Black`s hopes of finding a quick solution to the Indus conflict were premature. While the Bank expected the two sides to agree on the distribution of water, neither India nor Pakistan seemed willing to compromise their positions. While Pakistan had its historical right over the waters of all tributaries of the Indus and the risk of half of western Counjab by Desertification, the Indian side argued that the pre-distribution of water should not set a future allocation. Instead, the Indian side has established a new distribution base, with waters from western tributaries to Pakistan and eastern tributaries to India. The technical discussions on the substance that Mr. Schwarz hoped had been hampered by the political considerations he expected to avoid. Pakistani President Ayub Khan of Pakistan and Fr.M Pandit Jawaher Lal Nehro of the Indian side have decided to meet and sign the agreement. In this agreement, the World Bank divided all reservoirs into two parts. The Beas, Ravi and Sutlej rivers were attributed to India, while the Chenab Jhelum and Indus Pakistan rivers were assigned. While Pakistan needed dams, barricades and canals to reveal the loss that went beyond Pakistan`s capacity and material strength. It was also decided to help Pakistan store water to build dams, dams and at least seven connecting canals, in which Indian would pay $200 million of the total cost of the program, while the balance would be provided by the World Bank, the United States, Canada, Australia, New Zealand and other Pakistan-friendly countries.
In 1960, India and Pakistan signed a water distribution agreement – known as the Indus Waters Treaty – orchestrated by the World Bank. Black also made the difference between the “functional” and “political” aspects of industrial litigation. In his correspondence with the Indian and Pakistani leaders, Mr. Black said that the most realistic thing would be to resolve the dispute over the undue if the functional aspects of the differences of opinion were negotiated in addition to political considerations. He introduced himself to a group that was looking at how best to use the waters of the Indus Basin, generating questions of historical rights or assignments out of the question. The treaty ceded the waters of the western rivers – Indus, Jhelum and Chenab – to Pakistan, and those of the eastern rivers of Ravi, Beas and Sutlej to India. It also provided for the financing and construction of dams, interconnection canals, dams and piping wells – in particular the Tarbela Dam on the Indus River and the Mangla Dam on the Jhelum River. These helped to supply Pakistan with water in the quantities it had previously received from rivers that were now attributed to India`s exclusive use. World Bank member states have provided a significant portion of the funding.
The treaty required the creation of a permanent industrial commission with a commissioner from each country to obtain a communication channel and to try to resolve issues relating to the implementation of the treaty.