Indo – Bhutan Hydropower Cooperation

Editorial Analysis for UPSC - Indo – Bhutan Hydropower Cooperation

Indo – Bhutan Hydropower Cooperation



  • India has been consistently supporting Bhutan in all aspects but has also supported significantly in the hydropower sector in the form of grants and technical aid.
  • Recent visit of India’s External Affairs Minister to Bhutan has given room to discussion on the bilateral ties.



  • The hydropower sector has been one of the important aspects in Indo Bhutan cooperation.
  • The Jaldhaka Project which was initiated in the year 1961 has been followed by numerous other agreements in the hydro power segment.
  • In one of the earlier protocols signed, India has committed to install 10.000MW by the year 2020.
  • Unfortunately there are some persisting issues which have come as hindrance I implementation of the hydropower projects.

Economic Factors:

  • Hydropower has been very important in Bhutan’s economic growth and has helped in its population attaining prosperity.
  • Amidst this there are growing concerns on its economic viability due to the steep rise in its public debt.
  • It has been estimated that out of Bhutan’s total external debt, 76% of it is due to the hydropower projects.
  • India has played a huge role in supporting Bhutan’s hydropower projects financially but recent changes in its financial mechanisms has been a bone of contention.
  • India from a 60:40 model has changed it to 30:70 ratio comprising of 30% grants and 70% from commercial debt.
  • Further due to delay in commissioning the projects the cost has been overshot by many folds.


Contention over Employment:

  • It is a matter of fact that the hydropower projects are labour intensive and has the potential to employ huge populations.
  • But the contention here is that the hydropower projects are not employing the local population and this has led to jobless growth.
  • The major reason being easy accessibility of both skilled and non-skilled workers, especially from India at lower labour costs.


Way Forward:

  • Bhutan which has adopted a model of Gross National Happiness stresses upon overall development, not just in economic sense.
  • The environmental and other social aspects needs to be kept in mind before going ahead of any new hydropower projects.
  • India which is seen as an all weather friend will paly an important role in Bhutan.


      Source The Hindu

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