India’s control over the hydropower resources in the Indian Illegally Occupied Jammu and Kashmir (IIOJK) represents a key component of its broader strategy to economically dominate and politically subjugate the region. With the National Hydroelectric Power Corporation (NHPC), a state-owned enterprise, at the helm of this exploitation, the natural wealth of IIOJK is being plundered, leaving the local population deprived of the benefits of their own resources. This not only reinforces New Delhi’s hold on the disputed region but also stifles the region’s economic autonomy and potential. The hydropower issue in IIOJK, therefore, goes beyond a mere economic concern; it is intricately linked to India’s long-term political objectives in the region.
NHPC’s Monopoly Over IIOJK Hydropower
Jammu and Kashmir, blessed with vast hydropower potential, is estimated to possess around 20,000 megawatts (MW) of hydropower capacity, of which 16,000 MW is considered exploitable. Despite this enormous potential, the vast majority of hydropower projects are controlled by the NHPC, an entity which operates under the authority of the Indian government. These projects, including some of the largest in the region such as Salal, Uri-I, Dulhasti, and Kishanganga, generate substantial revenue, yet the benefits for IIOJK’s population remain negligible. While these projects bring in billions of dollars annually, the region itself suffers from an ongoing energy deficit, with electricity often in short supply for local needs.
Take, for example, the Kishanganga project a 330 MW facility located in the Gurez Valley of IIOJK. Despite being one of the flagship hydropower projects in the region, Kishanganga has become the focal point of international legal disputes, particularly with Pakistan. In 2011, the Permanent Court of Arbitration ruled that the project violated the terms of the Indus Waters Treaty (IWT) between India and Pakistan, and ordered a stay on its construction. This legal judgment, however, has done little to stop India’s push for control over the region’s water resources, highlighting India’s disregard for international norms when it comes to resource exploitation in IIOJK.
Even within India, NHPC’s practices are controversial. The 20 July 2000 agreement between the IIOJK government and NHPC allowed the latter to construct and operate hydropower projects under a Build-Operate-Transfer (BOT) arrangement. Yet, NHPC has repeatedly failed to fulfill its commitments, according to multiple committee reports, including the 2006 Rangarajan Committee Report, which recommended increased benefits for the local population. This, too, was ignored, and IIOJK continues to see limited local investment and negligible returns despite being the source of a significant portion of India’s hydropower production.
Resource Plundering
India’s hydropower policy in IIOJK is structured to ensure the Indian government’s dominance over the region while keeping the local economy in a state of perpetual weakness. NHPC profits immensely from these hydropower projects, while the people of IIOJK are forced to buy back their own electricity at exorbitant rates. Shockingly, only about 12% of the electricity generated by these projects is returned to the region, with the remaining 88% going to the rest of India.
This significant imbalance highlights the economic exploitation of IIOJK, with its natural resources extracted to fuel the growth of the Indian economy, while the region remains energy-deficient and financially dependent on New Delhi. Despite the abundance of resources, employment opportunities in the hydropower sector are few and far between for the local population. Most of the high-paying jobs associated with these projects go to outsiders, leaving the local population with limited economic opportunities and reinforcing the region’s dependency on India.
Moreover, the projects themselves have caused mass displacement and environmental degradation, particularly in the case of the Kishanganga and Bursar (1020 MW) projects. The construction of these dams has led to the submergence of vast tracts of land, displacing thousands of people without adequate compensation or resettlement plans. These developments are further exacerbated by the destruction of forests and the disruption of local ecosystems, which have traditionally sustained the livelihoods of many in the region. The economic disempowerment, environmental harm, and social upheaval resulting from these projects further underscore the exploitation of IIOJK’s resources.
Political Manipulation
India’s control over IIOJK’s hydropower resources serves as a tool not only for economic dominance but also for political manipulation. The abrogation of Article 370 of the Indian Constitution in 2019, which stripped IIOJK of its special status, has allowed India to override local demands for resource control. The central government has used this shift in legal status to further entrench its control over IIOJK’s resources, making it easier for entities like NHPC to expand their operations without regard for local laws, needs, or aspirations.
The 2021 Memorandum of Understanding (MoU) signed between NHPC and the Indian government further solidified this dominance, granting NHPC long-term contracts (up to 40 years) under the Build-Own-Operate-Transfer (BOOT) framework. This move has ensured that India retains full control over IIOJK’s energy resources for the foreseeable future, while simultaneously disregarding the legitimate political demands of the Kashmiri people.
Even when fully depreciated projects are returned, as per contractual agreements, NHPC has shown little inclination to return control to the local government or the people. The refusal to relinquish these resources underscores the deliberate exploitation of IIOJK’s natural wealth and highlights the broader strategy of political subjugation at play.
Water Wars
The exploitation of IIOJK’s hydropower resources is not merely an economic issue; it also has significant geopolitical implications. India’s control over these resources directly impacts Pakistan, particularly in the context of the Indus Waters Treaty (IWT) of 1960, which governs the distribution of water between the two countries. By constructing and operating dams in IIOJK, India has gained significant control over the flow of water in the Indus River system, which feeds Pakistan’s agricultural and energy needs.
India’s strategic manipulation of water resources, through the construction of dams in IIOJK, is not only a violation of the spirit of the IWT but also a form of economic leverage. The control over water, a vital resource for life, agriculture, and industry, can be used to undermine Pakistan’s agricultural economy and disrupt its water supply. The weaponisation of water is thus another aspect of India’s broader geopolitical agenda, ensuring that IIOJK remains a region of political and economic subjugation.
The continued exploitation of IIOJK’s hydropower resources is a direct attack on the region’s economic autonomy and future. The vast hydropower potential of the region should be harnessed for the benefit of its people, yet instead, it is being used to fuel India’s economic growth while leaving IIOJK economically dependent and politically constrained.
International intervention is necessary to address this issue. A transparent financial evaluation of NHPC’s earnings from IIOJK’s hydropower projects should be conducted by a UN-designated agency to ensure that the benefits from these resources are distributed equitably and that the people of IIOJK are not further marginalized. Additionally, a legal push for resource autonomy should be pursued at global forums, emphasizing Kashmir’s right to control its own natural wealth.
The exploitation of IIOJK’s hydropower resources is a neocolonial form of resource extraction, and without corrective measures, the region will remain trapped in India’s extractive policies. The international community must act to safeguard the rights of the people of IIOJK and ensure that they can benefit from their own resources, free from coercion and exploitation.
