India and Bhutan have inked key agreements to strengthen bilateral cooperation in the power sector during a recent visit of Manohar Lal, Union Minister of Power and Housing & Urban Affairs to Bhutan. One of these includes the tariff protocol for the 1,020 MW Punatsangchhu-II Hydroelectric Project. The project was inaugurated in November 2025 and began exporting surplus power to India from September 2025, at a mutually agreed tariff between India and Bhutan.
The second agreement is regarding the methodology for reactive energy accounting of the reactive power exchange. It is a technical framework aimed at enhancing grid stability, improving efficiency, and streamlining bilateral electricity trade.
