The Covenant of Water follows a twelve-year-old girl who is soon set to become the spouse of a 40-year-old agriculturalist. As is in line with customs, the girl decides to depart her familial home and go to her spouse's residence in Parambil, Kerala, as soon as possible. The night before her departure, the girl and her mother shed tears together, working to accept the reality of the situation. The girl's father passed away, leaving her mother alone and without help.
The novel is told from 1900 to 1977 and follows the girl as she integrates into her new family. That family has long been afflicted by what she eventually calls the Condition, wherein one family member drowns from every direction.
The novel follows the young girl and the experiences of a Scotsman from Glasgow called Dilby Kilgore, who joins the Indian Medical Service to help people around him. Because they meet, their destinies radically change. The girl, who is called Big Ammachi, has to adapt to her new life on the Parambil estate. On the other hand, Digby, the Scottish surgeon, acclimates himself to the Indian way of life.
Big Ammachi deals with the death of her stepson, JoJo, who drowned. Not only that, she is forced to contend with her Baby Mol's developmental challenges. Not only that, she is forced to endure her husband's death after the birth of their son, Philipose. Despite the considerable age difference and the nature of their arranged marriage, the couple had cultivated a deep love, causing her tremendous grief. With Philipose, she tries to find a remedy for the Condition.
Meanwhile, Dr. Digby Kilgour moves to India to seek success that eluded him in his home Scotland. He becomes a skilled surgeon whose career ends abruptly when a tragic fire caused by a fallen candle, claims the life of his lover and maims his hands beyond repair, thus ending his career. After the accident, he buys an estate and tries to become a farmer, something which proves difficult with his hand, which another doctor helps him repair. Over time, Digby grows close to the Parambil family, especially a young girl named Elsie, who performs a tracheotomy on a young boy with Digby's help.
However, tragedy strikes again when Philipose and Elsie's son dies in a horrific accident. This causes Philipose to take up opium, which he quickly becomes addicted to. The strain of the addiction ruptures their relationship, causing Elsie to leave. Eventually, however, she returns, leading to the birth of their daughter, Mariamma. Elsie, however, subsequently disappears in what appears to be a suicide.
Philipose overcomes his addiction to Mariamma and ultimately raises her with Big Ammachi's assistance. As an adult, Mariamma becomes a doctor, hoping that she will unravel the mystery that is the Condition. She eventually does just that and reveals her true parents.
In her reunion with her mother (who has come down with Leporsy), Mariamma comes to terms with her past. She forgives her mother and comes to terms with her past.
