Abstract: The Mahakali treaty has created a deadlock situation on the sustainable harvest of not only the water of the Mahakali River but also other potentials in different rivers of Nepal for hydropower and other river-related projects between Nepal and India. Even after two decades of the enforcement of the treaty on 1997, there is no progress in the agreed terms of the agreement yet, rather many provisions of the treaty and the letter exchanged are highly criticized in Nepal. Thus, this paper attempt to deal with the most controversial provisions and present the view from Nepalese perspective. It also deals with the possibilities of re-negotiating the treaty in the context of changing geopolitical dynamics with the pro-active involvement of China in Nepal.