India Accelerates Hydropower Projects in Arunachal Pradesh Amid Tensions with China

India plans to invest $1 billion to rapidly develop 12 hydropower stations in Arunachal Pradesh, a move that may escalate tensions with China. The initiative, supported by the federal finance ministry, aims to facilitate state government involvement for regulatory clearances and local rehabilitation, and is expected to be officially announced in the 2024/2025 federal budget.

India plans to invest $1 billion to accelerate the construction of 12 hydropower stations in Arunachal Pradesh, northeastern Himalayan state, according to two government sources. This move is anticipated to heighten tensions with China, which claims the region.

The federal finance ministry under Nirmala Sitharaman has greenlit up to 7.5 billion rupees ($89.85 million) in financial aid for each project in the northeastern region. About 90 billion rupees will be allocated for the hydropower projects in Arunachal Pradesh, sources said, amid expectations that these plans will be included in the 2024/2025 federal budget to be announced on July 23.

The initiative aims to assist northeastern states with financial support and expedite regulatory approvals and local rehabilitations. This comes in the wake of stalled private sector projects and previous investments to state-run firms NHPC, SJVNL, and NEEPCO for the 11.5-gigawatt-capacity plants. The development is part of broader infrastructure enhancements near the contested border with China.