Meme Mania #1

 The recent meme (image follows) has taken the internet by storm. Following a certain tragic event of the 22nd of April, when the victim country expressed its "revenge" for this event, this meme was posted.

The meme came due to the fact that the country orchestrating the attacks faces water shortage and depends on a channel from the victim country for water.

As revenge, the victim country blocked off, temporarily, a treaty arranged and negotiated by the World Bank, and was signed in a major city of the attacking country in 1960.

FITB. Also, give me the name of this major city X where the "treaty" was signed in 1960, which is known for its infamous, stomach-ache causing biscuits and bakery items, nomenclature due to its connections with a Nizam state that actually produced this.