India plans to invest $1 billion to boost the construction of 12 hydropower projects in Arunanchal Pradesh, which is close to the China border. This move can potentially escalate tension between the two nations as China claims it as its own region.

According to the sources, the Finance Ministry, headed by Nirmala Sitaraman, recently approved the allocation of up to 7.5 billion rupees to each hydropower project in the northeastern region. A total of around 90 billion rupees will be allocated for the construction of two dozen hydropower projects in Arunachal.

The plan for hydropower projects is likely to be announced in the federal budget of 2024/25, which will be presented on 23 July by the Modi government.

hydropower projects in AP
Image Source: Blackridge Research & Consulting

According to the Economic Times report, the scheme is expected to provide aid to the northeastern states by providing them with finance equity holdings in the projects they host. The state government's support helps to facilitate quicker regulatory clearances, local rehabilitation and negotiations on sharing electricity with the host state.

India and China share a 2,500 km border, which is mostly undefined. The border has been a site of war between the two countries in 1962.

Arunachal Pradesh is a vital part of India, but China claims it as part of southern Tibet and protests against Indian infrastructure projects in the region.

The Indian government is pushing these projects in the eastern region following some reports that claim Beijing is likely to build dams on a section of the Brahmaputra river, referred to as Yarlung Tsangbo in China, which flows from Tibet through Arunachal Pradesh.

These reports are a concern for India as the Chinese construction may cause flooding or water scarcity on the Indian side of the border.

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