Although the Mahakali Treaty was passed by the parliament in Asoj 2053, there were many complications in its implementation. Because, the Detailed Project Report (DPR) on the facilities to be provided by both countries and the structures to be built on the border as per the treaty had not been prepared and accepted by both countries. Even after a year had passed since the treaty was ratified, talks and discussions were being held repeatedly between the high officials of both countries as the report was not ready.

Before the DPR was approved, Nepal was in a lot of trouble after the Indian expert team that came to Kathmandu for discussions in the last week of Bhadra 2054 put forward proposals of a different nature than those mentioned in the agreement. The new and surprising proposal left the Nepalese officials participating in the discussions confused about how to proceed on the Mahakali issue.

In a meeting of the Joint Group of Experts (JGE) comprising officials from Nepal and India, India unexpectedly put forward a new proposal that India should get as per the agreement on the water of the Mahakali River being used in the Lower Sharda Project. While the Mahakali Agreement had a provision for equal rights to water without affecting consumption. The Lower Sharda project was located in India, about 160 km south of the Nepalese border.

India had not made any proposals on Pancheshwar and Lower Sharda in previous meetings. In the meeting, Indian officials claimed that the Mahakali Treaty passed by the Nepalese Parliament and the guidelines prepared by the Joint Monitoring Committee formed after the Parliament's approval were contradictory on the issue of water sharing.

11 water experts led by the chairman of India's Central Water Resources Commission and 13 representatives of the Indian ambassador and Nepali officials held talks for three days. Nepal presented the DPR prepared by Nepal during the discussions. However, the talks were inconclusive after India proposed to also calculate the water being used in the Lower Sharda. As the discussions focused on the issue of water, both sides were unable to reach a conclusion. Therefore, India invited India to hold talks on the issue.

A Nepali hydrological expert team had started talks at the political level regarding India's proposal. Nepal had adopted the strategy of sending an expert team only after discussing the proposals made by India in the Council of Ministers. However, even though the team was supposed to go to India within a week, discussions were not taken forward in the Council of Ministers. This is because Nepal's political leadership and experts were confused by such a proposal made by India. Nepal's experts had suggested that the government should resolve India's proposal politically.