There is no difference of opinion about the idea that development of water and hydroelectric power resources in the Indo‐Nepal region would be of substantial mutual benefit to both countries. Any development in the region of Nepal and the Indian States of Uttar Pradesh and Bihar would be of considerable benefit to the people, as this region is one of the poorest in the world. Large projects have been discussed between the two countries for several decades. However, none of these projects has reached even the design stage. Consequently benefits from these projects will take at least two or more decades to reach the people. The present study was undertaken to understand the reasons for lack of progress in these projects. The problem is stated first, followed by a description of the physical features of the area under consideration. The water and power projects already undertaken and important projects which are being considered are discussed next. Several reasons for the lack of action, and the needs for research, are specified. The paper concludes with a set of recommendations.