India-Bhutan relations
India and Bhutan enjoy unique ties of friendship and cooperation, which are characterized by utmost
trust and mutual understanding.
Diplomatic relations between India and Bhutan were established in 1968 with the establishment of a
special office of India in Thimphu. Before this our relations with Bhutan were looked after by our
Political Officer in Sikkim. The basic framework of India- Bhutan bilateral relations was the Treaty of
Friendship and Cooperation signed in 1949 between the two countries, which was revised in February
2007.
• 1949 Treaty: Gave India an advantageous role of "guide” of Bhutan’s foreign policy and defence
matters.
• Protests from Bhutan about continuation of a "guide” for foreign and defence matters of a
sovereign nation, the treaty was partially modified in 2007 to remove this role. Nevertheless
Bhutan’s policies are by and large pegged with Indian policy. The 2007 pact was signed after the
Himalayan kingdom introduced major political reforms to emerge as the world’s newest
democracy.
• The 2007 Bhutan-India friendship treaty states that the two neighbors “shall cooperate closely
with each other on issues relating to their national interests. Neither government shall allow the
use of its territory for activities harmful to the national security and interest of the other."
The Golden Jubilee of the establishment of formal diplomatic relations between India and Bhutan is
being celebrated in the year 2018. (MEA)
PM Modi paid his first state visit abroad after assumption of office to Bhutan in June, 2014. The special
relationship has been sustained by the tradition of regular visits and high level dialogues between the
two countries. The latest official visit has been that of PM Tshering Tobgay to New Delhi in July, 2018.
Bhutan’s King Jigme Khesar Namgyal Wangchuk attended the funeral of former PM Atal Bihari Vajpayee
on 17th August 2018.
Bilateral Trade
India is Bhutan's largest trading partner. Among the total trade of Bhutan with other countries, 84% is
with India. 94% of Bhutanese exports goes to India. In 2016, total bilateral trade between the two
countries stood at Rs. 8,723 crore. 90% of Bhutan’s total exports to India is through sale of electricity
(~Rs. 2900 crores)
The trade between the two countries is governed by the India-Bhutan Trade and Transit Agreement
1972 which was last renewed in November 2016. The Agreement established a free-trade regime and
trade is to be transacted in Bhutanese Ngultrums and INR. The Agreement also provides for duty free
transit of Bhutanese exports to third countries. Bhutan is dependent on India for its external trade as it
is a land-locked nation.
Suhasini Haider - India also needs to focus on policing cross-border trade better. The GST still hurts
Bhutanese exporters, and demonetisation has left lasting scars on the banking system.
Bilateral Mechanisms in areas such as security, border management, trade, transit, economic, hydro-
power, development cooperation, water resources.
Hydropower Cooperation
• So far, Government of India has constructed three Hydroelectric Projects (HEPs) in Bhutan totaling
1416 MW, which are operational and exporting surplus power to India. About three-fourth of the
power generated is exported and rest is used for domestic consumption.
• India has agreed to assist Bhutan in developing a minimum of 10,000 MW of hydropower and
import the surplus electricity from this to India by the year 2020. Currently, there are three Inter-
Governmental (IG) model HEPs (Punatsangchhu-I, Punatsangchhu-II and Mangdechhu) under
implementation.
• Issues (Suhasini Haider): Delays in constructing and commissioning hydropower projects in Bhutan
by Indian companies have led to the country’s burgeoning national debt.
o India’s power-surplus status and the advent of other renewable energies like wind and solar
power will make it more difficult for Bhutan to ensure that its hydropower sector becomes
profitable. And unless India finds ways to help, it will be accused of the same sort of “debt-
trapping” that China is accused of today.
Bhutan is also the recipient of highest aid/loan from India for its developmental projects. Bhutan is
about to be graduated to a middle income country, the first from South Asia.
Educational and Cultural Cooperation, Under Graduate and Post –Graduate Scholarships, Nehru-
Wangchuck Scholarships, Ambassador’s Scholarship, Aid-to-Bhutan ICCR Scholarship, ITEC Training
Programme Scheme are some other important areas of cooperation.
The China Question
Doklam stand-off at Sikkim-Bhutan-Tibet trijunction:
China has long camouflaged offense as defense, in keeping with the ancient theorist Sun Tzu’s advice
that all warfare is “based on deception.” Still, the fact that the world’s fourth largest country in area,
after Russia, Canada and the US, is seeking to nibble away at the territory of a tiny nation speaks
volumes about China’s aggressive strategy of expansion.
Suhasini Haider (July 2017): China appears to be back in the eastern great game that Bhutan has
become, or an “egg between two rocks”, as a senior Bhutanese commentator described it.
By triggering a situation where Indian soldiers occupy land that isn’t India’s for a prolonged period,
Beijing may have actually planned to show up India’s intentions in an unfavourable light to the people of
Bhutan.
• The government must see that Bhutan’s sovereignty is no trivial matter.
• New Delhi would do well to refrain from differentiating between political factions inside Bhutan.
• India must also be aware that other neighbours are watching the Doklam stand-off closely. Nepal,
Myanmar and Pakistan too have tri-junctions (at least on the map) with both countries.
Shyam Saran (July 2017): China’s encroachment on Doklam is often characterised as a security threat to
India, particularly to the narrow Siliguri corridor linking India’s North-East to the rest of the country. But
it is also a threat to Bhutan whose main communication links south also traverse the same Siliguri
corridor. The action taken by Indian forces in Doklam is in response to a serious security threat to both
countries. Any notion that India has drawn a reluctant Bhutan into a crisis which is specific to India’s
security interest alone, ignores this ground reality.
It is also important to keep Bhutan’s interests foremost while talking about the legal basis for the Sikkim-
Tibet border. Bhutan was not a party to the 1890 Anglo-Chinese convention, nor to the subsequent 1906
convention.
This is not a case of big brother India coming to the rescue of a ‘tiny’ neighbour. The 2007 treaty was
between two sovereign and independent nations which celebrated their longstanding relationship of
mutual trust and close friendship and acknowledged the need to cooperate closely in upholding their
shared security concerns. It is this spirit which must prevail as we continue to grapple with the challenge
both our nations confront on our sensitive borders.
Just as China has tried to sow discord among ASEAN members through intimidation and blandishments,
it is seeking to do the same in our neighbourhood. Both Bhutan and India understand this strategy very
well even if some others in our region do not.
Source Channel
Suhasini Haider (August 2018) https://t.me/visionpt3652019
Experts point out that China’s actions since last June, to build a permanent military presence above the
stand-off point, mean that Bhutan has a much reduced advantage in any forthcoming negotiations on
the issue. “We will continue to discuss Doklam de jure, but the situation has changed drastically de
facto,” said one Bhutanese expert.
After Mr. Modi’s Wuhan outreach and several meetings with Chinese President Xi Jinping, Bhutan too
has decided that there is little point in avoiding engagement with China. China’s Vice Foreign Minister
Kong Xuanyou’s July visit to Thimphu was an outcome of this stance.
Interestingly, these issues are reminiscent of the situation in September 1958 when PM Nehru
undertook the arduous three-week journey by yak across the Chumbi Valley to meet Bhutan’s third king,
Jigme Wangchuck. The trip took place amidst rising tensions with China, even as it gave special
clearance for the delegation to cross into Doklam.
As former Foreign Secretary Jagat S. Mehta wrote in his book, “Negotiating for India: Resolving
Problems Through Diplomacy”: “The running anxiety during the 1960s for Bhutan was to steer its
external relations with China by giving neither provocation nor the impression of getting into a bear hug
of dependence with India. Both could jeopardise [Bhutan’s] autonomy.”
How does BIMSTEC help Bhutan?
Constantino Xavier: "With one of the highest trade-to-GDP rations in the region (82 percent) Bhutan’s
developmental goals will hinge on its ability to moderate its landlocked position by developing
connectivity with the Bay of Bengal region.”
Bhutan concerns on the ‘BBIN’ Motor Vehicle Agreement (MVA) (April-May 2017)
The Bhutanese government requested the other BBIN members to proceed with the agreement and also
clarified that it would attempt to ratify the MVA after the country held general elections in 2018. Due to
strained relations between Bhutan and Nepal, the Tshering Tobgay-led government feared that
permitting Nepalese trucks to enter Bhutan would upset the electorate.
• The main concern expressed by Bhutanese citizen groups and politicians is over increased
vehicular and air pollution in a country that prides itself on ecological consciousness.
India described Bhutan's decision as a "setback" and not a "rejection" of the agreement stating that it
was natural that all members could not proceed at the same pace, and that India would continue its
engagement with Bhutan on the issue.
Background of strained relations between Bhutan and Nepal
Bhutan's government ordered the expulsion of Bhutanese citizens of Nepali origin in the 1990s in the
name of preserving Bhutan's unique national identity ("One Nation, One People" policy) which it boasts
today.
The Nepali citizens were regarded as a cultural threat to Bhutan. About 108,000 of these stateless
Bhutanese are still living in seven refugee camps in Nepal, although many have been resettled in
Western nations.
Bhutanese National Assembly election, 2018
The National Assembly election is scheduled to be held in Bhutan on 15 September and 18 October
2018. The elections will mark 10 years of democracy in Bhutan.
Suhasini Haider (Aug 2018) - Given concerns over Indian influence, New Delhi must exercise caution in
the run-up to Bhutan’s elections.
Sovereignty and self-sufficiency
• The People’s Democratic Party, led by incumbent PM Tshering Tobgay, enters the elections with a
visible edge, even if it may not be able to better its landslide victory in 2013.
• Attacking Mr. Tobgay over a perceived “pro-India” stance will be part of the Opposition’s
messaging. At its first rally, on July 29, the Druk Phuensum Tshogpa (DPT) party president, Pema
Gyamtsho, said that “sovereignty, security and self-sufficiency” were the DPT’s top priorities. Mr.
Gyamtsho’s statement advocates a Bhutanese foreign policy that is less dependent on India.
Given this, India must step lightly and thoughtfully around the upcoming election. The Manmohan
Singh-led UPA government’s decision to cut cooking gas subsidy just before the 2013 elections in Bhutan
has often been shown as proof of Indian interference, especially by the DPT party that lost that election.
