Pakistan plans to formally challenge India’s suspension of the Indus Waters Treaty, while India urges the IMF to review Pakistan’s critical bailout loans, raising fears of a deepening diplomatic and economic crisis.
In a sharp escalation of South Asia’s geopolitical standoff, Pakistan has decided to issue a formal diplomatic notice to India following New Delhi’s unilateral suspension of the decades-old Indus Waters Treaty. Officials from Pakistan’s Indus Commission confirmed that the Ministries of Foreign Affairs, Water Resources, and Law have finalized initial consultations on the matter.
The diplomatic note, to be issued soon, will demand a detailed explanation from India regarding its suspension of the water-sharing agreement, which has been a cornerstone of regional stability since the 1960s.
Tensions Rise in Pakistan-Administered Kashmir Amid India Standoff
Pakistani officials said they are also preparing to raise the issue at international forums, accusing India of “water terrorism” and asserting Pakistan’s legal and moral legitimacy under the treaty.
“All further steps will proceed after formal approval from the federal cabinet,” officials added, reiterating Pakistan’s commitment to peaceful dispute resolution and international law.
Meanwhile, India has approached the International Monetary Fund (IMF) to review its loans to Pakistan, an Indian government source said.
The move comes after last week’s deadly attack on Hindu tourists in Indian-administered Kashmir, which left 26 dead. India has blamed Pakistani nationals for the attack, labeling them “terrorists,” while Islamabad has denied any involvement and called for an independent investigation.
In addition to suspending the Indus treaty, India and Pakistan have closed their airspace to each other’s airlines, raising fears of a potential military escalation between the nuclear-armed neighbors.
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Pakistan, which last year secured a $7 billion IMF bailout and a $1.3 billion climate resilience loan in March, is heavily reliant on the program to stabilize its fragile $350 billion economy. Pakistan’s finance ministry advisor, Khurram Schehzad, said the IMF program remains “well on track” and noted that Pakistan had productive meetings with global financial institutions in Washington.
The intensifying standoff has drawn international concern. U.S. Vice President JD Vance called on Pakistan to cooperate with India in investigating the attack and defusing tensions.
The disputed Kashmir region, claimed in full by both India and Pakistan, has long been a flashpoint for violence and diplomatic breakdowns. With both countries now entangling water, economic, and security issues in their standoff, the world watches anxiously for signs of de-escalation.
