India, Bhutan deepen clean energy partnership with key hydro agreements

India and Bhutan have taken a significant step toward strengthening their long-standing bilateral ties by enhancing cooperation in the clean energy sector, with a focus on hydropower and sustainable development.

The development comes during a four-day visit by Union Minister for Power and Housing & Urban Affairs, Manohar Lal Khattar, to Bhutan, where he held high-level discussions with Bhutanese leadership, including Prime Minister Tshering Tobgay. The meetings reaffirmed the shared commitment of both nations to expand collaboration in renewable energy and regional power trade.

A major highlight of the visit was the signing of the tariff protocol for the 1020 MW Punatsangchhu-II Hydroelectric Project, a flagship initiative in India–Bhutan energy cooperation. The project, jointly inaugurated in 2025 by Prime Minister Narendra Modi and Bhutan’s King Jigme Khesar Namgyel Wangchuck, is already exporting surplus electricity to India. The newly signed protocol formalises the pricing framework for power supplied from the project, ensuring long-term economic benefits for both sides.

In addition, the two countries signed a methodology for reactive energy accounting, aimed at improving grid stability and efficiency in cross-border electricity exchange. The framework is expected to streamline power trade and enhance technical coordination between the two national grids.

Both sides also agreed to broaden cooperation through an upgraded institutional mechanism that will facilitate regular review of ongoing projects and exploration of new opportunities. Areas identified for future collaboration include non-hydro renewable energy, cross-border transmission infrastructure, project financing, and capacity building.

The engagements are expected to open new avenues for partnership, reinforcing the role of clean energy as a cornerstone of India–Bhutan relations while contributing to regional energy security and sustainable growth.