The people elect their leaders based on many factors, economic promise being the most important one,not just the foreign policy of the nation or their response to a terrorist attack only!
See my point is that India unlike Pakistan has a fair number of diplomatic and economic cards it can play before we mess with our trump card aka water.
If we as a nation are going to use our trumps without exhausting our other options, then I believe it will be a short sighted policy not based in real politik.
In fact I'm of the belief that water is a contentious issue and will actually turn public opinion (international) against us. We need to tread carefully.
Again, that's my opinion, you don't have to subscribe to it. I respect your views and opinions on the matter as killing 18 of our soldiers isn't something to take lightly, so I understand where you're coming from.