At a glance
Bhutan is a landlocked Himalayan kingdom between India and China. It became a constitutional monarchy in 2008 and is known for measuring progress by Gross National Happiness. Its fast rivers make hydropower its biggest export, almost all of it sold to India, and India has funded or co-built most of its large power stations.
Key facts
- Capital: Thimphu
- Currency: ngultrum, pegged at par to the Indian rupee (the rupee is also accepted)
- Head of state: King Jigme Khesar Namgyel Wangchuck (fifth Druk Gyalpo, crowned 2008)
- Prime Minister: Tshering Tobgay (since January 2024)
- Parliament: National Council (upper house) and National Assembly
- Treaty with India: Treaty of Friendship, 1949, revised in 2007
- State power utility: Druk Green Power Corporation (DGPC)
- Bordering Indian states: Sikkim, West Bengal, Assam, Arunachal Pradesh
- New project: Gelephu Mindfulness City, a special economic hub near the Assam border
How it works
India–Bhutan hydropower uses three models: government-to-government projects (India funds through grant plus loan and buys surplus power), joint ventures between Indian public sector firms and DGPC, and, more recently, partnerships with Indian private companies.
| Project | Capacity | Status / note |
|---|---|---|
| Chukha | 336 MW | First major India-aided project (late 1980s) |
| Kurichhu | 60 MW | Commissioned early 2000s |
| Tala | 1,020 MW | Commissioned 2006–07 |
| Mangdechhu | 720 MW | Commissioned 2019 |
| Punatsangchhu-II | 1,020 MW | Completed 2025; inaugurated November 2025 by PM Modi and the King |
| Punatsangchhu-I | 1,200 MW | Under construction |
| Wangchhu | 570 MW | Agreed with Adani Power, September 2025 |
| Chamkharchhu-I | 770 MW | DGPC–Adani Power agreement, October 2026 |
Punatsangchhu-II was fully funded by India, 30% as grant and 70% as loan, and is expected to raise Bhutan's generating capacity by about 40%.
Timeline
- 1949: Treaty of Friendship with India
- 2007: Treaty revised; Bhutan no longer bound to be "guided" by India in foreign affairs
- 2008: Constitutional monarchy; first elected government
- 2019: Mangdechhu project inaugurated
- 2025: Punatsangchhu-II inaugurated (November)
Recent developments
- 06 Oct 2026: Adani Power and DGPC signed a shareholders' agreement for the 770 MW Chamkharchhu-I project: 51% DGPC, 49% Adani Power, on a 30-year build-own-operate-transfer (BOOT) concession. Construction is expected to start in the first half of 2027.
Exam traps
- Capital is Thimphu; Paro has the international airport.
- The ngultrum is pegged at par (1:1) to the rupee.
- The 1949 treaty was revised in 2007, not 2017.
- Tala and Punatsangchhu-II are both 1,020 MW; Punatsangchhu-I is the larger 1,200 MW.
- Bhutan does not border Nepal; Sikkim separates them.
Quick check
- Q: What is Bhutan's currency? A: The ngultrum, pegged to the rupee.
- Q: Which Bhutanese company is the partner in its big hydro projects? A: Druk Green Power Corporation (DGPC).
- Q: What is the capacity of the Chamkharchhu-I project? A: 770 MW.
Sources
- https://indembthimphu.gov.in/pages/Mzgz
- https://www.tribuneindia.com/news/world/pm-modi-bhutan-king-inaugurate-punatsangchhu-ii-hydropower-project-marking-new-milestone-in-bilateral-energy-partnership
- https://gulfnews.com/business/energy/1020-mw-punatsangchuu-ii-hydroelectric-project-to-enhance-bhutan-s-power-generation-capacity-by-40-mea-1.500342629
- https://www.mea.gov.in/
In the news
Every time this topic has appeared in our current affairs, newest first:
- Week of 1–7 October 2026Adani Power and Bhutan's DGPC sign up for the 770 MW Chamkharchhu-I hydro project