New Delhi, April 9 India and Bhutan on Wednesday signed the tariff protocol of Punatsangchhu-II Hydroelectric Project, and the Methodology for Reactive Energy Accounting of the Reactive Power Exchange to streamline bilateral power trade, according to the Ministry of Power.
The two agreements were signed at a meeting between India’s Power Minister Manohar Lal and Bhutan’s Minister for Energy & Natural Resources Lyonpo Gem Tshering in Thimphu.
The 1020 MW Punatsangchhu-II Hydroelectric Project was jointly inaugurated by Prime Minister Narendra Modi and Bhutan's King Jigme Khesar Namgyel Wangchuck on November 11, 2025 and commenced export of surplus power to India from September 19, 2025, at a mutually agreed starting tariff. The signing of the tariff protocol marks another step in mutually beneficial hydropower cooperation between the two countries.
The second agreement on Methodology for Reactive Energy Accounting of the reactive power exchange is a technical framework aimed at enhancing grid stability, improving efficiency in cross-border electricity exchange, and streamlining bilateral power trade.
Manohar Lal arrived in Bhutan on Wednesday for a four-day visit. His visit marks another important step in the deepening of India–Bhutan bilateral ties.
The Indian minister called on Bhutan Prime Minister Tshering Tobgay. During the meeting, the two leaders reaffirmed the shared commitment of the two nations to advance cooperation in clean energy and sustainable development, the statement said.
India and Bhutan share exemplary bilateral relations, characterised by mutual trust, understanding, and close cooperation across sectors. The visit underscores the shared vision of both countries to further strengthen collaboration in energy security and sustainable development.
Manohar Lal held discussions with Bhutan’s Energy Minister that focused on strengthening ongoing cooperation in the hydropower sector and on future avenues in renewable energy and regional power trade.
Expanding the scope of cooperation in the power sector, India and Bhutan have established an enhanced bilateral institutional framework mechanism. This mechanism will enable regular review and coordination of ongoing and future initiatives between the two countries to further strengthen collaboration. Key areas of cooperation include non-hydro energy, cross-border transmission, project financing, capacity building, and institutional partnerships, the statement said.
The Indian minister’s engagements during the visit are expected to pave the way for new avenues of collaboration, contributing to the continued prosperity and well-being of both nations, the statement added.
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