India Bhutan Hydropower Project

India and Bhutan have solidified their partnership with an agreement for the 600 MW Kholongchhu hydropower project, marking their first joint venture in this sector. Located in the Trashiyangtse district of eastern Bhutan, a less developed region, the project is slated for completion in the latter half of 2025. Sutlej Jal Vidyut Nigam (SJVN), an Indian public sector undertaking from Himachal Pradesh, and Bhutan's Druk Green Power Corporation are the joint venture partners.

The Kholongchhu project is part of a broader 2014 agreement to develop 2120 MW of hydroelectric capacity through joint ventures, including the 180 MW Bunakha, 570 MW Wangchhu, and 770 MW Chamkharchhu projects. India has previously constructed four hydropower projects in Bhutan, totaling 2100 MW: the 336 MW Chukha, 60 MW Kurichhu, 1020 MW Tala, and 720 MW Mangdechhu projects. This development occurs against the backdrop of China's recent territorial claims in Bhutan, specifically near Tawang in Arunachal Pradesh, bordering China. The claimed territory falls within the Sakteng Wildlife Sanctuary in eastern Bhutan, and the Kholongchhu project's location offers potential access routes to Tawang.

India and Bhutan's Deepening Hydropower Cooperation: The Kholongchhu Project and its Geopolitical Context

The Kholongchhu project represents a significant milestone in the enduring partnership between India and Bhutan, a relationship characterized by mutual trust, economic interdependence, and shared strategic interests. This project is not merely an isolated instance of cooperation; it is deeply embedded in a history of successful collaborations, particularly in the hydropower sector, which has been a cornerstone of Bhutan's economic development and a vital source of energy for India. However, the evolving geopolitical landscape, marked by China's increasing assertiveness and territorial ambitions, adds a new layer of complexity to this partnership, underscoring the strategic importance of India's engagement with Bhutan.

A Legacy of Hydropower Cooperation

The history of India-Bhutan hydropower cooperation stretches back several decades, with India playing a pivotal role in assisting Bhutan in harnessing its immense hydropower potential. Bhutan, a landlocked Himalayan kingdom, possesses abundant water resources due to its mountainous terrain and heavy rainfall. Recognizing this potential, India has been instrumental in developing Bhutan's hydropower sector, providing technical expertise, financial assistance, and a guaranteed market for the electricity generated.

The Chukha Hydel Project, commissioned in 1986, was the first major hydropower project undertaken by India and Bhutan. With a capacity of 336 MW, Chukha became a symbol of the successful partnership between the two countries. It not only provided electricity to Bhutan but also generated significant revenue for the Bhutanese government through exports to India. This project set the stage for future collaborations in the hydropower sector.

Following the success of Chukha, India and Bhutan jointly developed several other hydropower projects, including the Kurichhu (60 MW), Tala (1020 MW), and Mangdechhu (720 MW) projects. These projects have collectively contributed significantly to Bhutan's economic growth, enabling the country to finance its development programs and improve the living standards of its citizens. Hydropower revenues account for a substantial portion of Bhutan's GDP, making India's support in this sector crucial for Bhutan's economic stability.

The Tala Hydropower Project, in particular, stands out as one of the largest and most successful examples of India-Bhutan cooperation. Commissioned in 2006, the 1020 MW Tala project is a run-of-the-river scheme that utilizes the waters of the Wangchhu River. The project has not only boosted Bhutan's electricity generation capacity but has also contributed to India's energy security by supplying power to the eastern grid.

The Mangdechhu project, commissioned in 2019, further solidified the India-Bhutan partnership in the hydropower sector. This project, with a capacity of 720 MW, is another example of a successful collaboration that has benefited both countries. The electricity generated by Mangdechhu is exported to India, contributing to India's renewable energy goals and providing a reliable source of revenue for Bhutan.

These projects have not only provided economic benefits but have also fostered a strong bond of friendship and trust between India and Bhutan. The cooperation in the hydropower sector has been a model of mutually beneficial development, demonstrating how two countries can work together to achieve shared goals.

The Kholongchhu Project: A New Chapter in Hydropower Cooperation

The Kholongchhu project represents a new chapter in the India-Bhutan hydropower partnership, as it is the first project to be undertaken under a joint venture model. This model signifies a deeper level of collaboration, with both countries sharing the risks and rewards of the project. The joint venture partners, Sutlej Jal Vidyut Nigam (SJVN) from India and Druk Green Power Corporation from Bhutan, bring their respective expertise and resources to the project.

SJVN, a public sector undertaking of the Government of India, has extensive experience in developing and operating hydropower projects. The company has a proven track record of successfully executing large-scale projects, and its involvement in the Kholongchhu project ensures that the project will be implemented efficiently and effectively.

Druk Green Power Corporation, on the other hand, is the primary hydropower company in Bhutan, responsible for developing and operating the country's hydropower assets. The company has a deep understanding of the local conditions and the regulatory environment, which is crucial for the successful implementation of the Kholongchhu project.

The Kholongchhu project, located in the Trashiyangtse district of eastern Bhutan, is expected to be completed in the second half of 2025. With a capacity of 600 MW, the project will significantly boost Bhutan's electricity generation capacity and contribute to its economic growth. The project is also expected to create employment opportunities for the local population, further benefiting the region.

The Kholongchhu project is one of four additional projects agreed upon in 2014 for the development of hydroelectric projects with a total capacity of 2120 MW under a joint venture model. The other three projects are the 180 MW Bunakha, 570 MW Wangchhu, and 770 MW Chamkharchhu. While progress on these other projects has been slower than anticipated, the signing of the agreement for the Kholongchhu project signals a renewed commitment to expanding hydropower cooperation between India and Bhutan.

The Significance of Hydropower for Bhutan's Economy

Hydropower is the mainstay of Bhutan's economy, contributing significantly to its GDP and export earnings. The country's abundant water resources and mountainous terrain make it ideal for hydropower development. Bhutan has the potential to generate over 30,000 MW of hydropower, but only a fraction of this potential has been tapped so far.

The revenue generated from hydropower exports to India is crucial for Bhutan's economic stability. It allows the Bhutanese government to finance its development programs, improve its infrastructure, and provide essential services to its citizens. Hydropower also contributes to Bhutan's energy security, reducing its dependence on imported fossil fuels.

Bhutan's reliance on hydropower, however, also makes its economy vulnerable to fluctuations in rainfall and water availability. Climate change, in particular, poses a significant threat to Bhutan's hydropower sector, as it could lead to changes in rainfall patterns and reduced water flows. Diversifying Bhutan's economy and developing alternative sources of energy are therefore crucial for ensuring its long-term economic sustainability.

India's Strategic Interests in Bhutan: Countering China's Influence

India's engagement with Bhutan is not solely driven by economic considerations; it is also rooted in strategic interests. Bhutan occupies a strategically important location, bordering India to the south and China to the north. India views Bhutan as a buffer state, and maintaining close ties with Bhutan is crucial for India's security.

China's growing assertiveness in the region has raised concerns in India about its strategic influence in Bhutan. China has been actively seeking to expand its economic and political ties with Bhutan, offering financial assistance and investment opportunities. India views these efforts as an attempt to undermine its influence in Bhutan and to gain a strategic foothold in the region.

India's hydropower cooperation with Bhutan is therefore not only an economic partnership but also a strategic tool for countering China's influence. By providing financial assistance and technical expertise for hydropower development, India is strengthening its ties with Bhutan and demonstrating its commitment to supporting Bhutan's economic development. This helps to maintain Bhutan's dependence on India and to prevent it from becoming too reliant on China.

The Kholongchhu project, in particular, has strategic significance due to its location in eastern Bhutan, near the border with Arunachal Pradesh. Arunachal Pradesh is a state in India that is claimed by China as part of South Tibet. The Kholongchhu project's location provides India with a strategic advantage in the region, allowing it to monitor Chinese activities and to respond quickly to any potential threats.

China's Territorial Claims in Bhutan: A New Challenge to Regional Stability

In recent years, China has stepped up its territorial claims in Bhutan, adding a new layer of complexity to the relationship between India, Bhutan, and China. China claims that certain areas in Bhutan, particularly in the western and central parts of the country, belong to China. These claims are based on historical arguments and are not recognized by Bhutan.

In 2020, China made a new territorial claim in Bhutan, asserting that the Sakteng Wildlife Sanctuary in eastern Bhutan is part of China. The Sakteng Wildlife Sanctuary is located near the border with Arunachal Pradesh, and China's claim is seen as an attempt to exert pressure on India and to undermine its position in the region.

Bhutan has strongly rejected China's territorial claims, asserting that the Sakteng Wildlife Sanctuary is an integral part of Bhutanese territory. India has also expressed its support for Bhutan's position, stating that it stands firmly with Bhutan in safeguarding its sovereignty and territorial integrity.

China's territorial claims in Bhutan have raised concerns about regional stability and the potential for conflict. The claims have also complicated the ongoing border negotiations between China and Bhutan, which have been taking place for several years. The border between China and Bhutan has not been formally demarcated, and the two countries have been engaged in negotiations to resolve their border dispute.

India is closely monitoring the situation and is taking steps to ensure that Bhutan's sovereignty and territorial integrity are protected. India has increased its military presence in the region and is working closely with Bhutan to strengthen its defense capabilities. India is also using diplomatic channels to engage with China and to urge it to respect Bhutan's sovereignty and territorial integrity.

The Sakteng Wildlife Sanctuary: A Region of Strategic and Environmental Importance

The Sakteng Wildlife Sanctuary, the area of Bhutan claimed by China, is a protected area in Bhutan known for its rich biodiversity and unique cultural heritage. The sanctuary is home to a variety of endangered species, including the red panda, the snow leopard, and the Himalayan black bear. It is also inhabited by the Brokpa people, a semi-nomadic community that has traditionally relied on yak herding and agriculture for their livelihoods.

The Sakteng Wildlife Sanctuary is not only important for its biodiversity and cultural heritage but also for its strategic location. The sanctuary is located near the border with Arunachal Pradesh, and its control would give China a strategic advantage in the region. The sanctuary also provides access to important mountain passes that could be used for military purposes.

China's claim to the Sakteng Wildlife Sanctuary is therefore not only a territorial dispute but also a strategic move aimed at undermining India's position in the region. India is determined to prevent China from gaining control of the sanctuary and is working closely with Bhutan to protect its sovereignty and territorial integrity.

India's "Neighborhood First" Policy and its Implications for Bhutan

India's "Neighborhood First" policy is a key element of its foreign policy, which prioritizes building strong relationships with its neighboring countries. This policy recognizes that India's security and prosperity are closely linked to the stability and prosperity of its neighbors. Bhutan is a key partner in India's "Neighborhood First" policy, and India has been actively working to strengthen its ties with Bhutan in various fields, including economic cooperation, security cooperation, and cultural exchange.

India's hydropower cooperation with Bhutan is a key example of its "Neighborhood First" policy in action. By providing financial assistance and technical expertise for hydropower development, India is helping Bhutan to achieve its economic development goals and to improve the living standards of its citizens. This, in turn, contributes to the stability and prosperity of the region, which is in India's strategic interest.

India also provides significant financial assistance to Bhutan in the form of grants and loans. This assistance is used to support Bhutan's development programs in various sectors, including infrastructure, education, and health. India also provides training and capacity building programs for Bhutanese officials, helping them to improve their skills and expertise.

In addition to economic cooperation, India and Bhutan also have close security cooperation. India provides military training and equipment to the Royal Bhutan Army, helping it to maintain its defense capabilities. The two countries also conduct joint military exercises to enhance their interoperability and to prepare for potential security threats.

India and Bhutan also have strong cultural ties, with a shared heritage and a common religion. India supports various cultural exchange programs with Bhutan, promoting people-to-people contact and fostering greater understanding between the two countries.

The India-Bhutan Treaty of Friendship: A Foundation for Enduring Relations

The India-Bhutan Treaty of Friendship, signed in 1949 and revised in 2007, forms the foundation of the enduring relationship between the two countries. The treaty provides a framework for cooperation in various fields, including defense, security, and economic development.

The treaty states that India will guide Bhutan in its foreign relations, but this provision has been interpreted differently over the years. Bhutan has gradually asserted its independence in foreign policy, and India has respected its right to make its own decisions.

The revised treaty of 2007 removed the provision that required Bhutan to seek India's guidance on foreign policy matters, reflecting Bhutan's growing confidence and independence. The revised treaty also reaffirmed the commitment of both countries to cooperate closely on matters of mutual interest, including security and economic development.

The India-Bhutan Treaty of Friendship is a testament to the strong bond of friendship and trust between the two countries. It provides a framework for cooperation that has benefited both countries and has contributed to the stability and prosperity of the region.

The Role of the Belt and Road Initiative (BRI) in the India-Bhutan Context

China's Belt and Road Initiative (BRI) is a massive infrastructure development project that aims to connect China with the rest of the world through a network of roads, railways, ports, and other infrastructure projects. The BRI has raised concerns in India, which views it as an attempt by China to expand its strategic influence and to encircle India.

Bhutan is the only country in South Asia that has not signed up for the BRI. This is due to Bhutan's close ties with India and its concerns about China's territorial claims. India has been urging Bhutan not to join the BRI, arguing that it could undermine Bhutan's sovereignty and territorial integrity.

China has been actively seeking to persuade Bhutan to join the BRI, offering financial assistance and investment opportunities. However, Bhutan has remained steadfast in its refusal to join the initiative, prioritizing its relationship with India and its concerns about China's territorial ambitions.

The BRI has added a new dimension to the India-Bhutan relationship, underscoring the strategic importance of India's engagement with Bhutan. India is determined to prevent China from gaining a foothold in Bhutan through the BRI and is working closely with Bhutan to strengthen its economic and security ties.

Environmental Considerations in Hydropower Development

While hydropower is a renewable source of energy, it is not without its environmental impacts. The construction of dams and reservoirs can lead to the displacement of communities, the destruction of forests, and the alteration of river ecosystems. It is therefore crucial to carefully consider the environmental impacts of hydropower projects and to take steps to mitigate these impacts.

India and Bhutan have been working together to ensure that hydropower projects are developed in an environmentally sustainable manner. Environmental impact assessments are conducted for all hydropower projects, and measures are taken to minimize the environmental impacts. These measures include the construction of fish ladders to allow fish to migrate upstream, the planting of trees to compensate for deforestation, and the implementation of water management plans to ensure that sufficient water is available for downstream users.

The Sakteng Wildlife Sanctuary, in particular, is an area of great environmental importance, and any development projects in the region must be carefully assessed to ensure that they do not harm the sanctuary's biodiversity and cultural heritage. China's territorial claims in the sanctuary have raised concerns about the potential for environmental damage, and India and Bhutan are working together to protect the sanctuary from any potential threats.

The Future of India-Bhutan Relations: Challenges and Opportunities

The future of India-Bhutan relations is bright, but there are also challenges that need to be addressed. The close ties between the two countries are based on mutual trust, economic interdependence, and shared strategic interests. However, China's growing assertiveness in the region and its territorial claims in Bhutan pose a potential threat to the stability of the relationship.

India and Bhutan need to continue to work together to strengthen their economic and security ties and to address the challenges posed by China. This includes expanding hydropower cooperation, increasing trade and investment, enhancing security cooperation, and promoting cultural exchange.

India also needs to continue to support Bhutan's economic development and to help it to achieve its development goals. This includes providing financial assistance, technical expertise, and training opportunities.

Bhutan, on the other hand, needs to continue to assert its independence in foreign policy and to make its own decisions in its best interests. This includes engaging with China in a constructive manner while safeguarding its sovereignty and territorial integrity.

The India-Bhutan relationship is a model of mutually beneficial cooperation, and it has the potential to become even stronger in the future. By working together to address the challenges and to seize the opportunities, India and Bhutan can ensure that their relationship continues to thrive and to contribute to the stability and prosperity of the region. The Kholongchhu project is a symbol of this enduring partnership, and it represents a new chapter in the India-Bhutan story.