms. These include population growth, environmental issues, and cross-border terrorism impacts.

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