The article argues that as India and Bhutan have moved into the second phase of power cooperation, it is important that the two countries revisit their policies and identify approaches that will be sustainable in the long term. The article emphasises that a sub-regional energy grid between Bhutan, India and Bangladesh can become an effective conduit for strengthening sub-regional diplomacy and help in addressing the latent but underlying concerns of Bhutan, which have the potential to impact India–Bhutan bilateral relations in the long term.