Indian PM Visit to Bhutan Relations

Context

Prime Minister Modi is on a two-day state visit to Bhutan as part of India’s ‘Neighbourhood First’ Policy.

Key Highlights

India and Bhutan inked seven agreements, on cooperation in energy, food safety, sports and research, as well as a space collaboration roadmap.

PM Modi was awarded the Order of Druk Gyalpo, Bhutan’s highest honor.

Also India has decided to double Bhutan’s assistance over the next five years, from 5,000 crore in 2019-2024 to 10,000 crore for the period till 2029.

India-Bhutan Relations

Geographical Connection: Bhutan shares its border with four Indian states,

Assam, Arunachal Pradesh, West Bengal and Sikkim with a length of 699 km and serve as a buffer between India and China.

Diplomatic Relations: The formal diplomatic ties were established in 1968, with the cornerstone being the Treaty of Friendship and Cooperation signed in 1949 and subsequently renewed in 2007.

Trade Relations: India is Bhutan’s top trading partner, and in the last decade, India’s non-hydropower trade in goods with Bhutan has increased from US$ 484 million to US$ 1.606 billion.

Financial assistance: For the 12th Five Year Plan of Bhutan, India’s contribution of In Rs 5000 Cr. constitutes 73% of Bhutan’s total external grant component.

Development Projects

India has constructed three Hydroelectric Projects (HEPs) in Bhutan: Chukha HEP, Kurichhu HEP and Tala HEP which are operational and exporting surplus power to India.

Recently, India completed a 720 MW Mangdechhu Hydroelectric Power Project and there are ongoing projects including the 1200 MW Punatsangchhu-1 & 1020 MW Punatsangchhu-2.

India is supporting the ‘Gelephu Mindfulness City’, which is the “visionary project” of  Bhutan.

India and Bhutan plan to build a 58-km rail link between Gelephu and Kokrajhar in Assam.

The China factor in India-Bhutan relations

Boundary negotiations: China’s growing presence in Bhutan is of concern for India. Bhutan border discussions with China which have seen considerable progress making India wary.

Threat of swapping Doklam: There are concerns in India that a deal between Bhutan and China could include swapping Doklam for disputed territories in the north.

The Doklam plateau is close to the strategically important Siliguri Corridor, which connects the Indian mainland to the Northeast. The corridor also links India with Tibet, Nepal, Bhutan, and Bangladesh.

Claiming Bhutan’s territories to pressurize India: In 2020, Beijing asserted a claim on the Sakteng Wildlife Sanctuary, which is situated in eastern Bhutan and borders Arunachal Pradesh.

China has also allegedly built several villages inside Bhutanese territory.

India believes China’s claim over Sakteng Wildlife Sanctuary is its way of putting pressure on Bhutan to hand over Doklam.

Way Ahead

India’s engagement with Bhutan underscores its pressing strategic considerations in the Himalayas at a time when the two regional nuclear powers are engaged in a border conflict.

India’s development assistance to Bhutan will lead to economic prosperity in Bhutan and in the region and strengthen economic and investment linkages between India and Bhutan.

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