The majestic Brahmaputra River flows from the glaciers in southwest Tibet, where it is known as Yarlung Tsangpo or Yarlong Zangbo and flows through Arunachal Pradesh and Assam in India before entering Bangladesh. The river is the lifeline of Assam and entire populations have moved with the river over several decades, making it the source of identity for many communities in the state. The river has impacted on the geography and economic conditions of the state in many ways; its annual devastating floods cause large-scale erosion affecting millions of people. Erosion has been a problem of great magnitude with large tracts of land being annually submerged by the river, including the world heritage site, Majuli, whose existence has been threatened.

The hydrological data on the Brahmaputra has been shared between India and China from 2002 onwards, when New Delhi negotiated a memorandum of understanding with Beijing on information-sharing about the Brahmaputra's flow into downstream Assam during flood season. This was offered by China free of cost to India for the period 2002-2008. Recent reports suggest that Beijing has conveyed to New Delhi that this hydrological information sharing on the Brahmaputra will no longer come for free, and has demanded payment for the period 2008-2012. The Sutlej River's hydrological data sharing between India and China has been paid for by India over the years, and this development is therefore not out of context, as facilities have to be maintained by the upper riparian country (China) in extremely inhospitable terrain. There has also been a fresh bilateral understanding between India and China regarding the sharing of hydrological information on the Brahmaputra, with India agreeing in principle to pay a token amount, and to discuss other modalities later. This helps India and China to jointly manage the flood effects of the rivers, which is beneficial for India.

The issue however goes deeper, and there is a general perception among analysts of Northeast India affairs, that Beijing's demand for payment for hydrological information on the Brahmaputra is linked to its larger policy of making New Delhi uncomfortable, particularly on strategic issues in India's northeastern states, primarily Arunachal Pradesh. The Brahmaputra, before it enters Assam, passes through Arunachal Pradesh, and several tributaries crisscross the state.

There have been concerns in New Delhi about Beijing's plans to divert the waters of the Brahmaputra to feed its drought-prone provinces of Xinjiang and Gansu, with reports of elaborate plans being drawn up for an ambitious project titled "South-North Water Diversion." China realizes that the issue of water and energy security would lead to grave social and political consequences. The project has three components, the eastern, central and western routes, of which the western route is critical for the Brahmaputra and could have devastating effects in India and Bangladesh. The project, centres on the "Great Bend" which is a sharp U-turn of the Yarlung Tsangpo near the Indian border, and is estimated to generate 40,000 MW of hydroelectricity, dwarfing other large-scale projects like the Three Gorges Dam in terms of hydroelectricity potential and scale. India is facing a security dilemma over the Chinese control over the principal watershed of South and Southeast Asia, Tibet, from where 10 major rivers emanate.

Interestingly, the Tibetans consider the 'Great Bend" region near the Indian border very sacred, it being the abode of the Goddess Dorjee Pagmo, Tibet's protecting deity, with the region locally known as Pemako being referred in their scriptures as the last hidden Shangri-la. The project therefore would not only trouble India, but will also evoke unrest among the Tibetan population. China plans to use nuclear technology in its ambitious project, which could lead to environmental concerns in the Eastern Himalayan region. The enormity of the problem cannot be ignored by India and therefore it has come up in several consultations between New Delhi and Beijing, the most prominent being the visit of Hu Jintao to India in November, 2006.

China has since 2002, selectively passed on hydrological information to India on the Brahmaputra, particularly on natural glacial flood lake formations upstream, which once caused massive floods in downstream Arunachal and Assam. China and India are not likely to have any major confrontation over the issue of Arunachal Pradesh in territorial terms, which are seen as token contestations, since economic cooperation outweighs these sovereignty contestations. The issue of river water diversion and the Great Bend project, however, could lead to serious issues in future, and for which India has to strategize in advance. Meanwhile, India has set the wrong precedent by following a conscious policy of legitimizing its sovereignty claims over Arunachal Pradesh, by planning huge hydroelectricity projects in this critical biodiversity hotspot, which has not gone down well with Beijing.