Three of the arrangements that have governed South Asia's great rivers are under strain at the same time. For investors in agriculture, power and infrastructure, water is now a political risk.
For decades, the great rivers of South Asia were governed by arrangements that, whatever their flaws, made water a technical question. That is changing. Three developments, on three river systems, have made water a strategic variable at the same time.
The Indus
The Indus Waters Treaty of 1960 survived several wars between India and Pakistan. In April 2025, after the Pahalgam attack, India announced that it would hold the treaty in abeyance. Pakistan, whose agriculture depends heavily on the western rivers of the Indus system, has said it would treat any attempt to stop or divert its share of the water as an act of war.
India's practical capacity to change flows in the short term is limited by infrastructure. The larger change is that the treaty's mechanisms for data sharing and dispute resolution are no longer functioning as before, and that water has been placed explicitly on the list of instruments of pressure.
The Ganges
The Ganges Water Treaty between India and Bangladesh, signed in December 1996 for thirty years, governs the sharing of dry season flows at Farakka. Its term runs out in December 2026. Renewal talks take place against a changed political relationship after Bangladesh's 2024 transition. A lapse without a replacement would not stop the river, but it would remove the agreed formula for the months when water is scarcest.
The Brahmaputra
In July 2025, China began construction of a very large hydropower project on the lower reaches of the Yarlung Tsangpo, which becomes the Brahmaputra as it flows into India and Bangladesh. There is no water sharing treaty between China and the downstream states, only data sharing arrangements. India and Bangladesh have raised concerns about the project's effect on flows, sediment and flood forecasting.
None of these rivers will run dry. The risk is that water becomes one more lever in disputes that were already difficult, and that the data and procedures that made it predictable weaken.
What this means for investors
| Exposure | Main risk |
|---|---|
| Agriculture and food in Pakistan and Bangladesh | Reduced predictability of dry season flows; political pressure on water allocation |
| Hydropower in India, Nepal and Bhutan | Projects drawn into interstate disputes; legal challenges and delays |
| Infrastructure and cities downstream | Weaker flood data sharing; sediment changes |
| Political risk generally | Water as a trigger or amplifier in India and Pakistan crises |
Key takeaways
- Water governance on the Indus, Ganges and Brahmaputra is under strain at the same time.
- The Ganges treaty's December 2026 expiry is a near-term signpost worth watching.
- For most investors the risk is political and procedural, not physical shortage in the short term.
- Agriculture, hydropower and downstream infrastructure carry the most direct exposure.
This analysis is published for general information and does not constitute investment, legal or other professional advice. For a view tailored to your exposure, book a briefing call.