MAINS Current Affairs includes India–Bhutan Cooperation on Hydropower Projects & US–Israel–Iran War

International

1. India–Bhutan Cooperation on Hydropower Projects

Context

India and Bhutan reaffirmed their longstanding partnership in hydropower and water resources management during a high-level Indian delegation visit to Bhutan.

Hydropower cooperation is the core pillar of India–Bhutan relations.

Evolution of India–Bhutan Hydropower Cooperation

1. Early Phase
   • 1961 – Jaldhaka Agreement
     • Project located in West Bengal (India).
     • Power exported mainly to southern Bhutan.

2. First Major Project

• Chukha Hydropower Project (336 MW) – Commissioned 1987
• Bhutan’s first mega hydropower project.
• Financing model:
  • 60% grant
  • 40% loan
  • Loan interest: 5%
  • Repayment: 15 years after commissioning

3. Expansion Phase

• Tala Hydroelectric Project (1,020 MW)
• Same 60:40 grant-loan model
• Became a major source of Bhutan’s export revenue.

Institutional Framework

2006 Agreement

• Agreement on Cooperation in Hydroelectric Power
• Formalised India–Bhutan hydropower partnership.

2014 Framework Agreement

• Inter-Governmental Agreement for Joint Venture (JV) Projects
• Developed through Public Sector Undertakings (PSUs).

Major Ongoing & Planned Projects

Punatsangchhu-I

• Capacity: 1,200 MW
• Delays due to geological issues at dam site.

Joint Venture Projects

• Kholongchhu Project – 600 MW
• Bunakha Project – 180 MW
• Wangchu Project – 570 MW
• Chamkharchu Project – 770 MW

Hydrological Strength of Bhutan

Bhutan has ideal geography for hydropower.

Major rivers:

• Punatsangchhu
• Wang Chhu / Raidak
• Drangme Chhu / Manas
• Amo Chhu / Sankosh

Characteristics:

• Snow-fed and monsoon-fed rivers
• Steep mountain gradients
• High hydropower potential

However, glacial lakes create Glacial Lake Outburst Flood (GLOF) risks.

Significance for India

1. Clean Energy & Climate Goals

• Hydropower imports support renewable energy targets.
• Complements solar and wind intermittency.

2. Grid Stability

• Hydropower provides flexible base-load electricity.
• Strengthens Northeast India’s power grid.

3. Reduced Coal Dependence

• Lower carbon emissions.
• Less reliance on thermal power and fossil fuel imports.

4. Strategic Importance

• Strengthens India’s influence in the Himalayan region.
• Counterbalances growing geopolitical competition in South Asia.

5. Bhutan’s Economy

• Hydropower exports to India are Bhutan’s largest revenue source. 

Challenges

Environmental Risks

• Climate change → GLOF threats
• Ecological impacts of large dams.

Hydrological Uncertainty

• Glacier melt and rainfall variability affect generation.

Local Concerns

• Land acquisition
• Ecological impacts
• Community livelihoods.

Debt Concerns

• Hydropower financing has raised Bhutan’s external debt levels.

Way Forward

• Strengthen transboundary river cooperation.
• Promote sustainable hydropower development.
• Enhance climate resilience of Himalayan infrastructure.

Hydropower remains the cornerstone of India–Bhutan strategic partnership.

International

2. US–Israel–Iran War

Context: A sharp escalation followed Operation Epic Fury and Operation Roaring Lion, amid reports of the death of Ayatollah Ali Khamenei.

• Iran retaliated with missile and drone attacks on U.S. bases across Gulf countries and threatened shipping through the Strait of Hormuz, causing a steep drop in tanker traffic.

Background of the Escalation

1. Long-standing US–Iran Rivalry

Since the Iranian Revolution, relations between the U.S. and Iran have been hostile.

Key features:

• S. sanctions on Iran
• Accusations of terrorism sponsorship
• Strategic rivalry in West Asia

2. Collapse of the Nuclear Deal

The Joint Comprehensive Plan of Action aimed to restrict Iran’s nuclear program in exchange for sanctions relief.

However:

• The Donald Trump administration withdrew from the deal in 2018.
• Iran gradually resumed uranium enrichment beyond limits.

This raised fears in the U.S. and Israel of a nuclear-armed Iran.

3. Proxy Warfare (“Grey Zone Conflict”)

The confrontation often occurred indirectly through regional allies.

Iran-backed “Axis of Resistance” includes:

• Hamas
• Hezbollah
• Houthis

These groups operate across Lebanon, Syria, Iraq, and Yemen.

Global Implications

1. Energy Shock

The Strait of Hormuz handles about 20–30% of global oil trade.

Disruptions could cause:

• Oil price spikes
• Higher shipping insurance costs
• Global inflation

2. Supply Chain Disruptions

Affected sectors include:

• Oil and LNG
• Fertilizers
• Petrochemicals

Shipping may be rerouted via longer routes (e.g., around Africa), increasing freight costs.

3. Geopolitical Realignments

• China may face energy supply issues.
• Russia could benefit from higher oil prices.

Impact on India

1. Energy Security

India imports ~85% of its crude oil, making it highly vulnerable to price shocks.

Possible effects:

• Rising inflation
• Rupee pressure
• Increased import bill

2. Diaspora Concerns

Around 8–9 million Indians live in Gulf countries such as:

• United Arab Emirates
• Saudi Arabia
• Qatar

India may need evacuation plans similar to past missions.

3. Trade and Connectivity Risks

Strategic projects affected:

• Chabahar Port
• I2U2 Group
• India–Middle East–Europe Economic Corridor

Maritime insecurity could disrupt these initiatives.

Way Forward for India

1. Diversify Energy Sources

Explore imports from:

• Africa
• Latin America
• Russia

2. Strengthen Strategic Petroleum Reserves

Increase storage capacity to cushion supply shocks.

3. Diplomatic Balancing

Maintain engagement with:

• Iran
• Israel
• Gulf states
• United States

India traditionally follows strategic autonomy.

4. Maritime Security

Enhance naval surveillance in the Arabian Sea and Indian Ocean.

5. Diaspora Protection

Prepare evacuation and humanitarian response plans.

6. Multilateral Diplomacy

Push for ceasefire through platforms such as:

• United Nations
• Shanghai Cooperation Organisation
• BRICS

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