Lives around northern Dutch river (5)
I believe the answer is:
indus
'river' is the definition.
(Indian river)
'lives around northern dutch' is the wordplay.
'lives' becomes 'is' ('be' can be a synonym of 'live').
'around' is an insertion indicator.
'northern' becomes 'n' (abbreviation e.g. N. Ireland).
'dutch' becomes 'du' (abbreviation).
'n'+'du'='ndu'
'is' enclosing 'ndu' is 'INDUS'.
(Other definitions for indus that I've seen before include "9 of Pakistan" , "Pakistani river" , "Great river of South Asia" , "Major Asian river" , "Largest river of Pakistan" .)