India on Wednesday said it would suspend its participation in a crucial water-sharing agreement with Pakistan, a punitive measure that could wreak havoc on the country’s agriculture and economy.

The move came a day after militants killed 26 civilians who were visiting a scenic location in the part of Kashmir controlled by India. Both countries lay claim to and control parts of the strife-torn region. Although India did not blame Pakistan outright, it said there were “cross-border linkages” with the attackers.

India has threatened before, in other moments of rising tensions, to pull out of the Indus Waters Treaty, which both countries signed in 1960. If India follows through this time, it could restrict the flow of water that is used for most of Pakistan’s crop irrigation and human consumption. Agriculture represents one-fourth of the country’s economy.

The Pakistani government said on Thursday that it would consider any blockage of the water an “act of war.” India, larger and more developed, would have far less to lose by walking away from the pact, although it might face criticism from the global community and raise questions about whether it is flouting international law.

Here’s what to know.

What is the Indus Waters Treaty?

It is an agreement between India and Pakistan that specifies how the waters of six rivers and their tributaries, called the Indus waters, will be used by the two countries.