Bhutan: Delhi accelerates energy and infrastructure projects to curb Beijing's advance in the Himalayas

Indian Prime Minister Narendra Modi's visit to Thimphu marks a new chapter in Indo-Chinese strategic competition. New Delhi has announced a 40 billion rupee credit line and inaugurated the Punatsangchhu-II hydroelectric power station, intended to strengthen energy interdependence between the two countries. India's moves come as China intensifies border negotiations with Bhutan, in a process that could redefine highly sensitive areas such as the Doklam, Pasamlung and Jakarlung plateaus.

New Delhi (AsiaNews) - India is taking a new step to consolidate its strategic presence in Bhutan, at a time when China is also stepping up its attempts to get closer to the Buddhist kingdom. Indian Prime Minister Narendra Modi's recent visit to Thimphu, the capital of Bhutan, led to the announcement of new financial aid and the inauguration of a major hydroelectric project.

Modi also announced a credit line worth 40 billion rupees, approximately £455 million, to finance energy projects, a pillar of cooperation between the two countries. India considers the stability of the kingdom a key factor for its own security, especially in relation to Beijing, which has intensified contacts with Thimphu and advanced negotiations on borders.

During his visit, the Indian Prime Minister took part in celebrations for the birthday of the father of the current ruler, Jigme Khesar Namgyel Wangchuck. Modi described the collaboration with Bhutan as “a model for the entire region”, highlighting how trust and shared goals have enabled large-scale projects to be carried out over the years.

The Indian Prime Minister also received the “Order of the Druk Gyalpo”, Bhutan's highest civilian honour, becoming the first foreign head of government to receive the title. This is in recognition of his contribution to strengthening bilateral relations: “Honoured to receive the 'Order of the Druk Gyalpo”. I dedicate it to the 1.4 billion Indians," the Prime Minister wrote on Twitter immediately after the ceremony.

The most significant moment of the visit was the inauguration of the Punatsangchhu-II hydroelectric power plant, a 1,020-megawatt facility financed by Delhi and destined to become one of Bhutan's main sources of energy.

With this project, the country's total production capacity will reach around 3,000 megawatts, an increase of nearly 40%. The excess electricity produced (domestic demand is around 1,000 MW) will be sold to India, thereby strengthening bilateral trade and providing Bhutan with greater liquidity.

In addition to government agreements, cooperation is also expanding in the private sector. Several large Indian energy companies, including Tata Power, Adani Group and Reliance Power, have signed agreements with Druk Green Power Corporation, the Bhutanese public body responsible for managing the hydroelectric sector.

The aim is to develop new plants, increasing Bhutan's energy capacity and availability for the Indian market.

However, Modi's visit is not solely economic in nature. In recent years, China has intensified diplomatic contacts with Bhutan and accelerated negotiations on border demarcation. Beijing and Thimphu, which do not have formal diplomatic relations, signed a memorandum of understanding in 2021 for a three-stage process (negotiation, deliberation and demarcation) to formally establish the border between the two countries.

The areas under discussion include the disputed regions of Doklam, Pasamlung and Jakarlung. The Doklam plateau is particularly sensitive for New Delhi: any agreement that would give China more leeway would bring Beijing closer to the Siliguri Corridor, the narrow strip of territory that connects India's north-eastern territories to the rest of the country.

The investments announced by Modi therefore also take on strategic value. India aims to preserve its historic influence over the Himalayan kingdom and to avert a possible Bhutanese opening towards Beijing, which could alter the security balance in the entire region. Economic aid, infrastructure projects and renewed political commitment therefore aim to reaffirm India's role as Bhutan's privileged partner at a time of growing geopolitical competition in the Himalayas.