Neutral Expert’s Decision on Indus Waters Treaty: A Win for India

The recent decision by the Neutral Expert, appointed by the World Bank under the terms of the Indus Waters Treaty (IWT), marks a significant diplomatic win for India. The Expert deemed himself “competent” to adjudicate the technical differences raised between India and Pakistan regarding the design of two hydroelectric projects in Jammu and Kashmir. This outcome vindicates India’s long-standing position and opens a new chapter in the resolution of disputes under the IWT framework.

What is the Indus Waters Treaty (IWT)?

The Indus Waters Treaty, signed on September 19, 1960, is a water-sharing agreement between India and Pakistan, brokered by the World Bank. It is regarded as one of the most successful examples of conflict resolution between the two nations.

Key Features of the Treaty:

Distribution of Rivers:

• Eastern Rivers (Beas, Ravi, Sutlej): Allocated to India for unrestricted use.
• Western Rivers (Indus, Chenab, Jhelum): Reserved for Pakistan, with limited use for India, such as for irrigation, navigation, and hydroelectric projects.

Water Allocation:

• India controls about 30% of the total Indus river system water.
• Pakistan controls the remaining 70%.

Obligation on India:

According to Article III (1) of the Treaty, India must allow the waters of the Western Rivers to flow unrestricted to Pakistan, except for specific uses permitted under the Treaty.

The Ongoing Dispute: Pakistan’s Objections

The dispute centers around the design features of two Indian hydroelectric projects in Jammu and Kashmir:

• Kishenganga Hydroelectric Project (HEP) on the Kishenganga River, a tributary of the Jhelum.
• Ratle Hydroelectric Project (HEP) on the Chenab River.

Pakistan’s Allegations:

• Pakistan claims that these projects, though classified as run-of-the-river projects (which do not obstruct the natural flow of the river), violate the IWT.
• It alleges that the designs allow India to manipulate water flow, potentially impacting downstream availability for Pakistan.

India’s Stance:

India maintains that both projects fully comply with the Treaty’s technical specifications. The run-of-the-river design ensures that the natural flow of water remains unimpeded, with only limited storage permitted under the Treaty.

Pakistan’s Legal Maneuvers and the Appointment of Neutral Expert

In 2015, Pakistan initially requested the appointment of a Neutral Expert to resolve its objections. However, in 2016, Pakistan unilaterally withdrew this request and instead sought adjudication by the Permanent Court of Arbitration (PCA) in The Hague.

India’s Response:

• India filed a separate request to refer the matter back to a Neutral Expert, arguing that PCA involvement was not consistent with the Treaty.
• Under Article IX of the Treaty, disputes must first be addressed by:
  1. Indus Commissioners of both nations.
  2. Neutral Expert, if unresolved.
  3. PCA, as the last resort.

Despite India’s objections, the World Bank in October 2022 initiated two parallel processes:

1. Appointed Michel Lino as the Neutral Expert.
2. Commenced PCA proceedings, which India chose to boycott, calling it a violation of the Treaty.

Significance of the Neutral Expert’s Decision

The Neutral Expert held that the differences raised by India regarding the two projects fall squarely within his jurisdiction under the Treaty. This outcome is a diplomatic victory for India, as it reinforces the validity of the Treaty-prescribed dispute resolution mechanism.

Key Observations:

1. Pakistan argued that the “Points of Difference” do not fall within the Neutral Expert’s remit, seeking to limit his jurisdiction.
2. India successfully argued that the issues are entirely within the Neutral Expert’s purview under Part I of Annexure F of the Treaty.
3. The Expert’s decision, issued on January 7, 2025, allows the process to move forward for adjudication on the merits of the differences.

Challenges in the Implementation of the IWT

Over the years, the IWT has faced challenges due to Pakistan’s repeated objections to Indian projects and its reluctance to engage in fair adjudication. These issues have prompted India to call for a review and modification of the Treaty.

Key Developments:

1. January 2023: India issued its first notice to Pakistan for modification of the Treaty, citing Pakistan’s continued obstructionism.
2. September 2024: India issued a second notice, signaling its intent to revoke and renegotiate the Treaty.

Future of the Indus Waters Treaty

The 65-year-old Treaty is now under scrutiny, with India citing “fundamental and unforeseen changes in circumstances” as reasons for renegotiation. These include:

• Demographic changes and increased water demand.
• Environmental concerns and the need to develop clean energy.
• The impact of cross-border terrorism on bilateral trust.

Under Article XII (3) of the Treaty, provisions may be modified through a duly ratified agreement between the two governments.

Summary of the News

Category	Details
Why in News?	The Neutral Expert appointed by the World Bank has deemed himself competent to adjudicate on the differences between India and Pakistan regarding the design of two hydroelectric projects in Jammu and Kashmir, marking a diplomatic win for India.
Indus Waters Treaty (IWT)	A water-sharing agreement between India and Pakistan signed on September 19, 1960, with the World Bank as a mediator.
Key Features of the Treaty	– Distribution of Rivers: Eastern Rivers (Beas, Ravi, Sutlej) for India; Western Rivers (Indus, Chenab, Jhelum) for Pakistan. – Water Allocation: India controls 30%, and Pakistan controls 70% of the total Indus river system water. – Obligation on India: India must allow unrestricted flow of Western Rivers to Pakistan, with limited usage for specific purposes.
Ongoing Dispute	Disagreement over the design features of two hydroelectric projects in Jammu and Kashmir: – Kishenganga HEP (on the Kishenganga River, Jhelum tributary) – Ratle HEP (on the Chenab River).
Pakistan’s Allegations	Claims that the hydroelectric projects violate the IWT, alleging manipulation of water flow, which could impact downstream water availability for Pakistan.
India’s Stance	India argues that the projects comply with the IWT’s technical specifications, ensuring natural water flow is maintained.
Pakistan’s Legal Maneuvers	– 2015: Pakistan initially requested a Neutral Expert, but withdrew in 2016 and sought PCA adjudication. – India’s Response: India requested the matter be referred back to the Neutral Expert, following the IWT’s dispute resolution process.
Neutral Expert’s Appointment	In October 2022, the World Bank appointed Michel Lino as the Neutral Expert and initiated PCA proceedings, which India boycotted.
Significance of the Neutral Expert’s Decision	– The Neutral Expert ruled that the differences regarding the two projects fall within his jurisdiction. – This validates India’s position and reinforces the IWT’s dispute resolution framework.
Challenges in IWT Implementation	India has faced continued objections from Pakistan regarding its hydroelectric projects, prompting calls for review and modification of the IWT.
Key Developments	– January 2023: India issued a notice to Pakistan for modification of the Treaty. – September 2024: India issued a second notice signaling intent to revoke and renegotiate the Treaty.
Future of the IWT	– India cites demographic changes, increased water demand, environmental concerns, and cross-border terrorism as reasons for renegotiating the Treaty. – Modifications are possible under Article XII (3) of the Treaty.