Amid Tensions With China, India To Spend $1 Billion On 12 Hydropower Projects In Arunachal Pradesh

India plans to invest $1 billion to accelerate the construction of 12 hydropower stations in Arunachal Pradesh, according to a report from The Economic Times.

This move could potentially increase tensions with China, which claims the region as its own.

The finance ministry, led by Nirmala Sitharaman, has recently approved financial assistance of up to 7.5 billion rupees ($89.85 million) for each hydropower project in the northeastern region.

In total, approximately 90 billion rupees will likely be allocated for the 12 hydropower projects in Arunachal Pradesh, said the sources, who are directly familiar with the matter.

The scheme will also support northeastern states by helping them finance equity holdings in the projects they host. Involvement of state governments generally facilitates regulatory clearances, local rehabilitation, and negotiations on sharing electricity with the host state.

The plans for the hydropower stations are anticipated to be announced in the 2024/2025 federal budget, which Prime Minister Narendra Modi's government will unveil on 23 July.

India considers Arunachal Pradesh an integral part of the country, but China objectionably claims it as part of southern Tibet and raises voice against Indian infrastructure projects in the area.

The Indian government is pushing these projects in the eastern region following reports that Beijing might construct dams on a section of the Brahmaputra river, known as the Yarlung Tsangbo in China, which flows from Tibet through Arunachal Pradesh.

India is concerned that Chinese projects in the region as they could cause flash floods or create water scarcity situation on its side of border.