One of the major rivers in Northeast India and Asia, the Brahmaputra originates in Tibet and flows into Arunachal Pradesh and Assam before crossing the Bangladesh boundary.
Beijing has always claimed that a hydropower project on Brahmaputra river in Tibet was not obstructing the water flow to India as the dam wasn't big enough.
Speaking to Indian media hours before his departure, Menon said water was a sensitive and emotional issue for both countries.
"We are measuring flows," he said, adding that the question was whether the Chinese have a structure to control the flow of water. "No," he said was the answer from Beijing.
Flow of water, Menon said was relevant. It was important for India to monitor water flow as it could give an idea about, "…what could happen "if they (China) held water and released it suddenly?"
"It is hypothetical (situation) but possible they might do it. So far so good. So far the flows (of water) are what they were. They (China) said nothing we are doing affect the flows," the NSA said and added that China was sharing with India on the issue. "We will keep working with them at it, because it is a sensitive issue."
Menon had discussions with Chinese officials both on the potential conflict over water and the ongoing dispute over land boundaries before his two-day trip winded up Tuesday.
His trip ended prematurely after the Indian embassy cancelled a book release function on Tuesday evening to pay homage to former Prime Minister IK Gujral who passed away last week.
Like Chinese officials on Monday, Menon too said progress was being made in resolving the longstanding border dispute in a "fair, reasonable and mutually acceptable" manner.
"A common understanding" on the issue Menon said was reached during the six-hour talks with outgoing Chinese counterpart, Dai Bingguo.
The NSA said the talks were in the second stage of a three-stage process which had been agreed upon earlier. "The first stage was to work out the guiding principles. It resulted in the 2005 agreement on the political parameters and guiding principles for boundary settlement.
The second stage is aimed at working out a framework for boundary settlement.
"Once we have a framework we will proceed to the actual business of drawing boundary that is fair, reasonable and mutually acceptable," he said.
"We are in the middle of the second stage. What we try to do in the common understanding which we prepared was to say where we are today," he said.
"But today one cannot say we are at that final point. It is complex, it is an issue that has been there for some time; that is politically sensitive on both sides, we have to work our way towards it. But we have increased our area of understanding between us steadily, thanks to the special representative (SR) process."
On a recent media report that the border talks had crumbled, Menon called it "pure speculation and most of it factually untrue and misleading." Most of it is false," he said.
Menon played down Indian navy chief, Admiral DK Joshi's comment on Monday - while the Indian delegation was in Beijing - that the government could dispatch forces to South China Sea to protect Indian interests there.
"The Chinese also know how these things happen. Nobody raised it with me. Nobody mentioned that. I think they recognise the media plays a role. In the past they have complained about the role that the media has played," he said.
The Indian diplomat brushed aside a question on whether he was disappointed not to meet any one from the new leadership who had taken up Communist Party of China (CPC) posts at the end of the 18th National Congress of the Party last month.
"Not at all. I actually got bumped up because I got to meet the chairman of the NPC Standing Committee (Wu Bangguo)," he said.