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India, Bhutan Sign Key Pacts to Boost Hydropower Trade & Grid Stability

India and Bhutan have signed two key agreements to streamline their bilateral power trade during a visit by India's Power Minister Manohar Lal. The pacts include the tariff protocol for the jointly inaugurated 1020 MW Punatsangchhu-II Hydroelectric Project and a technical framework for reactive energy accounting to enhance grid stability. Minister Lal met with Bhutan's Prime Minister Tshering Tobgay and Energy Minister Lyonpo Gem Tshering, reaffirming commitment to clean energy cooperation. The visit also established an enhanced institutional framework to regularly coordinate on future initiatives in non-hydro energy, transmission, and financing.

Key Points: India-Bhutan Sign Power Trade Pacts, Strengthen Energy Ties

  • Signed tariff protocol for 1020MW Punatsangchhu-II project
  • Inked framework for reactive energy accounting to stabilize grid
  • Ministers discussed future renewable energy & regional trade
  • Established new institutional mechanism for regular coordination
  • Visit underscores deepening bilateral ties and energy security
2 min read

India, Bhutan sign key pacts to boost bilateral power trade

India and Bhutan sign tariff and grid stability agreements to streamline bilateral power trade and enhance hydropower cooperation during Manohar Lal's visit.

"reaffirmed the shared commitment... to advance cooperation in clean energy and sustainable development - Joint Statement"

New Delhi, April 9

India and Bhutan on Wednesday signed the tariff protocol of Punatsangchhu-II Hydroelectric Project, and the Methodology for Reactive Energy Accounting of the Reactive Power Exchange to streamline bilateral power trade, according to the Ministry of Power.

The two agreements were signed at a meeting between India's Power Minister Manohar Lal and Bhutan's Minister for Energy & Natural Resources Lyonpo Gem Tshering in Thimphu.

The 1020 MW Punatsangchhu-II Hydroelectric Project was jointly inaugurated by Prime Minister Narendra Modi and Bhutan's King Jigme Khesar Namgyel Wangchuck on November 11, 2025 and commenced export of surplus power to India from September 19, 2025, at a mutually agreed starting tariff. The signing of the tariff protocol marks another step in mutually beneficial hydropower cooperation between the two countries.

The second agreement on Methodology for Reactive Energy Accounting of the reactive power exchange is a technical framework aimed at enhancing grid stability, improving efficiency in cross-border electricity exchange, and streamlining bilateral power trade.

Manohar Lal arrived in Bhutan on Wednesday for a four-day visit. His visit marks another important step in the deepening of India-Bhutan bilateral ties.

The Indian minister called on Bhutan Prime Minister Tshering Tobgay. During the meeting, the two leaders reaffirmed the shared commitment of the two nations to advance cooperation in clean energy and sustainable development, the statement said.

India and Bhutan share exemplary bilateral relations, characterised by mutual trust, understanding, and close cooperation across sectors. The visit underscores the shared vision of both countries to further strengthen collaboration in energy security and sustainable development.

Manohar Lal held discussions with Bhutan's Energy Minister that focused on strengthening ongoing cooperation in the hydropower sector and on future avenues in renewable energy and regional power trade.

Expanding the scope of cooperation in the power sector, India and Bhutan have established an enhanced bilateral institutional framework mechanism. This mechanism will enable regular review and coordination of ongoing and future initiatives between the two countries to further strengthen collaboration. Key areas of cooperation include non-hydro energy, cross-border transmission, project financing, capacity building, and institutional partnerships, the statement said.

The Indian minister's engagements during the visit are expected to pave the way for new avenues of collaboration, contributing to the continued prosperity and well-being of both nations, the statement added.

- IANS

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Reader Comments

P
Priya S
More power from Bhutan is always welcome, especially with summer approaching. Hope the streamlined trade means more stable grids and fewer power cuts in the eastern states. Good step for energy security.
R
Rohit P
While this is positive, I hope we are also investing aggressively in our own renewable capacity—solar, wind, and even nuclear. We cannot be overly dependent on imports, even from a friendly nation. Diversification is key.
M
Meera T
The focus on clean energy and sustainable development is commendable. Bhutan is a carbon-negative country, and we have much to learn from them in balancing development with environmental protection. This partnership goes beyond just commerce.
D
David E
As an expat working here, it's impressive to see India's strategic energy partnerships. Stable, clean power is fundamental for economic growth. The technical agreement on grid stability sounds like a smart, forward-looking move.
S
Siddharth J
Bhutan is our most reliable friend. This is how diplomacy should work—mutual benefit and deep trust. Hope the "institutional framework mechanism" ensures these projects are executed efficiently without delays. Jai Hind!

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