Bhutan sells India more electricity than almost anything else it exports. This partnership began with a single dam in 1974. On 7 August 2026, both countries reviewed a relationship that now spans several major hydropower projects.
Timeline
- 1974: India and Bhutan sign their first hydropower agreement, to build the Chukha project.
- 1987: Chukha (336 MW) is commissioned. It is Bhutan’s first mega power project.
- 28 August 2025: Punatsangchhu-II (1,020 MW) is completed. It lifts Bhutan’s total power capacity by about 40%.
- 7 August 2026: Power ministers from both countries meet in New Delhi to review hydropower cooperation.
Must Know
- Hydropower is the cornerstone of India-Bhutan relations. India funds, builds, and buys power from joint projects on Bhutan’s rivers.
- Chukha (336 MW), commissioned in 1987, was Bhutan’s first mega hydropower project. It followed a bilateral agreement signed in 1974.
- Later joint projects include Kurichhu (60 MW), Tala (1,020 MW), and Mangdechhu (720 MW).
- Punatsangchhu-II (1,020 MW) was completed on 28 August 2025. It raised Bhutan’s total installed power capacity by around 40%, to over 3,500 MW.
- These projects are typically funded on a 60% grant, 40% loan basis from India, a distinctly generous model compared to purely commercial financing.
Good to Know
- Surplus power from Chukha, Tala, and Mangdechhu is exported to India. It mainly supplies eastern and northern Indian states.
- Hydropower exports are Bhutan’s single largest source of revenue and foreign exchange, making this partnership central to Bhutan’s own economy, not just India’s power supply.
- Punatsangchhu-I (1,200 MW) and Kholongchhu (600 MW) are still under construction, alongside the newer Sankosh project.
- The Mangdechhu Hydroelectric Project won the prestigious Brunel Medal in 2020, an international award recognising excellence in infrastructure and engineering.
- Cooperation now extends beyond hydropower alone. It also covers renewable energy, cross-border electricity trade, and transmission connectivity.
Test Yourself
Great to Know
- India runs a similar power sector partnership with Sri Lanka too, though built around very different projects. See IntlRel0071 — India-Sri Lanka Relations: Power Sector Cooperation for a comparison. Also see IntlRel0003 — India’s Relations with Myanmar, Afghanistan, Bangladesh, Nepal, Bhutan and Sri Lanka for the wider neighbourhood picture. For how this hydropower work fits alongside India’s other neighbourhood projects, see IntlRel0085 — India’s Neighbourhood Development Projects.
- Few bilateral relationships run as smoothly, and for as long, as India-Bhutan hydropower cooperation. Over five decades, one dam has grown into a whole shared power grid.
Current Affairs
- 7 August 2026: India’s Union Power Minister Manohar Lal met Bhutan’s Minister of Energy and Natural Resources, Lyonpo Gem Tshering, in New Delhi. (Source: PIB, Ministry of Power)
- 7 August 2026: The Ministers specifically discussed Punatsangchhu-I, Punatsangchhu-II, Sankosh, and Chukha, along with cross-border electricity trade and renewable energy. (Source: PIB, Ministry of Power)
- 28 August 2025: Punatsangchhu-II’s final unit was synchronised with the power grid, completing the 1,020 MW project and lifting Bhutan’s capacity by about 40%. (Source: The Tribune)
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