A Tale of Exclusion, Exploitation, and Long-Term Impact
The Indus Waters Treaty (IWT), signed on September 19, 1960, between India and Pakistan, with the World Bank as a mediator, is often celebrated as a diplomatic success, standing as a global model of cooperation over shared water resources. Brokered by the World Bank, it is heralded as one of the few examples of long-lasting peace agreements in a region riddled with conflict. However, beneath the international acclaim lies a more contentious and overlooked reality — for Jammu and Kashmir (J&K), the treaty marked a moment of political exclusion, economic disempowerment, and developmental stagnation. Despite being home to the major rivers involved in the treaty — Jhelum and Chenab — the state of Jammu and Kashmir was not consulted, and its leadership was sidelined during the negotiations The result was the alienation of the state’s natural resources, stunted economic growth, and political resentment, which continue to shape regional dynamics to this day.
Background of the Treaty
Following the 1947 Partition of India and Pakistan, the two countries inherited a shared and intricate irrigation system based on the Indus River and its tributaries. In the early years after Partition, tensions escalated when India briefly halted water supply to Pakistan in April 1948, exacerbating political disputes and further stoking fears in Pakistan that India could control the Indus system, a critical lifeline for the country’s agriculture and industry.
To resolve the crisis and prevent further conflict, the World Bank stepped in as a neutral mediator. After eight years of intense negotiations, the Indus Waters Treaty was finalized on September 19, 1960, in Karachi, with the following key figures:
▪︎ Pandit Jawaharlal Nehru, Prime Minister of India
▪︎ Ayub Khan, President of Pakistan
▪︎ W.A.B. Iliff, Vice President of the World Bank
The treaty allocated the waters of the Indus River system as follows:
▪︎ Eastern Rivers — Ravi, Beas, Sutlej — to India
▪︎ Western Rivers — Indus, Jhelum, Chenab — to Pakistan
India was permitted limited, non-consumptive use of the western rivers, such as for hydropower generation, but was prohibited from building large storage dams or diverting water for irrigation on these rivers The treaty’s purpose was to create a long-term solution to prevent water conflicts and promote cooperation. While it achieved success in fostering India-Pakistan cooperation, it overlooked the significant role that Jammu and Kashmir played in the region’s water dynamics.
Jammu and Kashmir in 1960: Political Landscape
In 1960, Bakshi Ghulam Mohammad was the Prime Minister of Jammu and Kashmir, a position equivalent to today’s Chief Minister. His government had brought stability following the dismissal of Sheikh Abdullah in 1953, and he was known for his political loyalty to the Indian Union. Despite this, Jammu and Kashmir’s political leadership was completely excluded from the Indus Waters Treaty negotiations.
Though the state held special status under Article 370 of the Indian Constitution, which granted it autonomy over its internal matters, the central government under Pandit Nehru handled the treaty negotiations without consulting the state leadership. This exclusion became a point of contention, as J&K was not only directly impacted by the treaty (since two major rivers — Jhelum and Chenab — flowed through its territory), but also because the treaty effectively denied the state any say in the management of its own resources. This lack of consultation fuelled a sense of disempowerment and alienation within Jammu and Kashmir. The political leaders in the state, both pro-India and pro autonomy, felt that their constitutional rights under Article 370 were being violated by central decisions that had direct consequences on their resources.
Developmental Impact on Jammu, Kashmir, and Ladakh
The Indus Waters Treaty had a long-lasting and profound impact on the development of Jammu, Kashmir, and Ladakh. The exclusion from decision-making and the subsequent limitations placed on the state’s ability to utilize its water resources were damaging in several key areas:
1. Loss of Sovereignty Over Natural Resources
J&K’s rivers, Jhelum and Chenab, were effectively transferred to Pakistan’s exclusive use under the treaty, and India was limited to only non-consumptive use of the western rivers (such as hydropower projects). This meant that the state lost sovereignty over two of its most important natural resources. The economic consequences were severe, as the state was no longer able to fully exploit its rivers for hydropower generation or agricultural irrigation, both of which could have contributed to its growth.
2. Hindrance to Hydroelectric Development
Jammu & Kashmir is home to vast hydropower potential due to its mountainous terrain and abundant river systems. It is estimated that the state could generate over 15,000 MW of hydropower from the western rivers alone. However, the treaty’s constraints made it impossible for the state to capitalize on this potential. India could only build run-of-the-river projects with limited water storage, and each project had to comply with strict technical specifications set by the treaty. As a result, projects such as the Baglihar Dam, Kishanganga, and Salal were delayed and faced international arbitration due to Pakistan’s objections. These restrictions greatly hindered Jammu and Kashmir’s ability to meet its own energy needs and to establish itself as an energy exporter to the rest of India.
3. Agricultural Setbacks
Regions such as Kathua, Udhampur, and the Jammu plains depended heavily on irrigation from the Chenab and Jhelum. The treaty, however, prohibited the construction of large irrigation projects, leaving the state to rely on rain-fed agriculture, which proved insufficient and vulnerable to the region’s growing population and changing climatic conditions. Agricultural growth was thus stunted, and farmers were left with few options to modernize or diversify their crops.
4. Economic Disadvantages and Lost Opportunities
Jammu & Kashmir was denied compensation for the loss of control over its rivers, despite the treaty’s clear impact on the state’s economic viability.
While Pakistan benefited from World Bank-funded infrastructure projects, such as the Mangla and Tarbela Dams, Jammu and Kashmir received no comparable investments for its own economic development
The central government, in turn, invested heavily in the eastern rivers (Ravi, Beas, Sutlej), but the western rivers flowing through Jammu and Kashmir were left neglect This created an economic disparity and exacerbated regional underdevelopment.
5. Political and Constitutional Concerns
The treaty’s exclusion of Jammu and Kashmir’s participation reflected a broader issue of centralized governance. The absence of the state’s input was perceived as an infringement on its federal rights, and many felt that the central government’s actions undermined the constitutional autonomy granted under Article 370. This exclusion from such a critical decision set the stage for political discontent that would intensify in the following decades, with calls for greater autonomy and, at times, complete revision or abrogation of the treaty.
Economic Impact on Jammu, Kashmir, and Ladakh
The economic losses to Jammu, Kashmir, and Ladakh due to the Indus Waters Treaty are significant and multi-dimensional:
1. Loss of Revenue from Water Resources
The Indus Waters Treaty fundamentally altered Jammu and Kashmir’s ability to utilize its most valuable resource — water. With the Jhelum and Chenab rivers under Pakistan’s control for most uses, the state was denied the ability to construct large-scale irrigation systems that could have greatly boosted agricultural productivity. This loss directly impacted the agricultural economy, which is still a major component of the region’s GDP.
The loss of hydroelectricity projects on these rivers, such as the potential Baglihar Dam and Kishanganga, further compounded this problem. These projects, had they been realized, could have provided significant revenue through electricity exports, created employment opportunities, and provided reliable power to local industries and households.
2. Hindering Industrial Growth
The water shortage and lack of affordable energy stunted industrial growth in the region. Jammu and Kashmir, and particularly Ladakh, have substantial mineral deposits and a skilled workforce. However, the lack of access to water and electricity hampered the development of industries, including manufacturing, textiles, and cement production, which are traditionally energy-intensive. Consequently, Jammu and Kashmir lagged behind other regions in industrial development, contributing to its economic stagnation.
3. Limited Infrastructure Investment
Jammu and Kashmir’s isolation from decision-making meant that the region was unable to benefit from the World Bank’s infrastructure investments in Pakistan, especially regarding water resource management and dams. As a result, the state continued to rely on outdated infrastructure and was unable to develop modern irrigation systems, water storage facilities, or hydroelectric power plants that could have alleviated some of its developmental challenges.
4. Economic Disparity between Jammu, Kashmir, and Ladakh
The economic disparity between Jammu, Kashmir, and Ladakh can also be partially attributed to the uneven distribution of resources under the treaty. Jammu, with its more temperate climate, was able to rely more on agriculture and horticulture, but Kashmir and Ladakh were more vulnerable due to the lack of irrigation and energy. The lack of hydropower development in Kashmir and Ladakh, alongside limited water usage for irrigation, perpetuated economic inequalities between the three regions.
Voices of Protest
Over the years, various political leaders, civil society groups, and experts in Jammu and Kashmir have consistently voiced their dissatisfaction with the treaty. Many political leaders, including those from pro-India parties like the National Conference and PDP, as well as independents, have demanded a revision of the treaty or called for greater compensation for the state’s loss of water resources.
In 2003, the Jammu and Kashmir Legislative Assembly passed a unanimous resolution calling for the renegotiation of the Indus Waters Treaty, arguing that the treaty was unfair to the state’s interests. Similarly, in 2016, the state assembly reiterated its demands for revision or compensation, stating that the treaty was detrimental to Jammu and Kashmir’s economic and political interests. Leaders argued that the treaty’s terms were no longer relevant in the modern context, especially in light of climate change and water scarcity.
The Indus Waters Treaty, while an example of successful bilateral diplomacy, came at a high cost to Jammu and Kashmir. The treaty’s global success masked the local sacrifices borne by the people of Jammu and Kashmir, who found themselves excluded from a decision that had long-term consequences for their economic development, political autonomy, and sovereign control over natural resources.
As the global climate changes and water resources become scarcer, Jammu and Kashmir’s role in water management will need to be reassessed and redefined. The region cannot be expected to bear the consequences of decisions in which it had no voice. The lack of infrastructure investment, limited irrigation access, and unrealized hydroelectric potential have all contributed to regional underdevelopment and economic disparity, particularly in border districts and remote parts of Ladakh, where infrastructure remains minimal despite rich water resources.
Only by giving Jammu and Kashmir — and now Ladakh — a rightful place at the decision-making table can India ensure a more equitable, inclusive, and sustainable approach to inter-state and international water-sharing policies. Rectifying this historical oversight is not only a matter of justice but also a necessary step toward achieving balanced regional development and lasting political stability in this strategically vital region.
Dr. Gaurav Vaid