{"id":883,"date":"2026-05-28T03:31:17","date_gmt":"2026-05-28T03:31:17","guid":{"rendered":"https:\/\/asianewscast.com\/2026\/05\/28\/nepal-india-and-the-paradox-of-hydro-hegemony\/"},"modified":"2026-05-28T03:31:17","modified_gmt":"2026-05-28T03:31:17","slug":"nepal-india-and-the-paradox-of-hydro-hegemony","status":"publish","type":"post","link":"https:\/\/www.asianewscast.com\/?p=883","title":{"rendered":"Nepal, India, and the Paradox of Hydro-hegemony"},"content":{"rendered":"
\n
\"Nepal,<\/div>
\n

The Pharping Power Plant, commissioned in 1911, was one of Asia\u2019s earliest hydropower plants.<\/p>\n

Credit: Sujitabh Chaudhary on Unsplash<\/a><\/span><\/figcaption><\/figure>\n

\n

Nepal aspires to become the <\/span>\u201chydropower battery of South Asia,\u201d<\/span><\/a> targeting an installed capacity of 28.5 gigawatts (GW) by 2035, with 13.5 GW planned for domestic use and 15 GW for export to India and Bangladesh. Besides the geo-hydrological obstacles and financial constraints, this vision must navigate a complex co-riparian hydro-political context with India. Nepal faces a vulnerability paradox stemming from the heavy dependency of its hydropower vision on India as both the primary buyer and the exclusive transit route for hydropower exports to Bangladesh, thereby subjecting it to India\u2019s hydro-hegemonic maneuvers.<\/span><\/p>\n

India\u2019s hydro-politics, meanwhile, extends beyond merely hydropower purchases to satisfy the energy needs of its growing economy and population. It faces intricate water insecurities at multiple scales, including its <\/span>domestic and inter-state water conflicts<\/span><\/a>, the high dependency of the Ganga flow on Nepal\u2019s rivers, and active water conflicts with other <\/span>co-riparian countries<\/span><\/a>, namely China, Pakistan, and Bangladesh.\u00a0<\/span><\/p>\n

Such complex hydro-political dynamics foster a sense of apprehension toward Nepal\u2019s upstream position, prompting hydro-hegemonic determinations through legalistic measures, exploiting Nepal\u2019s structural economic dependencies, and restricting Nepal\u2019s international hydro-relations. In co-riparian contexts, the outcomes of water resource interventions are shaped less by national economic objectives and more by the hydro-political interests of the dominant riparian state. Thus, Nepal\u2019s reliance on India for its hydropower ambitions reinforces India\u2019s hydro-hegemony and could lead to Nepal relinquishing significant control over its water resources.<\/span><\/p>\n

Nepal\u2019s Hydropower Vision<\/b><\/p>\n

Nepal commissioned one of Asia\u2019s earliest hydropower plants, the <\/span>Pharping Power Plant<\/span><\/a>, in 1911. Despite this early start, hydropower development progressed slowly throughout the 20th century. A significant shift occurred in the early 1960s when Nepal recognized its hydropower potential of 83 GW, elevating hydropower to a central issue in political and public discourse. Since then, hydropower has been integral to Nepal\u2019s societal outlook, modernization visions, and developmental goals.<\/span><\/p>\n

However, during the global modernization era in the latter half of the 20th century, hydropower development remained limited and reliant on state-led interventions funded by foreign aid from global and regional geopolitical actors, including the Soviet Union, China, the United States, and India. The adoption of neoliberal economic policies in the early 1990s, which promoted the commodification of nature and water, led <\/span>Nepal to liberalize its economy<\/span><\/a> and attract independent power producers (IPPs). This shift supported the national strategies to leverage hydropower for economic growth, including the 2001 <\/span>export-oriented hydropower development<\/span><\/a> model, which began to yield improvements in production by 2016.\u00a0<\/span><\/p>\n

The recent ambition to transform Nepal into a <\/span>global hub for data centers<\/span><\/a> is driven by the perceived abundance of freshwater, a favorable climate, and significant hydropower potential. If fully realized, this potential could provide continuous electricity to data mining centers, with rivers serving as cooling sources for large-scale data processing.<\/span><\/p>\n

Hydropower production in Nepal is now primarily organized under neoliberal economic principles of commodifying nature, with the private sector increasingly involved in the hydro-social domain by damming and diverting rivers, thereby transforming their surrounding socio-ecological spaces to commodify the flowing energy in rivers for making money. Although Nepal has generated a <\/span>surplus of hydropower<\/span><\/a> during the wet season since 2024, it remains distant from its 2035 target of 28,500 megawatts.\u00a0<\/span><\/p>\n

Concerns persist in Kathmandu<\/span><\/a> regarding India\u2019s willingness to purchase surplus electricity or permit its transmission to Bangladesh. The hydropower relationship between Nepal and India underscores the complexities of India\u2019s influence and strategic interests in both Nepal\u2019s hydropower sector and its broader hydrological landscape.<\/span><\/p>\n

Nepal\u2019s Geo-hydrology and India\u2019s Insecurity<\/b><\/p>\n

While it may appear rational for India to prevent Nepal from developing water storage infrastructure to preserve Himalayan flows into the Gangetic basin, instead, India\u2019s more effective strategy has been to establish legal control over Nepal\u2019s water within Nepal. Since the 1950s, India has emulated British colonial practices by seeking and formalizing legal control over Nepal\u2019s rivers <\/span>through agreements<\/span><\/a> such as the 1964 Amended Gandak Agreement, the 1966 Revised Kosi Agreement, and the 1996 Mahakali Treaty. These agreements legitimized and formalized India\u2019s unilateral authority over the construction, maintenance, and operation of water infrastructure, including barrages. Although rooted in colonial-era strategies, notably the 1920 Sarada Agreement, the necessity for such measures is grounded in Nepal\u2019s unique geo-hydrological characteristics.<\/span><\/p>\n

Nepal is geo-strategically situated between India to the south and China to the north. Its diverse geological landscape features the towering Himalayas in the north and the fertile southern plains of Terai, making India the only direct co-riparian country. <\/span>Thousands of rivers<\/span><\/a> and rivulets originate from the high-altitude glaciers of the Himalayas and the Tibetan Plateau, traverse deep gorges, and flow southward through Nepal\u2019s hilly terrain before entering India. These rivers, particularly in the Himalayan and hilly regions, have steep gradients and high velocities, making them ideal for hydropower generation. However, as the rivers reach the Terai plains, their potential for hydropower and storage diminishes due to reduced gradients, lower velocities, and wider channels. Additionally, heavy sediment loads from the upper regions are deposited in the lower plains of Nepal and India, reducing storage efficiency.<\/span><\/p>\n

These geohydrological features make Nepal\u2019s Terai and India\u2019s northern Indo-Gangetic-Brahmaputra plains among <\/span>the most challenging areas in the world<\/span><\/a> for river control and damming. In addition, while the alluvium carried by Himalayan rivers enhances soil fertility in these plains, it also complicates control and storage of water, contributing to <\/span>inter-state water conflicts<\/span><\/a>, among other factors.\u00a0<\/span><\/p>\n

India\u2019s Imperatives for Establishing Hydro-Hegemony<\/b><\/p>\n

These geo-hydrological dynamics shape India\u2019s strategic interests and influence its hydro-hegemonic ambitions. India\u2019s hydro-political strategy toward Nepal is multidimensional, incorporating water management, hydro-territorial interests, the externalization of economic and political costs, and broader regional strategic objectives. This strategy necessitates access to and control over water resources within Nepal before they reach the Indian plains, thereby effectively navigating the technical challenges of controlling water and shifting the human, material, economic, and political burdens of managing the Himalayan rivers onto Nepal.\u00a0In the mid-20th century, India pursued these objectives through bilateral agreements during a period of state-led modernization. In the current neoliberal context dominated by market forces, this strategy can be realized through the <\/span>involvement of private corporations<\/span><\/a> in the commodification of Nepal\u2019s hydro-social landscapes. Alongside the technical and geo-hydrological challenges previously mentioned, India\u2019s pursuit of hydro-hegemony, whether through bilateral agreements or market-driven approaches, is driven by both domestic and regional strategic considerations.<\/span><\/p>\n

Domestically, the Ganga River Basin spans <\/span>26 percent of India\u2019s land area across 11 states<\/span><\/a> and sustains nearly 600 million people, accounting for 43 percent of the country\u2019s population. As one of the world\u2019s most densely populated river basins, exponentially rising water demand places significant <\/span>strain on available resources<\/span><\/a>. While Nepal\u2019s rivers contribute 46 percent of the Ganga\u2019s annual flows, which shoots up to 72 percent during the lean dry season, India seeks to optimize and balance water flows from Nepal during dry and wet seasons by increasing storage capacity. For India, while energy sources can be diversified, water remains irreplaceable.<\/span><\/p>\n

Previous agreements, particularly regarding the Koshi River, enabled India to secure water and its management within Nepal, externalizing ecological, economic, and political burdens. Since the early 1960s, the Koshi barrage has experienced <\/span>numerous failures<\/span><\/a>, resulting in floods, loss of life, land inundation, and ecological damage. Large water storage projects have been politically contentious in India since the late 1970s due to land acquisition and displacement issues, sparking conflicts between federal and state governments and among communities. Establishing control over water flowing from Nepal through building storage infrastructure in India requires navigating complex domestic legal and political challenges. Thus, India\u2019s hydro-hegemony is primarily motivated by long-term complex water insecurities rather than energy needs alone.<\/span><\/p>\n

Independent and robust hydropower and water storage infrastructure in Nepal could shift control of the hydrological landscape in Kathmandu\u2019s favor. For India, this is not merely a bilateral co-riparian issue but occurs within a broader regional geopolitical context. Nepal\u2019s limited financial and technical resources necessitate external investment to realize its hydropower ambitions. India seeks to maintain dominance over this landscape and has implemented legal measures to restrict Nepal\u2019s agency, such as prohibiting the purchase of hydropower from firms linked to external actors, <\/span>particularly China<\/span><\/a>. This lawfare reflects both hydrological and broader geopolitical concerns.<\/span><\/p>\n

Regionally, India\u2019s hydro-hegemony ambitions are also shaped by water conflicts with China and Pakistan, especially in the Brahmaputra and Indus basins. China\u2019s extensive hydro-development in the transboundary basin has heightened India\u2019s water security concerns. Planned Chinese hydropower and diversion projects on the Brahmaputra, including the Yarlung project and Medog dam near the Indian border, are perceived as threats to India\u2019s <\/span>water security<\/span><\/a>. Additionally, tensions with Pakistan over the Indus river system have intensified, particularly after India\u2019s announcement to withdraw from the Indus Water Treaty in 2025.<\/span><\/p>\n

In this intricate hydro-political landscape, Nepal\u2019s control of its water adds another layer of geopolitical complexity to <\/span>India\u2019s chronic and escalating water insecurities<\/span><\/a>. Consequently, India seeks to leverage Nepal\u2019s economic and geographic dependencies to assert hydro-hegemony over Himalayan river systems. To this end, India has enacted restrictive regulations to limit Nepal\u2019s agency in pursuing its hydropower ambitions, including using its global influence to restrict <\/span>Nepal\u2019s international hydro-relations and partnerships<\/span><\/a>. These measures hinder Nepal\u2019s economic efficiency in hydropower development and pressure private enterprises to align with India\u2019s objectives, culminating into in Nepal\u2019s independent private producers (IPPs) exerting pressure on the government to align with India\u2019s objectives.\u00a0<\/span><\/p>\n

A Cautionary Tale of Two Hydropower Curses for Nepal<\/b><\/p>\n

Since the 1960s, India has supported Bhutan, another landlocked country between China and India, in its efforts to become a regional hydropower \u201cbattery.\u201d Although Bhutan did not meet its target of 10 GW installed capacity by 2020, hydropower remains central to its economy. Bhutan currently has a total installed hydropower capacity of approximately 2.5 GW, with 60-80 percent exported to India, contributing up to 20 percent of its GDP. Advocates often characterize this relationship as <\/span>mutually beneficial or \u201cinterdependent<\/span><\/a>,\u201d with hydropower providing essential revenue for Bhutan and energy for India.\u00a0<\/span><\/p>\n

However, a closer look reveals a more concerning picture. Bhutan\u2019s hydropower success has led to chronic economic and energy <\/span>dependencies on India<\/span><\/a>. While hydropower revenue is vital for economic stability, it has also substantially increased the <\/span>external debt<\/span><\/a>. Most hydropower projects are financed through Indian loans and grants, limiting economic diversification and domestic job creation, and reinforcing dependence on Indian financing, expertise, and markets.<\/span><\/p>\n

In Southeast Asia, Laos pursued a similar strategy in the mid-1990s, aiming to become the \u201cbattery of Southeast Asia\u201d through large-scale, export-oriented hydropower development. Currently, Laos operates over 80 large hydropower projects with a total capacity of 11,600 MW, exporting more than 70 percent of this energy to neighboring countries, including Thailand, Vietnam, Cambodia, China, Myanmar, and Singapore. These exports account for over 12 percent of GDP and 15 percent of export revenues. <\/span><\/p>\n

Despite its status as a major hydropower exporter, Laos faces significant economic burdens, a financial crisis, and socio-ecological costs. <\/span>Unsustainable debt<\/span><\/a> from hydropower projects has led to economic crisis, currency collapse, inflation, and fuel shortages by 2024. High project costs and long timelines have rendered export revenues insufficient to service debt, increasing the <\/span>risk of sovereign default<\/span><\/a>. Additionally, the socio-ecological impacts of these projects, including dam failures, community displacement, and environmental degradation, further intensify the challenges facing Laos.<\/span><\/p>\n

The Way Forward for Nepal<\/b><\/p>\n

Despite being an upstream riparian nation, Nepal\u2019s ambition to become the \u201chydropower battery\u201d of South Asia faces considerable geo-hydrological, technical, financial, and geopolitical challenges. The geopolitical dimension is particularly complex, as Nepal\u2019s success depends heavily on India, the downstream co-riparian state with multidimensional and multi-scalar water insecurities. It may leverage this dependency to bolster its own hydro-hegemonic ambitions, heighten Nepal\u2019s vulnerabilities, and cause its diminished control over its water and rivers.\u00a0<\/span><\/p>\n

In the highly contested geopolitical and co-riparian environment of South Asia, approaching water as a strategic resource for economic development or geopolitical gain often results in zero-sum outcomes. Furthermore, pursuing the hydropower-export-driven economy does not automatically ensure economic growth and development.\u00a0<\/span><\/p>\n

The experiences of Bhutan and Laos serve as cautionary tales, illustrating that reliance on hydropower as a primary revenue source can deepen sectoral and co-riparian dependencies. Despite a 98 percent electricity access rate, Nepal\u2019s electricity consumption capacity remains one of the lowest in the world. Rather than pursuing the goal of becoming the \u201cbattery of South Asia,\u201d Nepal could prioritize increasing domestic consumption and supporting community-based businesses and local industries.<\/span><\/p>\n

For Nepal, a more prudent approach is to view water not as simply a commodity but as an integral element of nature and hydro-social spaces. This outlook can cultivate a holistic and balanced socio-ecological context for prosperity, rather than treating nature and water as a cornucopia for domestic or regional private actors, or for global data traders to accumulate wealth at the expense of millions and the environment, while overlooking local prosperity, ecology, and culture.\u00a0<\/span><\/p>\n

Crucially, not all waterfalls are meant to have turbines and dynamos installed, nor is every flowing stream and river intended to be dammed, diverted, or manipulated. Given its highly sensitive geo-hydrological landscapes, uncritical and rent-seeking interventions in its hydro-social context could have detrimental effects on various aspects of life in Nepal.<\/span><\/p>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

The Pharping Power Plant, commissioned in 1911, was one of Asia\u2019s earliest hydropower plants. Credit: Sujitabh Chaudhary on Unsplash Nepal aspires to become the \u201chydropower battery of South Asia,\u201d targeting an installed capacity of 28.5 gigawatts (GW) by 2035, with 13.5 GW planned for domestic use and 15 GW for export to India and Bangladesh. […]<\/p>\n","protected":false},"author":1,"featured_media":884,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-883","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\nNepal, India, and the Paradox of Hydro-hegemony - Asia Newscast<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.asianewscast.com\/?p=883\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nepal, India, and the Paradox of Hydro-hegemony - Asia Newscast\" \/>\n<meta property=\"og:description\" content=\"The Pharping Power Plant, commissioned in 1911, was one of Asia\u2019s earliest hydropower plants. Credit: Sujitabh Chaudhary on Unsplash Nepal aspires to become the \u201chydropower battery of South Asia,\u201d targeting an installed capacity of 28.5 gigawatts (GW) by 2035, with 13.5 GW planned for domestic use and 15 GW for export to India and Bangladesh. 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Credit: Sujitabh Chaudhary on Unsplash Nepal aspires to become the \u201chydropower battery of South Asia,\u201d targeting an installed capacity of 28.5 gigawatts (GW) by 2035, with 13.5 GW planned for domestic use and 15 GW for export to India and Bangladesh. 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