Bhutan’s King Jigme Khesar Namgyel Wangchuck and Queen Jetsun Pema Wangchuck arrived in the national capital for a two-day official visit to India.
Areas of Cooperation Between India and Bhutan
Diplomacy
- The Treaty of Friendship and Cooperation (1949, renewed in 2007) forms the basis of bilateral relations, promoting peace and non-interference.
Trade
- India is Bhutan’s top trade partner, both for imports and exports. India also leads in foreign direct investments in Bhutan, accounting for 50% of Bhutan’s FDI.
- The 2016 Trade, Commerce, and Transit Agreement establishes a free trade regime between the countries.
Development Partnership
- Bhutan is the largest beneficiary of India’s external aid, with significant allocations in the 2023-24 budget.
- India supports Bhutan’s goal to become a high-income nation by 2034, promoting initiatives like ‘Brand Bhutan’.
Connectivity
- Bhutan plans to develop Gelephu Mindfulness City, connecting it to Assam, enhancing regional connectivity.
Hydropower
- India has constructed several major hydroelectric projects in Bhutan, such as Kurichhu, Tala, Chukha, and Mangdechhu. The 720 MW Mangdechhu project was handed over to Bhutan in 2022.
Cultural Relations
- Buddhism strengthens the ideological connections between India and Bhutan.
- The India-Bhutan Foundation, established in 2003, promotes people-to-people exchanges in cultural fields.
Security
- The Indian Military Training Team (IMTRAT) is stationed in Bhutan, assisting the Royal Bhutan Army.
- India’s Border Roads Organisation (BRO) has built most roads in Bhutan under Project DANTAK.
New Initiatives of Cooperation
- Launch of RuPay and BHIM app in Bhutan.
- Collaboration on the ‘Digital Drukyul’ project.
- Joint development of the India-Bhutan SAT satellite by ISRO.
- India supports filling STEM teacher shortages in Bhutan.
- Under the Vaccine Maitri initiative, India gifted 550,000 doses of the Covishield vaccine to Bhutan.
Major Challenges in India-Bhutan Relations
- Hydropower Trade Issues: Changes in India’s power purchasing policy and delays in project completions, such as Punatsangchhu I & II.
- Militant Hideouts: Northeastern militant groups like ULFA and NDFB use Bhutan as a hideout.
- BBIN Initiative: The Bangladesh-Bhutan-India-Nepal Motor Vehicle Agreement is on hold due to environmental concerns from Bhutan.
- Financial Model Changes: The shift from a 60:40 grant-loan model to a 30:70 model increases Bhutan’s financial burden.
- China’s Presence: Bhutan’s border disputes with China, such as the Doklam issue, raise security concerns for India.
Way Forward
- Diversify Economic Engagements: Strengthen cooperation in fintech, space tech, and biotech.
- Invest in Services Sector: Align investments with Bhutan’s philosophy of Gross National Happiness.
- Leverage Gelephu Project: Use this opportunity to deepen partnerships and counter China’s influence.
- Initiate Trilateral Talks with China: Open communication channels to address border disputes.
- Enhance People-to-People Ties: Use Buddhism and tourism to strengthen connections.
- Improve Security Measures: Establish contact points and mechanisms for real-time information sharing regarding militant activities.
