Koshi Agreement (1954) & Gandak Agreement (1959): Nepal's First Water Treaties

The Koshi Agreement (Nepali: कोशी सम्झौता) and the Gandak Agreement (गण्डक सम्झौता) are the two oldest water-sharing arrangements between Nepal and independent India, and they remain among the most contested. Signed within five years of each other in the mid-1950s, both permitted the Government of India to construct a large barrage and its head-works on Nepali territory to control floods, irrigate farmland and generate hydroelectric power. In Nepali civics classrooms, Loksewa (public service) preparation and political debate, they are the standard examples cited when the phrase 'unequal treaties of Nepal' (असमान सन्धि) comes up alongside the 1950 Peace and Friendship Treaty.

The core objection has always been asymmetry. The barrages sit inside Nepal and inundate Nepali land, yet the bulk of the irrigation, flood-control and power benefit flows to the Indian states of Bihar and Uttar Pradesh downstream. Critics argue Nepal ceded regulation of two major rivers for a nominal share of the gains, without securing a proportionate return in water, power or compensation. Successive Nepali leaders — across the political spectrum — have described the deals as one-sided.

This page treats both agreements together because they share a template: an Indian-built and Indian-operated barrage on Nepali soil, a long land lease, an entitlement for Nepal to a fraction of the power and irrigation, and a coordination mechanism. It also keeps them distinct from the later 1996 Mahakali (Sharada/Tanakpur/Pancheshwar) Treaty, which followed a different, more reciprocity-conscious model.

The Agreement between the Government of India and the Government of the Kingdom of Nepal on the Kosi Project was signed at Kathmandu on 25 April 1954 (Baisakh 2011 BS). It authorised India to build a barrage, head-works and appurtenant works about 8 miles (roughly 13 km) upstream of Hanuman Nagar town, together with afflux and flood embankments, canals and protective works on land within Nepal. The stated purposes were flood control, irrigation, generation of hydroelectric power and prevention of erosion in the Kosi basin.

Under the agreement India acquired the right to regulate all supplies of water at the barrage site and to generate power there for the project, while Nepal retained the right to withdraw water for irrigation and other uses. Nepal was entitled to use up to 50 per cent of the hydroelectric power generated at the barrage power-house, at tariff rates fixed by India in consultation with Nepal. A Coordination Committee — three members from each side, chaired by a Nepali minister with the Kosi Project Administrator as secretary — was created to handle land acquisition, rehabilitation of displaced people and law and order.

The sovereignty clause stated that Nepal's sovereign rights and territorial jurisdiction over the acquired lands would 'continue unimpaired' by the transfer. Fishing rights in the Kosi within Nepal were vested in the Government of Nepal, except within two miles of the barrage where fishing was barred. India was to carry out civic administration (schools, hospitals, water supply, electricity, drainage) in the project area, while Nepal kept responsibility for law and order.

The original 1954 text drew sustained criticism inside Nepal, and it was renegotiated. A Revised Agreement on the Kosi Project was signed on 19 December 1966 (Poush 2023 BS). The revision spelled out that Nepal would have the right to draw water from the Kosi or Sun Kosi river basin for irrigation or any other purpose according to its needs — a clarification of Nepal's upstream entitlement that the 1954 version had left vague.

The 1966 revision also fixed the land arrangement as a 199-year lease of the acquired land, with a nominal annual rent, rather than an outright transfer. This lease term became a lasting flashpoint. Critics pointed out that the working life of the barrage itself was expected to be only a few decades, so tying up Nepali land for 199 years struck many as grossly disproportionate to the project's actual lifespan.

Even after the revision, Nepali commentators continued to regard the Koshi arrangement as skewed. A frequently cited comparison is that the barrage was engineered to irrigate a very large command area on the Indian side, while the irrigation actually reaching Nepal was a small fraction of that — figures on the Nepali side are usually given in the low tens of thousands of acres against the project's total command of well over a million acres downstream.

The Agreement between His Majesty's Government of Nepal and the Government of India on the Gandak Irrigation and Power Project was signed on 4 December 1959 (Mangsir 2016 BS). It allowed India to build a barrage on the Gandak (Narayani) River at Bhaisalotan — near Balmiki Nagar, on the Nepal–India frontier — for irrigation in both countries and for hydroelectric power. The barrage location is described in the treaty relative to the existing Tribeni canal head regulator.

The agreement provided for a power-house of 15,000 kW installed capacity in Nepali territory on the Main Western Canal, supplying electricity to both countries; Nepal's entitlement was set at 10,000 kW up to a 60 per cent load factor. On irrigation, the treaty described a Western Nepal Canal commanding roughly 40,000 acres and an Eastern Nepal Canal (extending toward the Bagmati) commanding on the order of 103,500 acres of gross area within Nepal, with distributary systems to be built.

As with Koshi, the Gandak agreement carried a sovereignty clause: nothing in it was to be 'deemed to derogate from the sovereignty and territorial jurisdiction' of Nepal over the affected land, and Nepal preserved its right to withdraw river water for irrigation or any other purpose. The agreement was amended by a revised version signed on 30 April 1964, which strengthened protection of Nepal's riparian rights and clarified how supplies would be reduced proportionately during periods of shortage.

The 'unequal treaty' label rests on a consistent set of complaints. First, the barrages and their reservoirs sit inside Nepal and submerge Nepali farmland, but the largest downstream beneficiaries are the Indian plains. Second, the entitlements Nepal negotiated on paper — a share of power, a defined irrigation command — have often not materialised in practice: the Gandak power-house at Surajpura has for years produced only a few megawatts against its 15 MW rating, and Nepal has repeatedly complained of not receiving the agreed water and of a barrage sill level not maintained as promised.

Third, the human and environmental costs have fallen heavily on Nepal. Displaced families in both the Kosi and Gandak project areas have complained for decades about inadequate or unpaid compensation and rehabilitation. Downstream and around the structures, Nepal has experienced recurring embankment breaches, prolonged waterlogging, sand deposition, riverbank erosion and shifts in river course — problems Nepali politicians have periodically blamed directly on the barrage design and its operation.

It should be said that Indian and some scholarly assessments frame these as cooperative, mutually intended projects whose benefits were reduced by poor implementation rather than by the treaty text alone. Peer-reviewed analyses of Nepal–India water cooperation examine both readings — 'mutuality' versus 'hegemony' — and note that the 1966 (Kosi) and 1964 (Gandak) amendments were themselves attempts to answer Nepali objections about sovereignty, water rights and shortage-sharing.

The Koshi and Gandak experiences shaped how Nepal approached every later river deal. The perception that the two 1950s agreements gave away too much for too little hardened public suspicion of India-led water projects and became a recurring theme in Nepali domestic politics, from the 1950s through the Tanakpur controversy of the early 1990s and the debate over the 1996 Mahakali Treaty.

Because of this history, later negotiations placed far more emphasis on explicit reciprocity — equal entitlement to water and power, joint investment and joint operation, and dispute-resolution machinery. The Mahakali Treaty of 1996, which required a two-thirds ratification by Nepal's parliament, is the clearest example of the post-Koshi, post-Gandak insistence that river treaties be visibly balanced.

Today the Koshi and Gandak barrages still operate and still generate periodic friction — over flood management, siltation, canal maintenance and the long land leases. For students, civil-service aspirants and general readers, they remain the essential case studies for understanding why 'unequal treaties' is such a durable phrase in Nepal's water diplomacy.