Last 2 days have been horrible for all Indians in general. The latest attack means a likely major confrontation between India and Pakistan with possible attack anytime in the coming days and further retaliation and so on
Will this negatively impact markets? Very unlikely but even if it does it might have a short term impact.
we are not dependent on pakistan for anything. in fact with iwt gone, since 80% of pakistan’s agriculture depends on water from indus and other 2 rivers, they will be impacted badly in the long run. and if we and china come to terms in coming months, pakistan is in very much big trouble.
I doubt Govt will be able to unilaterally cancel IWT. When 80% of Pak’s Agriculture depends on it, they are sure to go UN & ICJ and cry there. These bodies will then say that you can’t cancel an international treaty unilaterally. I doubt Indian Govt will be able to defy their orders because then India risks losing credibility
actully gov does not care about un or icj, its just a formality. we may ignore icj ruling like we did in kulbhushan jadhav case. the point is, if we feel it is right we do it. actually i might be biased but these western bodies have a personal agenda and are not fair and all know about it, so its just a formality they know it too.
Let’s see if Govt has guts to defy these bodies
As there is no infrastructure in place, it’ll take many years to implement this in true sense.
In my opinion war will not happen , but its possible of some kind of surgical strike by Indian Army , on Net Net basis , irrespective of Indian Politicians belongs to particular political party lacks the militaristic view or capability , they are incapable of taking any military action , even against the small country like Bangladesh. 
The Government , the Politicians , if they are capable , need to think & act what is the Use of Having 4th Largest Army In the World 