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A view of Yarlung Zangbu Grand Canyon, the world's largest and deepest canyon, in Tibet, China, on August 12, 2012.
China’s mega-dam gambit: The $167 billion bet that could reshape Asia
On Saturday, China announced the start of one of the world’s biggest infrastructure projects: a $167 billion mega-dam in Tibet that will, when completed, be the most powerful source of hydroelectricity in history.
The Yarlung Tsangpo dam, located at a hairpin river bend where water plunges 6,500 feet through the Himalayas, will dwarf China’s existing Three Gorges Dam, currently the world’s largest, and will produce 60 gigawatts of electricity, ten times as much as the most powerful American dam, Grand Coulee in Washington State.
“You could power many medium-sized countries with 60 gigawatts,” Eurasia Group energy expert Herbert Crowther explains. “Most nuclear reactors would be around a gigawatt.”
Yarlung Tsangpo, set to be completed by 2035, is meant to stimulate the Chinese economy and boost clean energy, but it will also control waters flowing to hundreds of millions of people in neighboring India and Bangladesh at a time when tensions over water are already high.
Why is China building the dam? Like the Three Gorges Dam constructed in China in the 1990s, this will deliver a significant economic boost while also providing a major new supply of clean energy that may ultimately support the nation’s aim to achieve net-zero emissions by 2060.
“The Chinese government’s favorite infrastructure is a dam,” says Dan Wang, Eurasia Group’s China director. “The electricity generation aspect is less relevant than the massive investment, jobs, and demand for domestic technology such projects can generate.”
Water as a weapon? Downstream nations are sounding alarms, since the Yarlung Tsangpo flows through the state of Arunachal Pradesh in northeastern India before merging with the Brahmaputra River, which eventually continues into Bangladesh. Both governments are wary of a situation in which Chinese officials control access to their water.
This could trigger competitive dam-building throughout the Himalayas, as each nation scrambles to control its water resources before neighbors do. India has already announced plans to accelerate its own hydropower development near the Chinese border in response, fearing Beijing could weaponize water flows during future conflicts.
The specter of water wars isn’t theoretical — when military tensions nearly boiled over between India and Pakistan back in May, India suspended the Indus Waters Treaty that had governed water sharing between the two nations for decades. With Pakistan being one of China’s closest regional partners, the Yarlung Tsangpo dam adds another layer of complexity to an already volatile triangle of neighbors competing for the same resources..
Indian paramilitary soldiers patrol along a road in Srinagar, Jammu and Kashmir, on April 29, 2025.
India and Pakistan inch toward a major clash
Nerves are fraught throughout Pakistan after authorities said Wednesday they have “credible intelligence” that India plans to launch military strikes on its soil by Friday, fueling fears of an outright clash between the two nuclear-armed archrivals. Troops from both sides have been exchanging fire in the disputed territory of Kashmir since a terrorist attack in the Indian-controlled section killed 26 civilians last Tuesday. Both China and the US are calling for restraint.
Tensions are spiraling rapidly. India closed its airspace to Pakistan on Wednesday and ordered nearly all Pakistani citizens to leave the country last week. Pakistan – while denying any involvement in the attacks – also canceled visas last week for most Indian citizens in retaliation. The scenes of rapid flight evoked painful memories of the 1947 Partition when Hindus in Pakistan and Muslims in India fled bloody ethnic massacres in the newly formed nations.
How bad could it get? The two countries have had two major wars, in 1965 and 1971, both of which India won, in the latter case quite decisively. In the ensuing decades, however, India has utterly outstripped Pakistan economically, militarily, and diplomatically, which means that Islamabad’s chances of prevailing in a conventional confrontation are very slim.
The balance of power shifted nonetheless when Pakistan began developing nuclear weapons in 1972 to match the India program begun in 1967. This has prevented a full-scale attack ever since. When the two sides went to war in 1999, hostilities lasted just over two months and were geographically limited to the Himalayas. If New Delhi should be foolish enough to existentially threaten its neighbor, it raises the grim – albeit unlikely – prospect of a nuclear exchange.
We’re watching for a limited engagement, but we’re far from sanguine about the risks.
ISKCON (International Society for Krishna Consciousness) activists hold placards as they protest demanding the release of Hindu priest Chinmoy Krishna Das Prabhu, who was arrested in Bangladesh, in Kolkata, India, 29 November 2024. Chinmoy Krishna Das Prabhu, the spokesperson for the Bangladesh Sammilita Sanatani Jagran Jote was arrested by the Dhaka Metropolitan Police on November 25, accused of disrespecting Bangladesh's national flag during a rally.
India-Bangladesh trade war brews, Hasina accuses government of genocide
Anger in India over mistreatment of Bangladesh’s Hindu minority could spark a trade war. India’s ruling Hindu nationalist Bharatiya Janata Party has threatened to impose a five-day trade embargo against Bangladesh unless anti-Hindu violence ceases by next week, and possibly for “an indefinite period” in 2025. Some Indian businesses have already stopped exporting to Bangladesh, and Indian hospitals are reportedly refusing Bangladeshi patients.
Why the threats? Violence erupted last week after the arrest in Bangladesh of Hindu monk Krishna Das Prabhu on sedition charges following protests Prabhu led against anti-Hindu discrimination. Prabhu’s supporters stormed the Bangladeshi consulate in Agartala on Monday and reportedly hacked a Muslim lawyer to death in Chattogram.
Hindus constitute less than 10% of Bangladesh’s 170-million-strong population and have long claimed discrimination and violence from the Muslim majority. Attacks intensified after former Prime Minister Sheikh Hasina fled Dhaka in August following violent anti-government uprisings. On Wednesday, in her first public address since then, Hasina accused interim leader Muhammad Yunus of genocide.
What’s the issue for India? An ally of Indian Prime Minister Narendra Modi, Hasina now lives in exile in India, complicating Delhi’s relationship with the new Bangladeshi administration. Bangladesh is a key ally for India’s border security, particularly in the northeastern states where armed insurgents frequently cross the border to escape local authorities.