Menu Close

3.3] India Bhutan Relations


1. Introduction to India Bhutan Relations

India Bhutan relations occupy a special place amongst India’s relations with all of its neighbor countries. From the moment the Himalayan nation and New Delhi established diplomatic relations in 1968, there has been a friendly and cooperative relationship between the two countries. There has never been a geopolitical rivalry between the two, nor is there a current point of contention.

The South Asian nation of Bhutan is landlocked. Situated in the eastern Himalayas, it has borders with the Chinese region of Tibet and Indian state of Sikkim to the west, the state of Arunachal Pradesh to the east, and the states of West Bengal and Assam to the south. With a population of roughly 7,20,000, Bhutan is a landlocked country between China and India, covering around 39,000 square Kms.

Bhutan has established a reputation for being a tranquil nation where risks posed by terrorism, militancy, and economic inequality have essentially disappeared. Its self-isolationist policies up until the latter half of the 20th century and the maintenance and encouragement of a strong feeling of uniqueness that has guaranteed societal cohesion and adherence are partially to blame for this. Under the first and second kings, Bhutan was a closed-door society with little interaction with the outside world. In 1998, Jigme Singhye Wangchuck, the fourth king, undertook political reforms while maintaining the cautious opening-up approach of the third king. He suggested a draft constitution and gave the council of ministers, administrative authority to transform the monarchy into a constitutional monarchy.

2. India – Bhutan Relationship

2.1 Indo Bhutan Treaty of Friendship and Cooperation

The “Treaty of Friendship and Cooperation,” which was signed on August 8, 1949, governs the relationship between India and Bhutan in most cases. This pact left a mark for history. An Anglo-Bhutanese friendship treaty was made in 1910, guaranteeing the British would not meddle in Bhutan’s domestic affairs, but placing responsibility for Bhutan’s foreign policy under the British Indian administration. This deal was superseded in 1949 by the Indo-Bhutan deal of Friendship following India’s independence. This treaty upheld Bhutan’s need to consult India for guidance on matters pertaining to its external affairs, as stipulated in its agreement with British India. It also threw India in charge of defending Bhutan.

The 1949 Treaty was revised and signed in February 2007 during His Majesty Jigme Wangchuck’s tour to India, keeping pace with the circumstances. The amendment and removed Article 2 of the treaty in 2007 and thereby freed Bhutan from, among other things, seeking India’s guidance on foreign policy and obtaining permission over arms imports.

1415788346 1320 Riding a yalk

Since then, the revised treaty has made a significant contribution to upgrading and changing the bilateral relations. Although it gives Bhutan the freedom to conduct its external relations independently of New Delhi, based on its own needs and goals, it leaves India in charge of overseeing the Himalayan kingdom’s security requirements. The amended friendship treaty between India and Bhutan not only takes into account the current state of our relationship but also establishes a strong basis for its future growth in the twenty-first century.

In practically every area of bilateral relations, including commercial and economic cooperation, hydroelectricity, sustainable development, cultural and people-to-people contacts, the pact offers a strong foundation for future expansion of Indo-Bhutan relations.

2.2 Indo Bhutan High Level Exchanges

Apart from the treaty, regular visits and high-level discussions between the two nations have maintained the unique connection. In September 2013, Tshering Tobgay made his first formal trip to India as Prime Minister after winning the Bhutanese election. In May 2014, PM Tobgay returned to India with a six-person team that included the Foreign Minister, to attend PM-designate Narendra Modi’s swearing-in ceremony. In June same year, Prime Minister of India Narendra Modi and a delegation made a state visit to Bhutan at the King’s request. During visit, PM Modi also placed the cornerstones for the Supreme Court building, which was built with support from the Government of India, and the 600 MW Kholongchhu Hydropower Project.

India Bhutan Relations Meets

The following state visit happened in December 2018. It was Lotay Tshering’s, the new prime ministers, first trip abroad since taking office in November 2018. It was in keeping with the custom of frequent high-level exchanges between the two nations and happened during the golden jubilee year of the established diplomatic relations between India and Bhutan.

EAM Dr. S. Jaishankar visited Bhutan in June 2019 as his first overseas visit after assuming office. Foreign Minister of Bhutan, visited India in November 2019. EAM Dr. S. Jaishankar again visited Bhutan in April 2022. And recently, the new Prime Minister of Bhutan, Tshering Tobgay visited India in March 2024, at the invitation of Prime Minister Shri Narendra Modi.

2.3 India Bhutan Trade and Economic Ties

The India-Bhutan Agreement on Trade, Commerce and Transit – which was first signed in 1972 and revised most recently for the fifth time in 2016 – establishes a free trade regime between the two countries. The Agreement also provides for duty free transit of Bhutanese exports to third countries.

India is Bhutan’s top trade partner both as an import source and as an export destination. Since 2014, India’s merchandise trade (excluding electricity) with Bhutan has almost tripled from USD 484 million in 2014-15 to USD 1606 million in 2022-23, accounting for about 73% of Bhutan’s overall trade of Bhutan’s overall trade, with the balance of trade in India’s favour.

India’s top exports to Bhutan are petrol & diesel, passenger cars, rice, wood charcoal, cellphones, Coke and semicoke, soya-bean oil, excavators, electric generators &motors, parts for turbines, transport vehicle, bitumen. India’s top imports from Bhutan are Ferro-silicon, Ferro-silico-manganese, Portland pozzolana cement, Dolomite chips, Ordinary portland cement, Silicon Carbide,Cardamoms, betel nut, oranges, semi-finished products of iron or non-alloy steel, boulders, etc.

India is the leading source of investments in Bhutan, comprising 50% of the country’s total FDI. There are about 30 Indian companies in Bhutan operating in various sectors – banking, manufacturing, electricity generation, agri/food processing, ITES, pharmaceuticals, hospitality, and education.

2.4 India Bhutan Development Partnership

India has been extending economic assistance to Bhutan’s socio-economic development since the early 1960s when Bhutan launched its Five-Year Plans. India continues to be the principal development partner of Bhutan. For the 12th Five Year Plan, India’s contribution of Rs. 4500 Cr, constituting 73% of Bhutan’s total external grant component.

The key areas of focus of GOI’s assistance include agriculture and irrigation development, ICT, health, industrial development, road transport, energy, civil aviation, urban development, human resource development, capacity building, scholarship, education and culture.

At present over 83 large and intermediate projects (projects under Project Tied Assistance) and 524 Small Development Projects/ HICDPs are at various stages of implementation in Bhutan. The 6th India-Bhutan Development Cooperation Talks under the 12th FYP and the 2nd Talks under the 13th FYP were held in March 2024, during the visit of Bhutan’s Foreign Secretary to India.

2.5 Indo Bhutan Hydropower Cooperation

Mutually beneficial hydro-power cooperation with Bhutan is a key pillar of Indo Bhutan economic cooperation. For Bhutan, hydro-power development continues to be a vital catalyst for socio-economic development. India and Bhutan have agreed to work together to create 10,000 megawatts of hydropower generating capacity in Bhutan.

Revenues from Hydropower constitutes a significant portion of the total revenues of the Royal Government of Bhutan. The ongoing cooperation between India and Bhutan in the hydro-power sector is covered under the 2006 bilateral agreement for cooperation and its Protocol signed in 2009.

Four hydro-electric projects (HEPs) totalling 2136 MW are already operational in Bhutan and are supplying electricity to India. The 720 MW Mangdechhu was commissioned in August 2019 and handed over to Bhutan in December 2022. Two HEPs namely, 1200 MW Punatsangchhu-I, 1020 MW Punatsangchhu-II in Inter-Governmental mode are under various stages of implementation.

As per Government of Bhutan’s data, India’s imports of electricity from Bhutan amounted approximately INR 2500 crores in 2022.

2.6 Educational, Cultural Cooperation and People-to-People Exchanges

There is close bilateral cooperation in the educational and cultural fields between India and Bhutan. Over 1000 scholarships are being provided annually by GoI for Bhutanese students to study in India in a wide range of disciplines including medicine, engineering, etc. It is estimated that approximately 4,000 Bhutanese are studying in undergraduate courses in Indian Universities on self-finance basis. Under the ITEC program, about 300 slots have been utilized annually by Bhutan for upgrading administrative and technical skills of government officials and private sector employees in Bhutan.

A number of Bhutanese pilgrims travel to Bodh Gaya, Rajgir, Nalanda and other Buddhist sites in India. His Holiness the Je Khenpo (the head monk of Bhutan) visited Rajgir (Bihar) in November 2018 to preside over the Salang. or ground breaking ceremony to construct a Bhutanese Lhakhang (temple) and for World Peace Prayer.

Recently, the Asiatic Society, Kolkata loaned the the Zhabdrung Statue to the Royal Government of Bhutan. (Dharma Raja or Zhabdrung, is the title of Ngawang Namgyal, a 16th century Buddhist monk – a revered figure in Bhutan, regarded as the founder of the modern nation state of Bhutan)

2.7 COVID-19 Assistance

In line with India-Bhutan unique and special relations, GoI ensured continuous supply of trade and essential items to Bhutan, despite COVID-19 related lock-downs. GoI also provided essential medicines and medical supplies to the Royal Government of Bhutan to deal with the health-care crisis. Under the Vaccine Maitri Initiative, GoI gifted 5.5 lakh doses of the Made-In-India Covishield vaccines to Bhutan.

2.8 New Areas of Cooperation

Apart from hydro-power cooperation, India Bhutan development partnership has moved into new and emerging areas like digital banking, with full interoperability of the India’s flagship digital products lke RuPay and UPI.

India is also collaborating with Bhutan on a number of technology initiatives such as ‘Digital Drukyul’ (ICT masterplan of Bhutan). For this initiative, India is providing financial support for an optical fibre backbone across all 20 districts of Bhutan. There is also a peering arrangement between India’s National Knowledge Network (NKN) and Bhutan’s Druk Research and Education Network (DrukREN).

Space cooperation is a new and promising area of bilateral cooperation. ISRO and the Bhutanese Department of Information and Technology (DITT) jointly developed satellite ‘India-Bhutan SAT’ and was launched on 26 November 2022 by ISRO’s Polar Satellite Launch Vehicle (PSLV).

As part of our education collaboration, India is also helping Bhutan to fill the shortages of STEM teachers in schools of Bhutan.

3. Bhutan from security Lens

Bhutan is situated at a favourable location between China and India, two large and potent neighbours. In terms of national security and defence, Bhutan is particularly important to India. It is located in the centre of the 4,200 km long disputed boundary between China and us. The Prime Minister’s first international trip to Bhutan is noteworthy in light of China’s recent increased efforts to exert strategic influence in the Himalayan Kingdom.

China recently made the decision to open formal diplomatic relations with Bhutan. Alarms are going out in the South Block (India’s MEA) due to the rapidly expanding imprints of a neighbouring, powerful, and unpredictable Asian nation. So far, Bhutan’s only foreign policy manager has been India. But the vigorous and well thought economic diplomacy of China in the Bhutan may radically change the strategic calculus.

Bhutan is important for the peace and security of our North- East region. In order to destroy the camps of the United Liberation Front of Assam (ULFA), Bodo rebels, and the Kamtapur Liberation Organization (KLO) in southern Bhutan, Bhutan initiated “Operation All Clear” in 2003. The Indian army assisted in the effort to destroy about thirty camps. These camps on Bhutanese territory were utilized for ammo and weapon storage, cadre training, and scheming inside India. As a result, Bhutan’s geostrategic location has made the relationship between India and Bhutan crucial for both nations. However, India should also ensure that the partnership extends beyond security ties. The B4B model—Bharat for Bhutan and Bhutan for Bharat—must be maintained and strengthened.

Bhutan’s king, said memorably on the eve of India’s Republic Day in 2013; “my bond with India is for life, for it arises from two loves, my love for India and, my love for Bhutan and my people.” Time and again, the same spirit of goodwill and love is expressed by our people. We need to continue this glorious tradition of good neighbour lines.

4. India-Bhutan-China Strategic Triangle

India Bhutan China Triangle Region

In the Eastern Himalayas, India, Bhutan, and China create a strategic triangle, the inverted apex of which protrudes as the significant Chumbi valley in Yadong County, Tibetan Autonomous Region (TAR). The two arms of the triangle that lay on the Indian states of Sikkim in the west and Bhutan in the east are important because the Chumbi Valley is close to the Siliguri Corridor, which is 20 km wide and connects India’s jugular to the northeast. Concerns over slow communication lines on the Eastern boundary have been exacerbated in India by Chinese ambitions to expand the Qinghai Tibet railway to Xigaze and Yadong near the Sino-Indian border.

India has been able to preserve balance mainly because of the 1949 India-Bhutan treaty of friendship, which was amended in 2007 on mutually agreed conditions, given the strategic significance of the relationship. Therefore, even though China controls the base of the triangle, two of its arms may be said to be under Indian influence and authority. If the China-Bhutan boundary is reset—a move that is now the subject of negotiations—China could be able to regain more access to the Bhutanese side of the triangle, which would upend this equation.

With more autonomy following the 2007 Treaty, Bhutan would naturally be more interested in establishing diplomatic ties with China—the only country with which it shares a land border besides India.

During the 12th round of border talks in 1998, the two countries initially addressed the proposal for diplomatic relations. Remarkably, China has unresolved land borders with only two nations: Bhutan and India. With Bhutan, the Chinese have two areas of contention: 269 square kilometers in North West Bhutan and 495 square kilometers in Central Bhutan.

BTN CHN land

The North West area comprises Doklam (89 sq. km.) Sinchulumpa (42 sq. km.) and Shakhatoe(138 sq. km.)

The central Bhutan disputed area lies in Samste, Haa and Paro districts and central parts the Passmlung and the Jakarelung Valley in the Wangdue Phodrang district.

The basis for border stability is provided by the 1998 “Maintain Peace and Tranquility on Bhutan-China Border Areas” agreement between China and Bhutan. Nevertheless, allegations of Chinese forces invading Bhutanese territory have surfaced. Reports from November 2007 suggest that unmanned stations in the Doklam Valley were dismantled. In 2009, the media in Bhutan reported on several invasions. In parallel, Bhutan and China have conducted 19 rounds of negotiations on the border dispute to date; the most recent meeting took place in January 2010 following a four-year break, during which a joint field survey was decided upon. Should Bhutan attempt to appease China in order to advance the course of their relations, Delhi would undoubtedly be concerned and would even oppose. 

In July 2017, a dispute emerged between China and India over the Doklam Plateau. China sent thousands of tons of military hardware to the border with Sikkim. This action by China was seen as a part of an unsuccessful strategy to put pressure on India over the Doklam problem. Doklam is a flat, 18-kilometer-wide by 20-kilometer-long geographical area in the Himalayas of Bhutan. Situated about 15 km from India’s Nathula Pass, it is on the Tri-junction of the China-India-Bhutan border. Doklam, which lies in the Chumbi Valley, is important from an Indian and Chinese geopolitical perspective.

An agreement was reached between China and Bhutan over the Doklam issue in 1988 and 1998. The agreement states that both nations will keep the Doklam region peaceful. India was adamantly against China’s attempts to expand its military presence and construct roads in the Doklam region in opposition to the agreement. China replied by stating that Bhutan has regarded the Doklam territory as a part of China. However, Bhutan rejected China’s claims to the Doklam region and declared it its own territory on June 29, 2017. India is under pressure because it believes that if China achieves dominance in the Doklam region, it will have easier access to the ‘Chicken Neck’, which connects India to the Northeastern states. China’s reach till the ‘Chicken Neck’ can be a major threat to India’s security.

5. Scholarly Opinion on India Bhutan Relations

S D Muni suggests that “eventually full diplomatic relations will develop between Bhutan and China since the Bhutanese democracy will develop. India, trying to prevent it will only strengthen the perspective of big bullying brother. Hence instead of trying to prevent it, India should take benefit of its geographical advantage and close relations with monarchy. India should see that as long as our security and strategic concerns are taken care by Bhutan, it does not oppose normalization of China Bhutan ties. In any case, India should refrain from using coercive diplomacy with Bhutan.”

According to Harsh V Pant, India should avoid repeat of 2013 strategy. It attracts unnecessary negative publicity, is short sighted and not strategically sound. The situation should become so that Bhutan also not blame India like Nepal. Thus, do not engage in coercive diplomacy.

According to Suhasini Haidar, India’s priority should be 1) to speedily resolve hydropower related issues 2) India should be mindful of what Bhutan seeks in whole situation, 3) Apart from these, India also needs to broaden the economic base of relationship.

According to Bhutanese Prime Minister, Bhutan continues to follow foreign policy already established by monarchy and all parties have same stand on issue. However, it is concerned about India’s revised policy of CBTE (Cross Border Trade of Electricity) and seeks some changes. It has always been our foreign policy not to build full diplomatic relations with P5, still we have cordial relationship and also P2P interactions with China.

PM Narendra Modi

World talks of GDP but in Bhutan it’s about National Happiness. I am sure that India as a neighbour would be one of the reasons for its happiness.

Bharat for Bhutan and Bhutan for Bharat. The colour of our passports may be different but our thinking is the same. India stands committed to Bhutan’s happiness and progress.

6. Conclusion

Bhutan’s location between India and China makes it potentially the centre of a geopolitical struggle between India’s defensiveness and China’s rise. Bhutan understandably feels concerned about the overwhelming presence of foreign interests in Bhutan since it has great strategic implications in the Indian context and is a security worry for India. Arunachal Pradesh and the Doklam plateau are the main points of contention between China and India. Following the opening of commerce and tourism, China will now invite investment and development, which could eventually pose a danger to India’s North-East boundary and the Siliguri corridor.

Due to Bhutan’s strategic importance, China has directed its policies on reducing the Himalayan state’s reliance on India in the political, economic, and security spheres in an effort to preserve and strengthen the state’s independence and neutrality. Providing jobs to Bhutanese in India, creating educational institutions in India, and exchanging current technologies can all help to sustain positive ties with Bhutan. To maintain India’s security, particularly in the northeast, it is imperative that it maintain this triangular relationship in its advantage.

Posted in PSIR NOTES

Related Posts

Inline Feedbacks
View all comments