India & Bhutan sign pact to boost bilateral power trade
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New Delhi: 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.
