- D1: India-Nepal agreements during Modi visit
- D2: Power Trade agreement (PTA) with Nepal
- D3: India-Bhutan: Hydropower sharing
- D4: Indian Intervention in Bhutan Politics
Happened in September 2014, after Prime Minister Narendra Modi came back from Nepal.
- Now any Nepali public or private entity can sell electricity to India.
- India wanted to setup a joint venture Company with Nepal- for trading electricity. But Nepali Government did not agree.
- India even offered to help developing Nepal’s hydro-electricity power but their political factions disagreed.
- Modi has earlier said- Nepal has immense hydropower and just be selling electricity to India, they can become a developed country(!)
|electricity power trade, cross-border transmission, inter-connection and grid-connectivity||Indian investment in Nepali power sector.|
|Power trade agreement||Power Development pact|
|Between respective Governments of Nepal and India||Between GMR India with Nepali Government to develop Karnali hydropower.|
|Signed with consensus of Maoists and other political factions of Nepal.||Nepali maoists don’t like this, not one bit so they’ve began protests.|
|Trade||India will remove quantitative restrictions on Nepalese products.|
Topic in news because during April 2014, India and Bhutan signed a new Inter-Governmental Agreement for hydro projects.
Sequence of Events
- 2006: India Bhutan signed agreement. India promised to develop 10,000 MW hydropower in Bhutan. Bhutan promised they’ll export surplus electricity to India by 2020.
|Chukha project||336 MW|
|Kurichu project||60 MW|
|Tala project||1020 MW|
|Kholongchu project||600 MW|
|Bunakha project||180 MW|
|Wangchu project||570 MW|
|Chamkarchu project||770 MW|
numbers not important but these are all “run of the river” type dam. They don’t store water in reservoirs, hence less problem of siltation and ecological damage.
- Bhutanese economy is based on agriculture, forestry and tourism. But major of GDP comes from construction and hydro-electricity.
- India is the only “importer” of Bhutanese Hydroelectricity.
- We also supply them Bhutan laborers, food imports and defense equipment.
- But relations turned sour during previous PM Jigme Thinley’s inclination towards China.
- 2008: China begins Border settlement talks with Bhutan.
- China asked Bhutan to give 250 sq.km from North Bhutan. And offered to give 500 sq.km area from China in return.
- But this smaller 250 sq.km area is in Chumbi valley- @tri-junction of Bhutan, India and China.
- If China sets up base here, they can easily penetrate India and cut off North Eastern India from rest of the country.
- Fortunately Bhutan government declined the offer.
- 2012: RIO+20 summit. Chinese leaders again made offer PM Jigme Thinley , he responded positively.
India alarmed, begins “teaching lesson” to Bhutan
- Until now we gave “Aid/donation” to Bhutan for building their Hydroplants. But now we stopped giving free aid. Only “loans” for Bhutan.
- Stopped kerosene and cooking gas subsidy.
- Subprime crisis=> declined tourists. GDP stagnates. No money to repay Indian loans.
- So far Bhutan PM completed only 3 Hydro project = not sufficient production to cover the costs.
- Cannot give any more subsidy on Kerosene and cooking gas =>Bhutanese juntaa protests. 2013 General election in Bhutan, they vote new Prime Minister Tshering Thogbay.
PM Tshering Thogbay visits India & promises “I’ll remain in my aukaat, will not take any decision against Indian security interests.” India is satisfied, and stops teaching lesson
- Announced Rs.500 crore economic aid. (aid=don’t have to repay loan principal / interest.)
- Restored subsidy on kerosene and cooking gas
- Promised additional HEP projects with help of Indian public sector undertaking.
Fast forward to April 2014: we signed agreement for Chukha, Kurichu, Tala projects.
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