In the backdrop of the ongoing West Asia conflict, Pakistan’s attempts to position itself as a diplomatic intermediary are drawing mixed reactions, particularly as it grapples with the consequences of deteriorating ties with India. The shift in regional dynamics can be traced to last year’s Pahalgam terror attack (April 22, 2025) in Jammu and Kashmir. At least 26 people were killed and 20 others were injured. The victims included 25 tourists from across India (including a Navy officer and an IAF corporal) and one local Muslim pony operator who died while trying to protect tourists

The incident marked a turning point in India’s strategic posture toward Pakistan. New Delhi’s response was both swift and multifaceted, combining military precision with strong diplomatic measures.Operation Sindoor was a targeted military and diplomatic response by India launched in May 2025 following a barbaric terrorist attack in Pahalgam, Jammu and Kashmir. The operation was designed to dismantle terrorist infrastructure while maintaining a non-escalatory posture toward the Pakistani state. Under “Operation Sindoor,” Indian forces carried out targeted strikes across the western border, focusing on installations believed to be linked to terror infrastructure allegedly operating under the cover of military facilities. The operation signaled a calibrated yet assertive shift in India’s counterterrorism doctrine.

Beyond the battlefield, India also made a significant geopolitical move by suspending participation in the Indus Waters Treaty—a landmark agreement that had withstood decades of hostility, including three wars (1965, 71 and 1999 Kargil conflict). The treaty governs the distribution and usage of waters from the Indus river system, a critical resource for Pakistan’s agriculture and economy. Its suspension has raised concerns about long-term water security and added another layer of strain to bilateral relations.

The suspension of the Indus Waters Treaty marks a major shift in South Asia’s geopolitical landscape. Signed in 1960 with World Bank support, the treaty had long been hailed as a rare example of sustained cooperation between India and Pakistan, surviving even during periods of war. It allocates the eastern rivers—Ravi, Beas and Sutlej—to India, while Pakistan receives rights over the western rivers—Indus, Jhelum and Chenab. With the agreement now in abeyance, concerns are rising over water security, agricultural stability, and the potential for heightened regional tensions in an already fragile environment. Pakistan is grappling with a worsening energy crisis as hydro-power generation comes under severe strain following the suspension of the Indus Waters Treaty. The disruption in water flows, coupled with broader regional instability, has significantly reduced electricity output, intensifying power shortages across the country.According to reports, declining hydro-generation has coincided with an acute shortage of oil supplies, largely driven by the ongoing West Asia conflict. The dual shock has strained Pakistan’s already fragile energy infrastructure, resulting in prolonged outages and erratic supply in several regions.In response, the government has introduced emergency measures, including enforced weekly holidays in both public and private sector offices to conserve electricity. Load-shedding has also been intensified in urban as well as rural areas, disrupting daily life and economic activity.The crisis is taking a visible toll on industrial production, with factories operating below capacity due to unreliable power supply. This comes at a time when Pakistan’s economy is already under stress, battling high inflation, declining growth, and heavy reliance on international financial assistance.

Pakistan’s long and complicated engagement with the International Monetary Fund (IMF) has entered a critical phase, as the country navigates its 24th bailout programme amid tightening financial pressures and geopolitical uncertainty.The current $7 billion Extended Fund Facility (EFF), approved in September 2024, was initially seen as a lifeline to avert default. But by April 2026, the narrative has shifted from crisis survival to managing repayments and complying with increasingly stringent reform conditions. Finance Minister Muhammad Aurangzeb recently held key discussions with IMF officials during the Spring Meetings in Washington, pressing for early approval of the next $1.2 billion tranche after completing a third economic review.At the same time, Islamabad is juggling immediate debt obligations. In a notable move, Pakistan has opted to repay $3.5 billion in matured deposits to the United Arab Emirates instead of seeking a rollover. To ease the pressure, it secured a $2 billion deposit from Saudi Arabia earlier this month as part of a broader $3 billion support arrangement.Economic projections remain cautious. While the IMF expects growth to reach 3.6% in 2026, the World Bank has trimmed its estimate to 3%, citing rising regional tensions, including the US-Iran conflict, which have driven up energy costs.With repayments looming and reforms under scrutiny, Pakistan’s economic trajectory remains delicately balanced between external support and internal adjustments.

Earlier as the Permanent Representative at the United Nation P. Harishin March 2026 made India’s position unequivocally clear: the Indus Waters Treaty will remain in abeyance until Pakistan takes credible and verifiable steps to end support for terrorism. It marks a continuation of New Delhi’s hardened diplomatic posture linking water cooperation directly with security concerns.At the heart of India’s argument is the assertion that Pakistan remains a global epicenter of terror, and that any framework of cooperation—especially one as critical as water sharing—cannot operate in isolation from the broader issue of cross-border violence. India maintains that it entered into the 1960 treaty with good faith, but the equation fundamentally changed after the Pahalgam attack, which triggered the current suspension.The message from New Delhi is clear: water cooperation can no longer be delinked from security realities, and until those concerns are addressed, the future of one of the world’s most enduring treaties will remain uncertain.The story of the Indus Waters Treaty is no longer just about cooperation—it is increasingly becoming a narrative of strain, reinterpretation, and strategic leverage in South Asia.