At a time when there is growing debate over the compensation issue of Kosi , Indian Embassy issued a press release clarifying the matter. According to Indian Embassy, the Kosi land compensation issue pertains to the 1950s when land was acquired for construction of embankment, barrage and afflux bunds.  Since there is no record of avulsion or breach of embankment since that period, it appears that the compensation is being claimed for land that lies inside the two embankments. The issue of this type of compensation has been discussed in various bilateral meetings since 1964.

 However, a final solution was found out in 14th meeting of Kosi Coordination Committee (KCC) held on 20th February 1967. In this meeting, the matter had been discussed in detail. During the discussion, the Indian side mentioned that the Kosi Coordination Committee had already decided that instead of Rs. 50,000/- as recommended by the Kshetra Bikram Rana Commission, a sum of Rs. 1,95,000/- should be paid to the people having lands within the embankments, by the way of relief, in liquidation of all claims past, present and future for the damages said to have been caused. It was further informed to the Committee that this sum of Rs. 1,95,000/- had already been deposited by the Project Administration into Nepal's treasury.

Article 8 which says that compensation is to be provided by India is to be disbursed to the affected by GON. India has already provided Rs. 1,95,000/- as compensation amount  in liquidation of all claims past, present and future for the damages said to have been caused on the recommendation of Kosi Compensation Committee in 1967.

It may also be noted that despite the fact there is no provision in the Kosi agreement to pay compensation for submerged or eroded land, Government of India paid compensation to liquidate all claims in 1967.