Islamabad: India must limit work on a hydroelectric plant in Indian Illegally Occupied Kashmir (IIOJK) and uphold a water-sharing treaty with Pakistan, which it suspended over tensions with its neighbouring country, the Permanent Court of Arbitration (PCA) said on Monday.
For over six decades, India and Pakistan have managed the Indus River system jointly through the Indus Water Treaty (IWT) transboundary water sharing agreement signed on September 19, 1960. Last year in April, India suspended the treaty in the wake of the Pahalgam attack that it unreasonably blamed on Pakistan. However, Islamabad has multiple times warned India of consequences for regional peace and security if it sought to deprive Pakistan of waters allocated to it under the IWT.
The Hague based court said India had no justification for ending or suspending the agreement. The court said a neutral expert, appointed by the World Bank, would judge by July 2027 whether the construction of hydroelectric plants in the Himalayan region was in line with the treaty.
The Indian foreign ministry said in response to the court's ruling that it categorically rejected an order by the PCA to uphold the treaty. The statement said that India's 2025 decision to hold the IWT in abeyance remained in force. In May, the PCA upheld its earlier ruling supporting the continued validity of the IWT, ruling that India cannot unilaterally suspend the agreement.
The tribunal reaffirmed that the treaty remained in force, rejecting arguments that either party may withdraw or suspend it without mutual consent. It said the legal framework governing the sharing of the Indus river system continued to bind both India and Pakistan.
Pakistan has repeatedly raised concerns that Indian run-of-river projects could reduce downstream flows and harm agricultural output.
Last year in August, the PCA also ruled in favour of Pakistan on issues of general interpretation of the IWT, saying that India would let the flow the waters of the Western rivers for Pakistan's unrestricted use.
The Hague based PCA issued a binding award on the interpretation of the IWT on August 8, 2025. The case was brought by Pakistan in 2016. The court says that awards of a court of arbitration and the decisions of a Neutral Expert are final and binding on both parties.
The PCA has also ruled that the specified exceptions for the generation of hydro-electric plants must conform strictly to the requirements laid down in the IWT, rather than to what India might consider an "ideal" or "best practices" approach.
For over six decades, India and Pakistan have cooperatively managed the waters of the Indus River system, a vital resource for both nations. Despite enduring conflicts, the 1960 IWT has remained a cornerstone of their bilateral relations, facilitating shared access to water resources.
