India suspends Indus Waters Treaty: Here's how it impacts Pakistan’s farms, cities, and power - India suspends Indus Waters Treaty: Here's how it impacts Pakistan’s farms, cities, and power BusinessToday (2025)

In its boldest response yet to cross-border terrorism, India has suspended the Indus Waters Treaty (IWT) with Pakistan, ending a 64-year-old water-sharing agreement that survived wars, crises, and decades of hostile diplomacy.

The move follows the April 22 terror attack in Pahalgam, which killed 26 people, including one foreign national. The decision was cleared by the Cabinet Committee on Security (CCS)—the country’s apex body on national security—after investigators uncovered “cross-border linkages” to the attack.

A treaty that lasted through wars...

The Indus Waters Treaty, signed in 1960 and brokered by the World Bank, is one of the world’s most durable international water-sharing frameworks. It governs the use of six rivers in the Indus Basin:

-- Eastern rivers: Ravi, Beas, Sutlej (allocated to India)

-- Western rivers: Indus, Jhelum, Chenab (allocated to Pakistan)

Under the treaty, India received rights over 20% of the system’s water—roughly 33 million acre-feet (MAF) or 41 billion cubic metres (bcm) annually—while Pakistan received 80%, about 135 MAF or 99 bcm. India is allowed limited use of western rivers for non-consumptive purposes like hydropower, but cannot block or significantly alter flows.

Why the suspension is devastating for Pakistan

-- For Pakistan, the Indus system is not just vital—it is existential.

-- 80% of Pakistan’s cultivated land—about 16 million hectares—relies on water from the Indus system.

-- 93% of this water is used for irrigation, powering the country’s agricultural backbone.

-- The system supports over 237 million people, with Pakistan accounting for 61% of the Indus Basin population.

-- Major urban centres—Karachi, Lahore, Multan—draw their water directly from these rivers.

-- Hydropower plants like Tarbela and Mangla also depend on uninterrupted flows.

The system contributes nearly 25% of Pakistan’s GDP and supports crops like wheat, rice, sugarcane, and cotton.Pakistan is already one of the most water-stressed countries in the world, and per capita availability is declining rapidly. If India cuts off or significantly reduces flows from the Indus, Jhelum, and Chenab, the impact will be immediate and severe:

-- Food production could collapse, threatening food security for millions.

-- Urban water supplies would dry up, causing unrest in cities.

-- Power generation would stall, crippling industries and homes.

-- Loan defaults, unemployment, and migration could spike in rural regions.

India’s decision marks a major shift in its approach to Pakistan. While New Delhi has earlier threatened to "revisit" the IWT after previous attacks, this is the first time the treaty has been formally suspended. The timing is deliberate: the move hits Pakistan where it hurts most—agriculture, food, water, and energy security.

While India uses the 33 MAF from its allocated rivers mainly for agriculture in Punjab, Haryana, and Rajasthan, and hydropower, its ability to affect Pakistan’s flows is limited under normal treaty conditions. Suspending the IWT removes that limit—putting control back in India’s hands.

Pakistan has not officially responded yet, but any disruption in flows will likely trigger diplomatic escalation, legal challenges, and international mediation attempts, especially involving the World Bank.