India could use Indus River water treaty to pressure Pakistan over LOC tensions

View of the Indus River passing through the town of Dasu, Pakistan.
Getty Images

"Blood and water can't flow together," India's Prime Minister says. This is no cliche - shared water resources are a key issue in the increasingly fraught relationship between India and Pakistan.

The South Asian neighbors have been at loggerheads since September 18, when four gunmen killed 18 Indian soldiers in an army base camp in Uri, a town in the disputed territory of Kashmir. New Delhi claimed the attackers were members of the Pakistan-based terror group Jaish-e-Mohammed, and accused Pakistan of involvement in the attack, a claim the Islamic republic denied.

Tensions were further inflamed on September 29, when India said it led "surgical strikes" on suspected terrorist bases in Pakistan-controlled Kashmir - strikes that Pakistan then insisted did not occur.

"While India has likely launched such raids in the past, those were kept under the cover of secrecy," Rebecca Keller, an analyst at geopolitical intelligence firm Stratfor, told CNBC. "This was the first time New Delhi openly announced such an action, which marks a break with precedent."

She forecast further strains on ties as Islamabad mulled an appropriate response to India's more open aggression.

"This means we may see an uptick in cross-border firing between both sides across the Line of Control," she said, referring to the de facto border through Kashmir that separates India and Pakistan.

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Geopolitics muddle China's bid for India infrastructure

Experts largely agree that a full-blown war between the two nuclear-armed states is unlikely, as it would damage India's international reputation and Modi's efforts to turn the populous nation into an economic powerhouse.

New Delhi would instead likely look for other economic and diplomatic measures to pressure Pakistan, Indian officials told Reuters, and this is where shared water resources are key.

The Indus Water Treaty, a 56-year old water distribution pact between India and Pakistan, sets out how the two countries will share the Indus River and its tributaries. The main Indus River flows through China, India and Pakistan and has multiple tributaries .

Under the agreement, India has control over the eastern rivers in the Indus system of rivers, while Pakistan has control over the western rivers, which flow through India first. The treaty allows India to use 20 percent of the total water carried by Pakistan's section of the Indus River for irrigation, transport and power generation There is also a permanent Indus Commission that manages the terms of the treaty and resolve disputes over water-sharing.

"Blood and water can't flow together," Prime Minister Narendra Modi said on September 26 in a meeting to review the treaty, according to the Economic Times of India, effectively putting the pact on the table as a potential tool for retaliation against Pakistan.

India has said it is looking at maximizing its water usage by accelerating the construction of hydropower plants along the western rivers that Pakistan relies on. It has also hinted at reviving the Tulbul project, a dam that has been a source of dispute between the two countries since 1987.

Pakistan was described as one of the world's most "water-stressed" countries in a 2013 Asian Development Bank report, and the possibility India could suck more water from Pakistan's sections of the river are a serious threat.

"The greatest threat to Pakistan's economic livelihood would be the increasing threat of water scarcity and water stress along the Indus basin," Stratfor's Keller said.

The Indus River supports nearly three-quarters of Pakistan's total irrigation of agricultural land, according to Stratfor. Factors such as pollution and an expanding population are already weighing on water availability per capita, even as demand is forecast to rise nearly 30 percent by 2025.

The potential risks inherent in India using more of the shared water resource have not been not lost on Pakistan.

Sartaj Aziz, foreign policy adviser to Prime Minister Nawaz Sharif, said in an national assembly address on September 27 that Pakistan would treat a violation of the Indus Water Treaty as "an act of war."

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India's response to Uri attacks was legitimate: BNP Paribas

But Stratfor's Keller told CNBC that India did not need to violate the World Bank-brokered treaty in order to leverage water supply as a tool to pressure Islamabad.

"Under the treaty itself, India is allowed the use of 20 percent of the western rivers, the Indus, Chenab and the Jhelum, and it currently does not take full advantage of this allotment [so] India has room to use water as a rhetorical tool while still staying within the parameters of the agreement," Keller said, adding that she did not expect India to disregard or formally dissolve the deal.

Pakistani politician Mohsin Leghari echoed this sentiment.

"The Indus Water Treaty has survived hostilities and even wars over the five decades since it was inked ...Breaking an international treaty would be a dangerous precedent for a country aspiring to be a major global economic power," Leghari, member of the Pakistan Senate, told CNBC.

"I take Modi's threats as rhetoric to drum up support for his party in the forthcoming state elections, as Pakistan bashing goes well with the Indian voters," he added.

India's government did not respond to CNBC's request for comments. But aside from using water resources to pile the pressure on Pakistan, there are also domestic considerations at play.

"India is clearly keen to improve its hydropower capabilities to satisfy its growing hunger for energy," Jan Zalewski, senior India analyst at global risk consultancy Verisk Maplecroft, said. "With the Indus Water Treaty now on the table as a bargaining chip, public pressure for the Indian government to seek revisions [to the treaty] will increase."

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