India–Bhutan Strengthen Energy Partnership: New Hydropower, Clean Energy and Power Trade Agreements Signed During Ministerial Visit

India’s Union Minister for Power and Housing & Urban Affairs, Manohar Lal Khattar, arrived in Bhutan for a four-day official visit, signaling renewed momentum in the longstanding and strategic partnership between the two nations.

The visit reinforces the deep-rooted bilateral ties between India and Bhutan, built on mutual trust, shared values, and sustained cooperation across critical sectors, particularly energy and sustainable development.

During his visit, the Minister called on Bhutan’s Prime Minister, Tshering Tobgay. Both leaders reaffirmed their commitment to expanding collaboration in clean energy and advancing joint sustainability goals, underscoring a shared vision for a resilient and low-carbon future.

In a separate meeting with Gem Tshering, Bhutan’s Minister for Energy and Natural Resources, discussions centered on strengthening ongoing hydropower cooperation and exploring new opportunities in renewable energy and regional power trade.

A key outcome of the visit was the establishment of an enhanced bilateral institutional framework mechanism. This initiative is designed to facilitate structured coordination and regular review of joint projects, while broadening cooperation into emerging areas such as non-hydro renewable energy, cross-border transmission infrastructure, project financing, and capacity building.

Further cementing the partnership, both sides signed two significant agreements:

• A Tariff Protocol for the 1020 MW Punatsangchhu-II Hydroelectric Project, marking progress in hydropower collaboration. The project was jointly inaugurated by Narendra Modi and Jigme Khesar Namgyel Wangchuck on November 11, 2025, and began exporting surplus power to India in September 2025 under a mutually agreed tariff structure.
• A Methodology for Reactive Energy Accounting, a technical framework aimed at enhancing grid stability, improving efficiency in cross-border electricity exchange, and streamlining bilateral power trade mechanisms.

The outcomes of the visit are expected to unlock new avenues for cooperation, further strengthening India–Bhutan relations while contributing to regional energy security and sustainable growth.