India and Bhutan have signed agreements to boost their power trade cooperation. The tariff protocol of Punatsangchhu-II Hydroelectric Project and the Methodology for Reactive Energy Accounting were signed to streamline bilateral power trade. These agreements were inked during a meeting between India’s Power Minister Manohar Lal and Bhutan’s Minister for Energy & Natural Resources Lyonpo Gem Tshering in Thimphu.
The Punatsangchhu-II Hydroelectric Project, with a capacity of 1020 MW, was jointly inaugurated by Prime Minister Narendra Modi and Bhutan’s King Jigme Khesar Namgyel Wangchuck on November 11, 2025. It started exporting surplus power to India from September 19, 2025, at an agreed tariff. The signing of the tariff protocol signifies a significant step in the mutually beneficial hydropower cooperation between the two nations.
Another agreement on the Methodology for Reactive Energy Accounting of the reactive power exchange was also signed. This technical framework aims to enhance grid stability, improve efficiency in cross-border electricity exchange, and streamline bilateral power trade. The visit of Manohar Lal to Bhutan for a four-day visit marks a crucial milestone in strengthening India–Bhutan bilateral ties.
During the visit, Manohar Lal met with Bhutan Prime Minister Tshering Tobgay, where both leaders reiterated their commitment to advancing cooperation in clean energy and sustainable development. The visit underscores the shared vision of both countries to further enhance collaboration in energy security and sustainable development.
India and Bhutan enjoy strong bilateral relations based on mutual trust, understanding, and close cooperation across various sectors. The visit highlights the joint commitment of both nations to bolster cooperation in energy security and sustainable development. Discussions between Manohar Lal and Bhutan’s Energy Minister focused on enhancing ongoing cooperation in the hydropower sector and exploring future opportunities in renewable energy and regional power trade.
To expand cooperation in the power sector, India and Bhutan have established an enhanced bilateral institutional framework mechanism. This mechanism will facilitate regular review and coordination of current and future initiatives to strengthen collaboration. Key areas of cooperation include non-hydro energy, cross-border transmission, project financing, capacity building, and institutional partnerships.
The engagements of the Indian minister during the visit are expected to open up new avenues of collaboration, contributing to the continued prosperity and well-being of both nations.
