Water insecurity anticipates the ample threat to livelihood, economy, development, environment, peace, security, and poverty reduction efforts in South Asia. This study has attempted the analysis of accords, treaties, and water policies in the region to assess the relationship of water security, environmental security, and conflict in a national (Pakistan) and regional (South Asia) context using multi-criteria decision analysis (MCDA). Twenty-four technical, economic, social, environmental, and political criteria have been selected to present the relationship logically in terms of obligations of international water laws. The results express various gaps in the selected criteria which were the probable cause of environmental damage, conflicts, and mistrust. Moreover, environmental diplomacy has been endorsed as a tool for dispute settlement due to its non-aggressive and flexible characteristics. Dispute settlement and cooperation on shared water resources can foster sustainable development, poverty reduction, and environmental sustainability.