The two countries also signed a technical agreement designed to enhance grid stability, boost efficiency in electricity trade, and streamline bilateral cooperation.
India and Bhutan have signed the tariff protocol of the Punatsangchhu‑II Hydroelectric Project, marking another step in their mutually beneficial hydropower cooperation. The agreement was signed on Thursday during Union Power Minister Manohar Lal’s four‑day visit to the Himalayan nation.
The 1,020 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. Surplus power exports to India from the project had already begun on September 19 that year, at a mutually agreed starting tariff.
Alongside the tariff protocol, the two sides also signed the methodology for reactive energy accounting for cross‑border power exchange. This technical framework is aimed at enhancing grid stability, improving efficiency in electricity trade, and streamlining bilateral cooperation.
India and Bhutan have established an enhanced bilateral institutional framework to strengthen collaboration in key areas, including non‑hydro energy, cross‑border transmission, project financing, capacity building, and institutional partnerships. This mechanism provides for regular review and coordination of current and future initiatives, further consolidating bilateral cooperation.
During his visit, Lal also called on the Bhutanese King to express appreciation for his continued guidance and leadership in advancing the unique and time‑tested friendship between the two countries. He briefed the King on the signing of the tariff protocol for the Punatsangchhu‑II Hydroelectric Project, underscoring its significance in the broader energy partnership.