China's New Mega-Dam Raises the Stakes for Sino-Indian Hydrodiplomacy

The Diplomat

5 days ago

On July 19, Chinese Premier Li Qiang officially announced the start of construction on a long-planned hydropower project on the lower reaches of the Yarlung Tsangpo River. Billed as a centerpiece of China's clean energy drive, the dam marks a new chapter in the country's infrastructure history – one with profound implications not only for domestic development, but also for regional stability in South Asia.
This is no ordinary project. First proposed in the 1990s and later elevated to national priority in China's 14th Five-Year Plan, the Yarlung Tsangpo hydropower station is widely seen as the country's most ambitious hydro initiative since the Three Gorges Dam, with Li framing it as a 'project of the century.'
The dam's installed capacity will reportedly exceed 60 gigawatts – roughly triple that of the Three Gorges – generating electricity for tens of millions of homes. State media underscored its strategic importance in helping China reach its 2060 carbon neutrality target, ensure energy security in western regions, and promote high-quality development in the Tibet Autonomous Region. It is also part of China's 2035 long-term development strategy, which calls for the creation of multiple clean energy hubs along major river basins.
But the project's magnitude also heightens its geopolitical sensitivity. The Yarlung Tsangpo, known as the Brahmaputra once it enters India, originates in Tibet and flows east before making a dramatic U-turn at the Great Bend and descending into Arunachal Pradesh – a territory claimed by both India and China. It eventually reaches Bangladesh and empties into the Bay of Bengal. The river sustains agriculture, fisheries, and livelihoods for over 130 million people downstream. That China's newest dam is located just upstream of this bend – before the river crosses into Indian-administered territory – has renewed long-standing concerns in New Delhi about Beijing's leverage as an upper riparian state.
Those concerns are not new. Indian officials have for years raised objections to large-scale Chinese dam-building along the Yarlung Tsangpo, especially when pursued unilaterally. Following earlier project announcements in January, India's Ministry of External Affairs publicly called for prior consultation on all activities affecting shared rivers. While no new official statement had been released following last week's announcement, Indian media reported that the government is 'closely monitoring' the latest developments.
Some Indian commentators have gone further, warning that Chinese dams near the border could pose strategic risks during times of heightened tensions. Arunachal Pradesh chief minister Pema Khandu openly described the proposed dam as a potential 'water bomb.'
Chinese authorities, for their part, have sought to allay downstream concerns. Chinese diplomats have emphasized that the project is designed as a run-of-the-river facility that will not significantly alter water volumes flowing into India. In addition, China insists that it 'has always acted responsibly' when developing transboundary water resources. But such reassurances – though consistent in tone – have not always sufficed to calm regional unease. For downstream countries, what matters is not only hydrological facts, but also a sense of inclusion and institutional trust.
That trust remains limited. At present, the only formal cooperation mechanism between China and India on water issues is a hydrological data-sharing agreement first signed in 2002. Under this memorandum, China provides India with real-time flood season data on the Yarlung Tsangpo to aid disaster preparedness in Arunachal Pradesh and Assam. However, the mechanism has proven vulnerable to geopolitical strain. In 2017, during the Doklam standoff between Chinese and Indian forces, Beijing temporarily suspended data transfers – a move widely interpreted as political signaling. Although data-sharing later resumed, the episode revealed just how fragile functional cooperation can be in the absence of deeper institutional guarantees.
At the heart of the issue lies a legal and diplomatic vacuum. Unlike India's water treaties with Pakistan (the Indus Waters Treaty, which India suspended following a terror attack in April) and Bangladesh (the Ganges Water Sharing Treaty), there is no binding bilateral framework governing river management between China and India. China has generally opted for flexible, bilateral memoranda rather than formal legal agreements, citing the principle of upstream states' sovereign rights to develop internal water resources. This divergence in legal philosophy – combined with mutual mistrust – has left the Yarlung Tsangpo without the kind of institutional architecture that could help prevent escalation.
That absence is all the more concerning given the broader regional context. South Asia is already among the world's most water-stressed and conflict-prone river basins. Climate change is accelerating glacial melt, intensifying floods, and shifting monsoon patterns, all of which amplify the stakes of upstream interventions. Bangladesh has long expressed frustration over upstream diversions affecting its dry-season flows. Nepal has sparred with India over hydropower projects along the Ganges tributaries. In recent years, India itself considered reviving a major dam project in Arunachal Pradesh – widely viewed by analysts as a geopolitical counter to Chinese activities upstream.
It would be shortsighted for China and India – Asia's two most populous nations – to allow water to become another theater of strategic rivalry. The potential for cooperation is far greater. Establishing joint monitoring mechanisms, expanding early warning systems, and launching basin-level dialogues could foster transparency and confidence. Strengthening the existing data-sharing agreement and insulating it from political disruptions would be a good first step. But building true water cooperation will require more than technical fixes. It demands institutional imagination – and political will.
That kind of institutional breakthrough will not be easy. Neither China nor India has signed the 1997 United Nations Convention on the Law of the Non-Navigational Uses of International Watercourses, the only global treaty governing transboundary rivers. And while India has signed binding water-sharing treaties with some neighbors, its approach remains similarly bilateral and interest-driven. In other words, both governments have historically rejected the idea that upstream development should be subject to international constraints. In this sense, their stances mirror each other: each sees itself as a regional hegemon, wary of legal obligations that might curtail sovereign decision-making. As a result, both countries have become status quo powers in a region that desperately needs rule-making.
This mutual caution reflects deeper realities. In both Beijing and New Delhi, water is not just a resource – it is a symbol of authority, sovereignty, and developmental legitimacy. That makes compromise politically difficult, especially amid rising nationalist sentiment and hardening border disputes. But the absence of cooperation carries its own dangers. As climate change and geopolitical risk compound each other, what is now an institutional vacuum could easily become a vacuum of control.
A shift will not come easily. But the risks of inaction are real. The Yarlung Tsangpo will continue to flow across borders, indifferent to geopolitical lines. Whether it becomes a source of contention or a channel for collaboration depends on the choices that China and India make today.