India-Nepal water negotiations

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The Ministry of Foreign Affairs of Republic of Uzbekistan

University of world economy and diplomacy

International relations faculty

Department: Practical Diplomacy

Essay

Theme: India - Nepal water negotiations

Prepared by A.Ochilov

Tashkent 2014

Abstract

This essay addresses the conflict over transboundary water resources from the perspective of negotiation theories, by examining the role of power in upstream/downstream negotiations. The framework shows that traditional elements of power, such as upstream positions, military and economic resources, do not constitute the only sources of power. Bargaining power can also determine the dynamics between respective riparians. Time constitutes an important source of power, and interests vary over time when political settings and security concerns shift. Downstream or more vulnerable riparians can invert situations of power asymmetry by acting on the basin-dominant riparian's interests and thus reduce its alternatives.

Keywords

asymmetry, upstream/downstream position, bargaining power, BATNA, Gang's basin, China, Mahakali river, interests, negotiation, strategy, Uttar Pradesh, Sarda, Hydro-diplomacy, water issue, cooperation,

Core of the problem

conflict negotiation water state

Strategic resource of XXI century undoubtedly is drinking water and one of the most vulnerable regions that lack water resources is South Asia with its rapidly growing population. Demand to drinking water increasing but supply is gradually decreasing mainly in rapidly developing and industrializing India. India interested in water not only as the resource but as the energy also. India's ever-increasing energy requirements speak to its potentially most important interest in Nepal -- the latter's largely untapped hydro-power capacity. Nepal's water wealth is contained in the four main snow-fed tributaries of the Ganges - the Mahakali (called Sarada in India), the Karnali (called Ghagra in India), the Sapta Gandaki, and the Sapta Kosi - which originate from glacier high in the Nepal Himalayas and join the Ganges in the flat subtropical plains of India. It is estimated that these river contribute 45% of the annual flow of the Ganges and 70% of its dry-season flow, making Nepali tributaries the lifeblood of the fertile Indian lowlands. There is another significant of Nepal because of the terrain, Nepal also provides the best, if not the only, option for downstream flood control and dry season augmentation.

Besides that Nepali water resources energetic capacity is also significant. The Nepali tributaries of the Ganges flowing through high gradient Himalayan terrain are endowed with phenomenal economic potential. The 89 sites identified so far could provide about 30 gigawatts(GW) of power and 145,000 gigawatt-hours (GWh) of energy. Thirty sites have live storage capacity of about 61 billion cubic meters that could provide perennial irrigation and flood control benefits in the lowlands.Thus main issues where sides (India-Nepal) are clashing is water sharing, building new dams and exploitation already existed ones, environmental aspects, hydro-energy etc.

Upstream and downstream dilemma

Upstream position gives to a country geographically advantage in water negotiations. Because if country didn't ratify UN conventions on using transboundary water resources it can declare water as a natural resource which can be sold. That's why in many cases upstream countries refer to their economic conditions and try to manipulate with their downstream riparian. But the results of negotiations show that Nepal cannot use its upstream geographical position to push to India. It is most likely because of their asymmetrically power. India is 40 times larger than Nepal in terms of population and 22 times larger in terms of area, moreover, it produces 400 times more electricity than Nepal, and its per capita GNP is almost twice large as Nepals. Nepal is a landlocked country which, borders by China to North and India to the south, east and west. Nepal is predominantly mountainous that's why Nepal's water resources capacity sometimes even damages its economy. For instance, a change in course of the Kosi in 2008 caused massive flooding in Bihar (as well as in Nepal), displacing millions and occasioning much loss of life.

Underdeveloped Nepal during the XX century even didn't fully use agreed treaties with India Sarda treaty 1920, Kosi 1954 and Gandaki 1959. This allotment was used by Nepal only in the end of the century through a World Bank loan for the Mahakali Irrigation Project.

Downstream position of India obliges to deal with upstream neighbor. There is relation of geographical interdependences and economic complementarities between the water resources development aspects of India and Nepal furthermore Nepal has large hydroelectricity generation potential but the demand for and consumption of electricity in Nepal is likely to grow at a rate much slower than what its hydropower potential implies. In spite of the downstream position India always tried to dominate in water negotiations with Nepal. For instance, Jawaharlal Nehru placed the dam on the huge Koshi River just on the border between Nepal and India. Most of the agricultural land ended up being under water in Nepal while irrigating most of the land in the Bihar state of India. Similarly, Jawaharlal Nehru took the advantage of the weak newly liberated Nepal for diverting the water from another huge Gandak River to India.

But situation in the beginning of XXI century began to change. If in early XX New Delhi gained its interests with pressure to Katmandu, after changing the regime in Nepal slowly developed understanding value of water resources and Nepali consent to India. Now as India's former Foreign Secretary, Muchkund Dubey mentioned “India was able to gain concessions from Nepal on the controversial Tanakpur hydroelectric power plant on the Nepal-India border only by being generous on trade and transit issues with landlocked Nepal and by providing aid for other projects such as hospitals and roads”.Former “distributive” way of negotiating with Nepal changed more to “integrative”. Because many international actors began to take part in Nepal water resources management process. This can be specified with that that Nepal's BATNA strengthening.

Besides that, political change in the country also affected to Nepal's attitude to water issue. Nepali new government amended their constitution. The government passed a new order, Article 126(2) which stated that any sharing of water resources would require an approval of a 2/3's majority in parliament. On water resource projects, Nepal did hold one other major negotiation card in that Nepal had the right to veto a proposed hydroelectric water project. India was now placed in a weaker negotiating position because any proposals would now have to please not only the incumbent government but also the opposition parties, or a majority segment of the population. This forced India to restructure its negotiating framework.

Negotiations

The first negotiation between Nepal and India under the water issue occurred between 1910 and 1920 when British India needed to harness the Sarda river, which formed the western boundary between Nepal and British India, to develop irrigation in the Uttar Pradesh. Nepal agreed to the 1920 Sarda treaty, involving an exchange of territory. In order to Sarda treaty 4,000 acres of the left bank were given to British India in exchange for an equivalent forested area.This agreement allowed British to build Sarda Barrage and the right bank Sarda Canal to irrigate northern areas of India. For that time for Nepali governors' water resources were not valuable and they preferred timber. It is quite logical decision, which took Nepali government because of its underdeveloped economy in the early twentieth century and the timber were much more valued than land to build a dam's abutment. Moreover, the agreement allowed Nepal between 3% and 4 % of the dry - season flow and no more than 9 % of what India withdrew during wet season.

The second stage of negotiations begins after Indian independence and revolution in Nepal in 1951. Goals of modernization and development and the welfare state adopted by both nations imparted a new impetus to harnessing the Himalayan tributaries of the Ganges. Sides signed Kosi and Gandak treaties which gave to India a right to control over the headworks on Nepali territory and, at the operational level, the agree-upon water releases to Nepal have not been timely. Nepali position in these negotiations also was stalling and in this circumstances when disbalance between demand and supply of water resources in favor to supply Napali side can afford to wait but Nepal therefore prefers to view its water resources more as a source of export earnings. On the other hand India has been suffering from power shortage for quite some time with constraint of energy becoming acute every year.

Meanwhile, Indian insistence on management control and refusal to allow independent assessment of downstream benefits has induced suspicion in Nepal, encouraging inactive tactics. The relationship between the two countries on water resources has been inconclusive and often unsettled. Even so as a result of Nepal's demand for hydroelectric power or modern irrigation was already very low compared with that of India, there was no new agreements were entered into with India until 1991.

The third stage of negotiations

Natural boundaries have always played an important role in determining relations between states. South Asian countries are linked by the meandering Himalayan rivers, linking various states into one ecological unit. This not only highlights the existing mutual interdependence thus giving rise to cooperation and confrontation on various competing issue areas, but also points out the need for developing an integrated strategy on shared resources in South Asia.This interdependence of action and reaction cautions for a more integrated, a more dialogic, a more consensual and a more responsible posture towards an issue, which governs the livelihood of one-fifth of world population in South Asia. Understanding this in January 29th 1996 by Nepali and Indian government were signed The Mahakali Treaty concerning the Integrated development of the Mahakali River including Sarada Barrage, Tanakpur Barrage and Pancheshwar Project.

The Mahakali Treaty specifies that both India and Nepal have equal entitlement to utilize the waters of the Mahakali River without prejudice to their respective existing consumptive uses. This Treaty further specifies that both countries agree to implement the PMP in accordance with the Detailed Project Report being jointly prepared by the countries. The Mahakali Treaty also added, in this context, that India would supply 350 cusecs of water for the irrigation of Dodhara-Chandani area in Nepal. An interesting feature of the Mahakali Treaty is the establishment of a joint Indo-Nepalese commission, called the Mahakali River Commission. This Commission is guided by the principles of equality, mutual benefit and no harm to either of the countries. The joint nature, both from an organizational as well as financial standpoint, is well reflected because the Commission will be composed of an equal number of representatives from both countries and its expenses also are to be borne equally by both India and Nepal.

Maintaining the flow and level of water in the Mahakali River is one of the general principles established by the Treaty. India and Nepal each agreed not to use, obstruct, or divert the waters of the Mahakali River, so as to adversely affect the natural flow and level of the river. While the notion of adverse effect is not defined in the Treaty, and thus leaves room for controversy, this requirement does not preclude the use of the waters of the Mahakali River by the local communities living along both sides of the River as long as such use does not exceed five percent of the average annual flow at Pancheshwar.

Alternatives

An alternative view in Nepal advocates rejecting large-scale water development and favoursdecentralised, relatively small, environmentally benign projects (whether for irrigation or for hydro-electric power) primarily for Nepal's own needs. Export of electricity is not ruled out but large generation primarily for export to a single buyer (India) is not, in this view, desirable. This alternative approach of national capacity building, local government participation, and use of cheap and reliable electricity to provide national industries with a competitive edge could help resolve some of the challenges Nepal faces.

Beside this as an alternative can be used China's participation in Nepali projects. Even Nepal's water resources far from Chinese economic centers but hydroelectric energy can be provided to central China. In considering Chinese new internal policy which intends to develop central and western parts of China using Nepal's hydroelectric capacity will be quite good opportunity. Moreover, it will give to China a chance to influence to its major rival in South Asia.

Conclusion

Negotiations between India and Nepal on water issue are one of the best examples of asymmetric power negotiations where downstream country influences upstream country. In every stage of negotiations on the assumption of governors of sides negotiations were distributive or integrative mostly on the basis of Indians.

In terms of underdevelopment Nepal were not successful enough during the negotiations. To some extant their geographically locked position and misunderstanding existing conditions didn't give him a chance to strengthen their BATNA in early negotiation stages so they cannot achieve success because they had not option. In my opinion actually this locked position forced Nepali to use stalling tactics. Only after participating in Nepali projects international organizations and other actors strengthened Nepal's BATNA so was in late 1990 signed Mahakali treaty which formally equaled Nepal and India in terms of using Mahakali water resources.

Indian dominating position even it was downstream country acts on the premise that Indian power considerably exceeds Nepal's and India has leverage over Nepal. Indian

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