The project will be built in the Kishtwar district of occupied Jammu and Kashmir. It is designed to produce up to 260 megawatts of electricity, generated by two underground units of 130 MW each, and is expected to begin construction early next year.

Dulhasti Stage-II will be developed by India’s public sector company, National Hydroelectric Power Corporation Limited (NHPC). The project’s estimated cost is 3,277.45 crore Indian rupees (roughly $395 million), according to official details.

Under the Indus Water Treaty, Pakistan has rights over the western rivers, including the Chenab, Jhelum, and Indus. India’s rights are limited mainly to the eastern rivers: Sutlej, Beas, and Ravi.

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India’s approval comes amid strained relations after New Delhi said it was keeping the treaty in abeyance following the Pahalgam incident. That episode led to cross-border clashes after Indian strikes inside Pakistan and a response from Islamabad.

Despite the development, Pakistan has reaffirmed its commitment to the Indus Water Treaty. Islamabad has said it will continue to take part in ‘Neutral Expert proceedings’ in good faith.

Earlier, the Permanent Court of Arbitration ruled that India must “let flow” the waters of the western rivers for Pakistan’s unrestricted use, reinforcing Pakistan’s long-held position.