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India and Bhutan to enhance collaboration in hydropower sector

#Taxation & Finance News#Industrial#India
Last Updated : 6th Feb, 2026
Synopsis

India and Bhutan are advancing their collaboration in the hydropower sector, focusing on key projects like Punatsangchhu-I (1,200 MW) and Punatsangchhu-II (1,020 MW) as well as the Sankosh Hydropower Project. Discussions with Union Power Minister Manohar Lal included commercial optimisation, early commissioning timelines, and long-term transmission planning through 2040. The two nations also addressed smoother approval mechanisms for power scheduling, especially during Bhutan's lean months. This step reinforces their ongoing energy partnership, aimed at improving efficiency, supporting regional electricity trade, and meeting increasing power demands in both countries.

India and Bhutan are set to deepen cooperation in the power sector, according to an official statement shared earlier this week. A delegation from Bhutan held discussions with Union Power Minister Manohar Lal in New Delhi to explore ways to strengthen bilateral energy ties.


Bhutan's Minister of Energy and Natural Resources, Lyonpo Gem Tshering, met with Lal to discuss multiple hydropower projects and their commercial and operational aspects. Both sides examined strategies to optimise power output from the Punatsangchhu-II Hydroelectric Project, which has a capacity of 1,020 MW. They also highlighted the importance of commissioning the Punatsangchhu-I Hydroelectric Project, which can generate 1,200 MW, at the earliest.

Discussions further covered the future of the Sankosh Hydropower Project and long-term transmission infrastructure planning extending to 2040. Detailed consultations are underway to ensure smooth integration and efficient power scheduling. Special attention was given to streamlining approvals for scheduling electricity, particularly during months when Bhutan experiences lower hydropower generation.

This dialogue builds on the longstanding energy partnership between India and Bhutan, where India has historically supported Bhutan in developing hydropower resources that contribute significantly to its economy and regional electricity trade. Both countries reiterated the shared goal of maximising energy efficiency while meeting growing power demand in the region.

Source PTI



FAQ

Q1. What recent steps have India and Bhutan taken to strengthen cooperation in the hydropower sector?

India and Bhutan are advancing collaboration in the hydropower sector through high-level discussions between Bhutan's Energy Minister Lyonpo Gem Tshering and India's Union Power Minister Manohar Lal. The talks focused on optimising commercial operations, accelerating project commissioning, and long-term transmission planning through 2040. Both nations are also exploring smoother approval mechanisms for electricity scheduling, particularly during Bhutan's lean hydropower months, to improve efficiency and regional electricity trade.

Q2. Which hydropower projects were highlighted during the discussions?

Key projects discussed include Punatsangchhu-I (1,200 MW), Punatsangchhu-II (1,020 MW), and the Sankosh Hydropower Project. Both countries reviewed strategies for commercial optimisation and early commissioning timelines, aiming to maximise output, enhance reliability, and strengthen energy security for Bhutan and India.

Q3. What long-term infrastructure plans were addressed?

The discussions included long-term transmission planning through 2040 to ensure smooth integration of Bhutan's hydropower into regional grids. The focus was on creating efficient scheduling frameworks and transmission networks that can accommodate peak and lean generation periods while supporting cross-border electricity trade.

Q4. How does this collaboration benefit both countries?

This step reinforces the ongoing energy partnership, helping Bhutan maximise hydropower efficiency and commercial returns while meeting India's growing electricity demand. Enhanced collaboration is expected to support regional electricity trade, ensure stable power supply, and strengthen economic ties between the two nations.

Q5. Why is smoother approval for electricity scheduling important?

Bhutan experiences months of lower hydropower generation, and smoother approval mechanisms for scheduling electricity will ensure that available power is efficiently allocated and transmitted. This reduces operational delays, avoids wastage, and stabilises regional power supply, particularly during lean hydropower periods.

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