This article is an attempt to understand India's concerns over the Diamer Bhasha dam project within the overall ambit of India's approach towards Pakistan-occupied Kashmir (PoK). It makes a holistic assessment of the feasibility of the project, the political and technical issues involved in it, the long-term strategy of Pakistan and China in the region, and the local reactions, which must inform India's future policy preferences regarding PoK. The article is divided into three parts. The first part deals with the factors that make the project controversial and these are discussed under three broad headings: location, financial constraints and geopolitical drivers. The second section outlines India's concerns—political, socio-cultural, ecological and geopolitical. The third and final section sums up the key findings of the article and suggests concrete options for Indian policy makers to readjust their overall policy on PoK in general and on the construction of the Diamer Bhasha dam in particular.