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Indo-Bhutan Hydro Relations: Between Economic Well Being And Environmental Sustainability – Analysis


One strand of the debate on non-traditional security issues is that future wars will be fought over water. History stands evident of the fact that since the beginning of human civilization man has been settling beside rivers and many of the mighty wars have been fought for water. Water being one of the essential preconditions for life on the earth has been one of the earliest and most pervasive sources of human conflict. There is absolutely no role of politics as long as rivers flow freely without bothering about political boundaries of nation states. But, as such a phenomenon is rare to happen; complications on river water sharing are obvious to stay between countries.

The issue of river water sharing is far more contentious in South Asia given the immense geographical proximity of the countries. South Asia as a region shares two of the major river systems of the world, the Indus system and the Ganga-Brahmaputra system. The countries in this part of the world have been witnessing constant antagonism amongst each other on issues relating to river water sharing. This in turn has made way for several agreements on water sharing among the states which have proved to be successful as well as unsuccessful at various occasions.

The Curious Case of Bhutan

Bhutan is a nation rich in water resources with per capita availability of 75,000 cubic meters per year which is one of the highest in the region. The case of Bhutan is curious, given the fact that the nation is entangled in an uncomfortable paradox: a situation of water scarcity amidst the highest endowment of water resources in the region.i

The four main rivers in Bhutan are:

i. Manas or Gongri River
ii. Mo Chu or Sankosh River
iii. Wang Chu or Raidak River
iv. Amo Chu or Torsa River

The major rivers in Bhutan flow in the north-south direction and carry an estimated potential of 30,000 MW of hydro-power.ii A World Bank assisted Master Plan shows that the four major rivers alone have a potential of generating around 20,000 MW of hydroelectricity.iii Given the marginal size of its domestic economy, Bhutan has been mostly unable to exploit much of its hydropower potential on its own. Thus, Bhutan has been looking up to assistance and aid from foreign countries and agencies for its hydro-projects. India has been the most stable and trusted partner amongst all. With the external aid and assistance, Bhutan has been successful in producing surplus hydro-power which in turn is exported to the supporting states, mostly India. The residential sector in Bhutan consumes about 48-50 percent of the energy produced and the surplus is rightly available for export. Since the country’s electricity generation is significantly higher than the maximum domestic demand, Bhutan is a net exporter (mostly to India), thus making hydro-power a ‘win-win’ condition for both sides.

Indo-Bhutan Relations: Water as a Catalyst for Ties

Indian Prime Minister, Narendra Modi’s strategy of taking up Bhutan as the first destination of foreign visit after taking charge of the new government was greatly welcomed by Bhutan. The move makes it apparent that India acknowledges its solid friendship with Bhutan. It has infused fresh blood to the already existing arteries between the two countries. Cutting across regime lines on both sides, the relationship between the two countries have been all weather. In absence of any strategic divergence between the two nations and given the interdependence between the two sides at economic levels, the bonding is expected to strengthen further in coming days.

Unlike with other neighbors, India has mostly had a peaceful and stress-free overall relationship with Bhutan. India’s investments in hydropower projects in Bhutan since 1960s have undoubtedly been an arena providing impetus to the cordial bonding. Indo-Bhutan hydropower cooperation began in 1961 with the signing of the Jaldhaka agreement. The Jaldhaka project is situated on the Indian side of Indo-Bhutan border in West Bengal. The major part of power produced at Jaldhaka hydropower plant was exported to the southern part of Bhutan. Thus, the benefit of cross-border energy trade has encouraged Bhutan to seek Indian investments in setting up hydropower plants. India has since then been reciprocating by constantly aiding and assisting hydropower projects in Bhutan.

Both the countries have inked several power (electricity) sharing agreements till date. Although India has had bitter relationships with Bangladesh, Nepal and Pakistan at some point of time in terms of river water sharing, but, in case of Bhutan the success of one project has made way for other projects based on confidence, economic viability and shared benefits.

Two of the major hydro-power projects in Bhutan

Chukha Hydropower Project:

A landmark development in the history of Indo-Bhutan hydro-relations came in 1987 with the commissioning of the 336 MW Chukha Hydropower Project. Bhutan‟s first mega power project, Chukha, was fully funded by the Government of India with 60 percent grant and 40 percent loan at the interest rate of 5 percent payable over a period of 15 years after commissioning. The project was inaugurated by the then Indian president R.Venketaraman. The project generates approximately 1,800 MU every year and most of the generated energy (around 75%) is exported to India.

Tala Hydroelectric Project:

The resounding success and economic wellbeing brought by the Chukha project made way for newer projects. The 1,020 MW Tala hydroelectric Project is the biggest joint project between India and Bhutan so far. Tala was wholly financed by the Government of India, 60 per cent by grant and 40 per cent by loan. Three 440kV transmission lines stress to the Indian border since the power is being entirely supplied to India.

Other Projects under Construction

In his last visit to Bhutan, Prime Minister Narendra Modi laid the foundation stone of the 600 MW Kholongchu hydro-electric project, a joint venture between India and Bhutan. The 600 MW Kholongchu hydro project, to be developed by SJVN along with Druk Green Power Corp, is estimated to cost more than Rs 3,868 crores to be contributed in the ratio of 50:50 by both the JV partners. Three more Hydro Electric Projects- Punatsangchu I (1200 MW), Punatsangchu II (1020 MW) and Mangdechu (720 MW) are under construction. They are scheduled to be commissioned in 2017-18. iv

Power deficit India finds her interests perfectly fulfilled by leaning on Bhutan and Bhutan in turn finds an opportunity to optimize its national income through power exports to India. This win-win situation for both sides makes the relationship between the two nations strong and long lasting. A striking aspect of Bhutan’s power generation is the very low construction cost per kilowatt. The minimal cost of production as compared to producing electricity domestically has been pushing India to indulge even more with Bhutan.

Dilemma of Dams

The optimism of the hydro-cooperation and construction of large multipurpose projects seem to be very win-win for New Delhi and Bhutan. But, there has been a considerable amount of voice coming up from the environmentalists who critique the viability of big dams. The issue has been raised frequently in the northeastern part of India which shares direct land border with Bhutan. The construction of mega hydropower projects in Bhutan would have adverse impact on the lives and livelihood of the people living in downstream areas in Assam and other states in the northeastern parts of India. Thus, there has been this dilemma of having or not having big dams. “Built on the logic of “development”, big dams have wreaked havoc on indigenous communities in Assam and Arunachal Pradesh with regular flooding. By pursuing predatory development the central and state governments are equally culpable of visiting disaster on the region”.v

In addition to the risk of devastating floods and earthquakes, the risk of drop in soil productivity and depth and probable serious changes to Assam’s floodplain agriculture needs to be considered. The Baksa and Barpeta districts of Assam witnessed flood havoc in August 2004 due to rise of water level in the Beki, a distributary of the Manas River. The rise in Beki was due to release of water from the reservoir of Kurichhu Hydropower Project. The dam of Kurichhu Project is located merely about 100kms upstream from the Manas National Park, Assam thus making the local ecology and environment much more vulnerable. For a number of years, unprecedented floods have ravaged the Barpeta district of Assam in the west with rivers descending from Bhutan overflowing their banks.

Such environmental concerns regarding large hydro projects involving construction of big dams and reservoirs in a way impede the bonding and cooperation between the two nations. The need of the hour is effective impact assessment of such projects and necessary environmental studies. The thirst for growth should in no ways contradict the wellbeing and sustainability of the environment and the human race at large.

*Uddipta Ranjan Boruah, Student of International Relations, South Asian University, New Delhi

i. Gyamtsho, T., 2013. Watershed Management Policies and Programs in Bhutan: Empowering the Powerless. In A. Prakash, S. Singh, C.G. Goodrich & S. Janakarajan, eds. Water Resources Policies in South Asia. New Delhi: Routledge.
ii. IDSA, 2010. WATER SECURITY FOR INDIA: The External Dynamics. IDSA Task Force Report. New Delhi: IDSA Institute for Defence Studies and Analyses.
iii. Serchan, B.M., 2000. Hydro-Power. Nepali Times, 30 August – 5 September. p.3.
iv. PTI, 16 June 2014. The Economic Times. [Online] Available at: [Accessed 19 April 2015].
v. Gohain, H., 2008. Big Dams, Big Floods: On Predatory Development. Economic and Political Weekly, July 26- August 1. pp.19-21 available at (

Uddipta Ranjan Boruah

Uddipta Ranjan Boruah

Uddipta Ranjan Boruah is a student of International Relations, South Asian University, New Delhi.

One thought on “Indo-Bhutan Hydro Relations: Between Economic Well Being And Environmental Sustainability – Analysis

  • Avatar
    August 3, 2015 at 4:58 am

    While your stories paint a picture of harmonious cooperation, maybe its time to understand what is really happening. India , with the help of some of our so called patriots, is wooing the country with overinflated results, using their sub standard companies to do the works and increasing our debts to a level from which we may never recover. That way you deprive a very small neighbour of its only chance at a stable economy. So much for our big brother


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