Indian Economy News

India and Bhutan to Strengthen Cooperation in the Power Sector

India and Bhutan reaffirmed their long-standing partnership in the power sector, with senior-level talks held in New Delhi on February 3, 2026, focusing on ways to enhance cooperation in hydropower and transmission interconnection. The talks between Union Minister for Power and Housing & Urban Affairs, Mr. Manohar Lal, and Bhutan’s Minister of Energy and Natural Resources, Mr. Lyonpo Gem Tshering, reviewed progress on major hydro projects that form the bedrock of their partnership. The focus was on the Punatsangchhu-II Hydroelectric Project (1020 MW) and the early start of the Punatsangchhu-I Hydroelectric Project (1200 MW), both critical to the energy requirements and a reliable power supply in Bhutan and the region. These projects, which have their roots in cooperation since 1961 and were further strengthened by the 2006 agreement on hydropower cooperation, continue to be at the heart of their strategic energy partnership.
Going beyond the project-level talks, India and Bhutan also considered planning for transmission infrastructure until 2040, with extensive consultations in progress to ensure smooth cross-border power supplies into the next decade. A major agenda item was facilitating power schedule approvals during the lean periods in Bhutan, to enable smooth energy flows and optimal utilization of hydropower resources. The ministers expressed appreciation for the deep friendship that exists between the two countries and reaffirmed their commitment to strengthening cooperation to enhance energy security and help advance regional development and economic integration. 

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