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Why India wants to modify Indus Waters Treaty with Pakistan

India & Pakistan have locked horns over Kishanganga & Ratle hydroelectric projects, primarily over process of dispute resolution under Indus Waters Treaty and World Bank's role.

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New Delhi: India is seeking modifications to the Indus Waters Treaty (IWT) — a water-sharing agreement between India and Pakistan brokered by the World Bank in 1960 — likely to address issues over the document’s dispute settlement mechanism.

Since 2015, Pakistan has repeatedly raised objections to India’s Kishanganga and Ratle hydroelectric projects located in Jammu and Kashmir. While Islamabad has made repeated calls for a Court of Arbitration to resolve the matter, New Delhi has insisted that adjudication by a neutral expert is the best way forward.

India has now accused Pakistan of violating the “graded mechanism” of dispute settlement envisaged under Article IX of the Indus Waters Treaty, essentially opposing Islamabad’s direct request for a Court of Arbitration to look into the dispute first instead of a neutral expert.

On 25 January, New Delhi issued a notice to Islamabad for amending the treaty following “Pakistani intransigence” on its implementation, said government sources.

Last April, the World Bank, which is an independent party to the treaty, announced its decision to resume the two separate processes requested by India and Pakistan.

However, India has opposed the parallel processes approach.

Nonetheless, the two processes appear to be in motion. While the World Bank appointed Michel Lino as the neutral expert in October 2022, hearings in the Court of Arbitration at The Hague reportedly began Friday and will continue till 28 January.

A former ambassador to Pakistan, who did not wish to be named, remarked that the treaty’s dispute settlement process has proven to be “ambiguous”.

Also Read: Vajpayee to Modi, why India-Pakistan secret peace dialogues on Kashmir have always failed

Why India wants to modify IWT

In its notice to Islamabad earlier this month, India also accused Pakistan of refusing to discuss the issue during Permanent Indus Commission meetings held between 2017 and 2022.

Sources say New Delhi put Islamabad on notice to get the ball rolling on intergovernmental negotiations on the issue, adding, “This process would also update IWT to incorporate the lessons learned over the last 62 years.”

However, it is not clear exactly what modification India is seeking in the treaty.

ThePrint reached A.K. Pal, Commissioner (Indus), via call and email for clarification but did not receive a response by the time of publication. This report will be updated when a response is received.

Speaking to ThePrint, environmental activist and water expert Himanshu Thakkar said, “If I had to guess, India is probably seeking to modify Article IX, Annexure F or G which all have to do with the process of dispute resolution. Perhaps they want to include a clause to ensure a graded response in which for every difference/dispute first a neutral expert and then only the court of arbitration is resorted to.”

He, however, added that this might be easier said than done since any modification would require Pakistan’s assent and Islamabad is unlikely to agree to any modifications.

“I wouldn’t be surprised if they are also seeking to clarify the role of the World Bank in dispute resolution. As it is, there was inaction from the World Bank from 2017-2022 on how to resolve the Kishanganga and Ratle project disputes,” said Thakkar.

In December 2016, the World Bank paused the process of either appointing a court of arbitration or a neutral expert to arbitrate disputes regarding the Kishanganga and Ratle projects.

Kishanganga & Ratle projects

The IWT says the waters of the eastern rivers — Sutlej, Beas and Ravi — belong to India and the western rivers — Indus, Chenab and Jhelum — to Pakistan, barring certain non-consumptive uses.

The Kishanganga hydroelectric project, inaugurated in 2018, includes a dam on the tributary of the Jhelum. Pakistan has argued that the dam changes the course of the river and will deplete water levels.

In May 2010, Pakistan raised the matter with the Permanent Court of Arbitration at The Hague. In 2013, the court ruled that India can go ahead with the construction of the dam, so long as it maintains a minimum flow of 9 cubic metres per second (Cumecs), which was more than the Indian government’s proposal of 4.25 cumecs.

Some advocacy groups called the verdict a “clear setback” for India.

Pakistan, while insisting that it still had technical concerns about the design of the project and instead of seeking a neutral expert, wanted another court of arbitration to look into the matter.

In August 2016, Pakistan asked the World Bank to appoint a court of arbitration to review the designs of Kishanganga and Ratle — another project on the Chenab, currently under construction in J&K’s Kishtwar district.

Feisal Naqvi, an advocate who provided counsel to the Pakistani government in relation to the Kishanganga dispute, had criticised Pakistan’s decision not to seek the role of a neutral expert.

In a 2018 op-ed for Dawn, he wrote, “After winning its legal case in 2013, Pakistan should have referred the technical aspects of the Kishanganga dispute to a Neutral Expert. Indeed, that had been the plan. However, Pakistan made an ill-advised u-turn and sought to take all remaining questions to a different court of arbitration.”

He added, “As a consequence, no progress has been made for the past five years. Pakistan is today in the same position as it was in December 2013. Meanwhile, India has completed the Kishanganga project.”

Neutral expert vs courts of arbitration

Article IX of the IWT makes a distinction between “differences” and “disputes”. 

It states that if the Permanent Indus Commission, a bilateral commission consisting of officials from India and Pakistan, cannot come to an agreement on an issue, then it is deemed a “difference”.

If this difference falls under provisions of Part 1 of Annexure F1, a neutral expert is allowed to intervene. 

There are 23 provisions under Part 1 of Annexure F1 that deal with a variety of issues ranging from questions about the boundary of the drainage basins to any new hydroelectric plants on irrigation channels in the western rivers.

If a difference does not fall under these provisions or if a neutral expert feels it does not fall under these provisions, it is deemed a “dispute”.

In this scenario, the two countries may enter into formal negotiations and even seek mediators. If either approach is unsuccessful, a court of arbitration can be sought to resolve the dispute. But no such court shall be sought while the matter is being dealt with by a neutral expert.

It should be noted that the last time India and Pakistan consulted a neutral expert was in 2007 when disagreements arose over India’s Baglihar dam project. World Bank-appointed expert and Swiss civil engineer, Professor Raymond Lafitte, gave a green light to India’s overall design for the dam, which was seen as a win for New Delhi.

(This report has been updated with additional inputs)

(Edited by Amrtansh Arora)

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