Bhutan's net energy ledger with India

In calendar 2023, Bhutan earned USD 208 million exporting hydroelectricity to India. In calendar 2025, Bhutan spent USD 442 million importing fuel from India. The same country, the same border, and on the most recent full-year comparison the fuel bill is 2.2× larger than the electricity revenue.

The country built its hydropower sector since the 1980s as an export industry — the grid was sized for cross-border export, not domestic consumption. The fuel side grew separately: vehicle ownership exploded, almost all of it on Indian-refined fossil fuel. Two flows that nobody coordinated. The bill arrives at the same border.

The deficit is now structural. Even at peak hydrology, hydropower revenue does not cover the fuel import bill. PHPA-II coming online in late 2024 will lift export earnings, but not above ~USD 350M at current tariffs — still well short of the fuel bill.