disputes with Nepal, Bangladesh and China. The Ganges-Brahmaputra-Meghna region comprises the catchment areas of three major river systems that flow through India, Nepal, Bhutan, China and Bangladesh. This system is second only to the Amazon with an annual discharge of 1,350 billion cubic meters and a total drainage area of 1.75 million square kilometers. With a population of over 600 million people living in the region, which is growing at an annual rate of two percent, there is considerable pressure on the region's resources.

The Mahakali River flows along the Nepal-India western border. The river was fixed as the western boundary between Nepal and British India in 1816. Nepal's rivers have the potential to generate 83,000 MW of electricity through hydropower generation, most of which could be exported toIndia to meet its growing energy needs -- northern India currently faces a power deficit of 9,500 MW, which is expected to rise to 20,000 MW by 2010. Although both states have reached numerous water-resource development agreements, Indo-Nepali cooperation on the river systems has been slow.

Tensions grew following India's construction of the Tanakpur Barrage on the Mahakali River in 1998. This was based on a memorandum of understanding that was signed between both states in 1991 and renegotiated as the "Integrated Development of the Mahakali River including Sarada Barrage, Tanakpur Barrage and Pancheswar Project" in 1996. The ratification of the treaty has not only soured relations between India and Nepal but also enflamed internal Nepalese politics as the Nepali Congress and United Marxist Leninist party have accused each