Urgent mediation to save the Indus Waters Treaty could be a route to de-escalation between India and Pakistan

Tensions over water have contributed to the outbreak of hostilities, but potential mediation by the World Bank could provide an important chance for engagement.

Expert comment Published 7 May 2025 Updated 6 June 2025 4 minute READ

Leena Badri

Mo Ibrahim Foundation Academy Fellow, International Security Programme

India launched missile strikes on targets in Pakistan on 6 May, in what it says is retaliation for a militant attack in Kashmir that killed 26 civilians (Pakistan denies any involvement). The same day Indian Prime Minister Narendra Modi announced that he will also stop India’s water from flowing across international borders.

Modi’s statement did not mention Pakistan but comes after India said it will hold ‘in abeyance’ the 1960 Indus Water Treaty (IWT), a crucial water-sharing agreement with Pakistan that manages the control of the Indus River basin. 

Indian foreign secretary Vikram Misri has said New Delhi will not reverse its decision on the IWT until Islamabad ‘credibly’ ends alleged cross border militancy. Pakistan’s prime minister Shehbaz Sharif responded that any move to block or divert water ‘will be considered an act of war.’ 

The vital treaty was considered an exemplar of resource diplomacy, having survived three wars in one of the world’s most volatile regions. Its suspension can only fuel tensions between two nuclear-armed neighbours, already at the brink of war.

Immediate risks

As the downstream country, the implications for Pakistan are grave. The Indus basin supplies about 80 per cent of Pakistan’s irrigated agriculture, a sector worth roughly 25 per cent of GDP and employing 65 per cent of the labour force. Tens of millions of people rely on the rivers’ waters for their livelihoods and survival.

India does not currently have the ability to limit Pakistan’s access to water. This is because the IWT barred India from developing the necessary storage dams to control the river flows. 

However, with the treaty in abeyance, India could choose to ignore its restrictions on silt-flushing, releasing sediment from reservoirs that could cause significant damage downstream. According to Reuters, it has already begun the process.

In the long-term, India may now be motivated to build storage dams on the river.

Without the treaty, Pakistan is more dangerously exposed to floods and droughts. The IWT obliges India to share real time hydrological data. Between 2010 and 2020, reports indicate India provided more than 5,000 pages of vital data concerning flood and drought forecasts, and changes in river discharge and glacier melting.

The suspension also threatens Pakistan’s domestic cohesion. The Sindh province, run by the Pakistan People’s Party, already accuses upstream Punjab province, governed by the rival Pakistan Muslim League Nawaz, of taking more than its share. Any changes in water flow and access could exacerbate these tensions. 

The history of the Indus Waters Treaty

Brokered by the World Bank in 1960, the IWT split control of the basin’s rivers between India and Pakistan. India was given access to the eastern rivers of Ravi, Beas, and Sutlej and Pakistan access to the western Indus, Jhelum, and Chenab rivers.

The treaty created a three-step ladder to resolve disputes over water: a yearly meeting of the bilateral Permanent Indus Commission handles ‘questions’, a ‘Neutral Expert’ appointed by the World Bank handles ‘differences’, and the convening of a Court of Arbitration handles ‘disputes’. 

For decades, the ladder worked relatively successfully. 

The vital treaty was considered an exemplar of resource diplomacy, having survived three wars in one of the world’s most volatile regions.

However, in 2016 Pakistan sought arbitration via the court over fears that Indian hydropower projects would decrease downstream flows. India insisted on a Neutral Expert. The World Bank froze both tracks, urging bilateral talks instead. After continued stalemate, the Bank restarted both processes in parallel in 2022, but by then India was openly demanding the renegotiation of the treaty, which Pakistan refused. 

Both countries drew different lessons from the episode: Pakistan saw tacit approval of India’s projects, while India sensed it could leverage its upstream position. This likely contributed to undermining both parties’ belief in the treaty’s effectiveness, providing the groundwork for India’s suspension of the treaty today.

Mediation vacuum

The prospects of resuscitating the treaty are undermined by the lack of an active mediator. No countries have yet offered to lead mediation focused on the treaty, and there are no obvious candidates that have the required political capital and trust with both parties.

The US could potentially fill this role but appears unlikely to do so. The State Department responded to the cross-border strikes by calling for both sides to keep lines of communication open and avoid escalation. But President Donald Trump has so far expressed little interested in leading mediation efforts, claiming: ‘They’ll get it figured out one way or the other.’

The prospects of resuscitating the treaty are undermined by the lack of an active mediator.

Beijing has likewise called for restraint in the conflict, but is also an unsuitable choice due to its close links with Pakistan and vested interest in the region’s waters. China controls part of Kashmir, finances Pakistan’s Diamer Bhasha dam, and is building a vast hydropower project on the Yarlung Zangbo/Brahmaputra river, which flows into India and Bangladesh.

So far, the IWT’s signatory, the World Bank, has not indicated it will take any action in relation to the treaty suspension. But given the stakes and the lack of alternatives, the most suitable option would be for the Bank to urgently assume the role of a neutral mediator and reaffirm its commitment to salvaging the IWT. 

Potential for de-escalation?

The cross-border strikes have inevitably raised the stakes of the conflict. International attention may naturally focus on convincing both sides to avoid further escalation.

But mediation efforts should not ignore the suspension of the treaty, which Pakistan sees as an existential threat. If the flow of water is disrupted, Pakistan’s government may find itself pressured into military action. 

Allowing the treaty to break down without meaningful efforts to insulate it from the escalating crisis risks rolling back decades of confidence-building efforts that allowed the IWT to endure through previous conflicts. It would also fuel mutual distrust and make any return to cooperative water-sharing more unlikely. 

Saving the treaty would demonstrate that resource-sharing and confidence-building agreements are still viable, especially given the dangerous risk of further escalation in the region.

Progress on water-sharing will not resolve broader Indo-Pakistani tensions. But it could serve as a vital entry point for engagement in a dangerous context where there are few other opportunities for de-escalation. 

If the mediation focused solely on the water treaty initially, it could potentially begin even amid conflict between the two countries. The World Bank should spearhead this effort and call upon influential countries to support an urgent mediation channel. 

Future proofing the treaty

The mediation should aim to re-anchor the treaty in international law while encouraging both governments to resume crucial hydrological data sharing. 

This would also lay the groundwork for re-evaluating and re-negotiating the treaty for the future to better reflect both countries’ changed climate and development challenges, which are much changed since 1960.

Reforms to the treaty could include integrating more frequent periodic reviews, involving environmental and climate experts in monitoring, and developing neutral data exchange processes that allow Pakistan to receive information directly from India.  

Any renegotiation should pay special attention to how crucial hydrological data can be strengthened, especially on early warning information, as this has grave consequences for civilian livelihoods and the internal stability of both countries. 

Seen in a global context, the suspension of the IWT is a stark illustration of how once-resilient conflict prevention mechanisms are faltering under the weight of geopolitical tension and limited international engagement. 

Saving the treaty would demonstrate that resource-sharing and confidence-building agreements are still viable, especially given the dangerous risk of further escalation in the region.