Powering partnerships : A game theoretical perspective on Bhutan–India hydropower cooperation in the Brahmaputra River Basin

Summary

India and Bhutan share a longstanding and multifaceted partnership rooted in shared history, mutual respect, and strategic cooperation, particularly in the hydropower sector within the Brahmaputra River Basin (BRB). This collaboration has driven Bhutan's socio-economic development, while India benefits from enhanced energy security and geopolitical stability. However, the sustainability of this partnership faces growing challenges. Environmental and social externalities, along with Bhutan's push for economic diversification, greater autonomy, and shifting regional geopolitics under China's growing influence, cast doubts on their long-term viability. This paper employs a game theoretic approach to analyse the dynamics of Bhutan-India hydropower cooperation over three phases: the early bilateral phase (1961–1980), the first phase of large-scale projects (1981–2007), and the second phase (2009–2024), marked by geopolitical shifts and Bhutan's pursuit of economic sovereignty. The study models the strategic interactions between the two nations, highlighting how their preferences, payoffs, and associated costs have evolved. The findings underscore the need for India to recalibrate its strategy, fostering equitable and sustainable collaboration that aligns with Bhutan's developmental goals and sovereign interests. This nuanced understanding is essential for sustaining mutual benefits while addressing emerging challenges in an increasingly dynamic geopolitical landscape in South Asia.