India’s recent suspension of the Indus Waters Treaty (IWT), following a terrorist attack in Pahalgam in Kashmir, marks a critical moment in South Asian geopolitics. For decades, the IWT has served as a stabilizing mechanism, preventing broader escalations of tension between two water-scarce nuclear-armed nations.
Now, by holding the treaty in “abeyance,” India has dismantled what was seen as a key “puzzle piece in the peace” by introducing unprecedented uncertainty into an already volatile relationship between two hostile neighbors.
A recently declassified 1993 U.S. National Intelligence Estimate put the likelihood of war between India and Pakistan at one in five. In his book “Avoiding Armageddon,” Bruce Riedel wrote that U.S. intelligence officials privately assessed that the chances of an India-Pakistan war had risen to as high as 50-50 in the years following the 1999 Kargil conflict. Today’s scenario is a chilly reminder of the Kargil escalation. Following the April 22 terrorist attack in Kashmir’s tourist hotspot Pahalgam, where 26 civilians — mostly Hindu men — were killed, India blamed Pakistan-backed militants and swiftly took extensive harsh measures, including cancelling visas, closing the Attari-Wagah border crossing, and expelling Pakistani diplomats, in addition to suspending the IWT.
This immediate escalation is a manifestation of India’s domestic political consensus. At an all-party meeting in New Delhi, all major parties extended “full support to the government to take any action” in response to the attack at Pahalgam.
India’s diplomatic moves included reducing Pakistani diplomatic presence, declaring its military attachés persona non grata, and drastically downsizing Pakistan’s High Commission. At the same time, New Delhi also scaled back symbolic cultural engagements, notably by suspending Wagah-Attari border rituals. These measures, coupled with intensive security crackdowns in Kashmir, underscore India’s resolve to respond strongly.
However, the most alarming move remains the suspension of the Indus Waters Treaty. Brokered by the World Bank, the treaty divided control of six rivers between the two countries, ensuring predictable water flow critical to Pakistan’s agricultural and energy sectors. Although India retained certain limited rights under Article III for non-consumptive use, it avoided major diversions. While India cannot immediately sever water flows due to infrastructural and geographic limitations, it can legally reduce or delay flows, particularly in dry months. Such actions could severely disrupt Pakistan’s economy, agriculture, and electricity generation — factors that Islamabad has explicitly described as a “vital national interest.” This can also trigger considerable domestic unrest.
Pakistan’s response underscores just how dangerous this escalation has become. Prime Minister Shehbaz Sharif’s National Security Committee (NSC) mirrored and expanded India’s actions, suspending all bilateral agreements, notably the Simla Agreement of 1972, which underpins the Line of Control (LoC). Pakistani officials warned explicitly that interference with water flows would constitute an “Act of War,” and vowed a reciprocal response “across the complete spectrum of national power.” Pakistan’s closure of airspace to Indian airlines, cessation of trade, expulsion of Indian diplomats, and threats of tit-for-tat retaliatory actions, including targeting Indian citizens, demonstrate that if India intended this as calibrated brinkmanship, it has drastically narrowed diplomatic maneuvering space for both sides.
Game theory demonstrates precisely why this escalation risks catastrophic miscalculation. The current confrontation resembles a classic prisoner’s dilemma, where each side views escalatory retaliation as rational — even necessary — despite mutual harm. Domestic politics on both sides of the border further complicates the bleak situation: India’s decisive retaliation has strong approval at home, while Pakistan, already struggling with severe economic instability, IMF pressures, climate stress, and energy shortages, finds its leaders equally pressured to respond fiercely. Thus, both sides become increasingly locked into a cycle of escalation that undermines the logic of diplomacy.
Furthermore, this crisis has also raised humanitarian concerns. India’s decision to abruptly cancel visas created distress for thousands of ordinary Pakistani nationals living legally in India, exemplified by stories like Radha Bhil’s, who faces forced family separation due to sudden visa cancellations.
Pakistan has also cancelled visas in retaliation, affecting Indian nationals adversely. Interestingly, the Kartarpur Corridor — a religious and humanitarian crossing for Sikh pilgrims — remains open, indicating that avenues for cooperation still exist if both countries choose restraint.
Globally, the repercussions extend beyond South Asia. India’s economic and geopolitical rise has become central to U.S. strategies aimed at counterbalancing China, underscored by companies like Apple relocating production to India. During his recent visit, U.S. Vice President JD Vance called India “a partner for the 21st century,” reaffirming its strategic value to Washington. Regional instability threatens this realignment. A conflict between nuclear-armed neighbors risks destabilizing investor confidence, fracturing global supply chains, and undermining broader strategic alliances at precisely a moment when the world economy is fragmenting into rival blocs — U.S.-led capitalism, China’s state-driven economy, and Europe’s new green-industrial approach.
India’s suspension of treaty obligations also creates risky precedents. As a downstream riparian state dependent on rivers flowing from China, including the Brahmaputra, India historically upheld treaties partly as insurance against upstream reprisals. China’s proposed $137 billion Medog mega-dam on the Brahmaputra, without consultation with downstream states, has raised serious ecological and geopolitical concerns for both India and Bangladesh. Departing from these norms now weakens India’s credibility as a rule-based actor, affecting its leverage in critical multilateral forums such as the Quad, BRICS, and global climate negotiations.
Understanding the gravity of the situation, foreign powers should not brush aside the idea of international mediation. The United States, with its strategic relationships in the region, and the World Bank — though currently taking a non-committal stance — should push for a renewed dialogue under treaty-based frameworks. The United Nations has already appealed to both nations to exercise “maximum restraint,” highlighting the need to prevent further deterioration.
While Pakistan must meaningfully address India’s security concerns through transparent, verifiable actions against cross-border terrorism, India should recommit clearly to its treaty obligations and seek resolution within the treaty’s established legal frameworks, avoiding unilateral moves. Amid rising tensions, a balanced compromise is essential. This would help ease tensions while safeguarding both countries’ core interests and preventing a dangerous precedent in an already volatile region.
Finally, both countries must reframe water-sharing not as a geopolitical weapon but as a shared vulnerability — especially in a region increasingly impacted by climate change. Irrespective of politics, water scarcity, food insecurity, and energy shortages continue to haunt both nations. Addressing each other’s core concerns and acknowledgement of mutual dependence could mark a paradigm shift, where both states shift from confrontation to cautious cooperation, which is ever essential for regional stability.
Sixty-five years ago, the Indus Waters Treaty symbolized rare pragmatism between bitter adversaries. Its unraveling now poses dangers far beyond bilateral relations — it threatens the stability of the global order, already under severe strain. Today, more than ever, both India and Pakistan must recognize that their waters — and the diplomacy sustaining them — are not merely national assets, but vital pillars of international security. South Asia’s nuclearized peace has long rested on fragile trust, safeguarded by agreements like the Indus Treaty. That fragile trust must urgently be restored before it’s irretrievably lost.