Pakistan is reportedly bearing the entire cost of the Indus Waters Treaty arbitration and related proceedings, including India's share.
India has boycotted the Permanent Court of Arbitration (PCA) since 2023, maintains the tribunal lacks jurisdiction, and has stayed away from hearings after placing the treaty in abeyance in May 2025.
The report estimates Pakistan's expenditure at over $600,000, with Islamabad continuing to fund both the PCA proceedings and subsequent Neutral Expert meetings in India's absence.
Why Pakistan Is Paying India's Share in Indus Waters Treaty Arbitration
With India staying away from Indus Waters Treaty proceedings after putting the pact in abeyance, Pakistan is reportedly bearing the full cost of arbitration and Neutral Expert processes
Indus Water Treaty Photo by Akshit Garg
Summary
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Pakistan is bearing the full financial burden of the ongoing arbitration proceedings under the Indus Waters Treaty (IWT), including India's share of the costs, after New Delhi suspended its participation following the April 22, 2025, Pahalgam terror attack, according to a report by The Economic Times.
The report said Pakistan has spent well over $600,000 to keep the proceedings alive as India continues to stay away from both the Permanent Court of Arbitration (PCA) and Neutral Expert processes.
Pakistan Paying India's Share
According to The Economic Times, the average cost of PCA proceedings is around $300,000 per country.
With India refusing to participate, Pakistan is currently paying not only its own costs but also India's share, pushing the total expenditure beyond $600,000.
India has maintained its boycott of the Pakistan-backed PCA proceedings since 2023, arguing that the arbitration process is not legally valid because parallel Neutral Expert proceedings were already underway under the treaty framework.
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India Rejects PCA Jurisdiction
Following India's decision to place the Indus Waters Treaty in abeyance in May 2025, Pakistan again approached the PCA. In June 2025, the tribunal declared itself competent to examine the dispute and held that the treaty does not permit a unilateral suspension.
Since then, the PCA has reportedly conducted at least eight hearings, all of which have been boycotted by India.
India has consistently maintained that the PCA lacks jurisdiction over the dispute and considers the arbitration process illegal.
PCA Notes India's Non-Participation
In its August 8, 2025, "Award on Issues of General Interpretation of the Indus Waters Treaty", the PCA observed that India neither participated in the constitution of the court nor attended its meetings.
It further noted that India had not advanced any of the funds requested by the tribunal to cover arbitration costs.
Earlier, in its May 15, 2026, order on the issue of "maximum pondage," which favoured Pakistan, the tribunal said the allocation of arbitration costs would be decided in its final award under Paragraph 26 of Annexure G of the 1960 Indus Waters Treaty.
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India Paused Neutral Expert Proceedings After Pahalgam Attack
Unlike the PCA process, India had participated in the Neutral Expert proceedings until the Pahalgam terror attack. According to The Economic Times, India paid its share of the costs for all Neutral Expert proceedings until July 2025.
However, after formally seeking a pause in the process, New Delhi did not attend the fourth meeting of the Neutral Expert, held between November 17 and 21, 2025, or subsequent meetings, including the fifth round in May 2026.
The report said Pakistan has since been covering the associated costs of those proceedings as well.