This paper attempts to find out the water issues between India and Pakistan and its implications over relations of these bilateral states. This study investigates the conflicts over constructing dams or water storages on cross boundary rivers for example the building of Baghliar Dam, Kishanganga Plant and Wullar Barrage by India and also investigates Pakistan’s response to these projects, judgment of intercontinental Court of Arbitration, responses of both sides and confidence building measures signed regarding the issue. This study explores that the water issue would prove disastrous if it was not solved in time. For peace in South Asia, solution of this conflict is necessary as early as possible.