INTRODUCTION

India and Bhutan share unique and exemplary bilateral relations, which are based on mutual trust, goodwill and understanding. Formal diplomatic relations between India and Bhutan were established in 1968.

THE ALL-WEATHER FRIENDS

• For most of the 20th century, Bhutan embraced isolationism from the rest of the world to preserve its unique culture and to avoid being dragged into great power politics.

                   » But at the same time Bhutan signed the Treaty of Friendship and Cooperation with India in 1949.

                  » Nehru’s visit to Bhutan in 1958 and China’s annexation of Tibet in 1959 convinced Thimphu to close its borders with its Northern neighbour and embrace a special relationship with India.

                  »  According to Article 2 of the 1949 Treaty India will not interfere in the internal affairs of Bhutan and Bhutan will be guided by India in external affairs. This "guidance" part was updated  in 2007 to cooperation between both nations in external matters. As part of this special relation Bhutan based on Indian guidance does not have formal diplomatic relations with China and  has not joined the Belt and Road Initiative (BRI).

• Trade: The India-Bhutan Agreement on Trade, Commerce and Transit signed in 1972 establishes a free trade regime between the two countries.

                  »  The Agreement also provides for duty free transit of Bhutanese exports to third countries.

                 » India’s total exports to Bhutan in 2022-23 were USD 1070.37 Million and India’s total imports from Bhutan in 2022-23 were USD 535.61 Million.

• Educational, Cultural Cooperation and People-to- People Exchanges: Over 950 scholarships are being provided annually by GoI for Bhutanese students to study in India.

                » A number of Bhutanese pilgrims travel to Bodh Gaya, Rajgir, Nalanda, Sikkim, Udayagiri, and other Buddhist sites in India.

                » About 50,000 Indian citizens are working in Bhutan, mainly in the construction sector, education and technical consultants involved in infrastructure projects.

                » Some Indian daily-workers also enter and exit Bhutan every day in the border towns, as a sign of the close economic interdependence between both countries.

• Economy: Bhutan became the second country to launch the BHIM app, further deepening the financial linkages between our two countries.

               » India provided development assistance for Bhutan’s 12th Five-Year plan, (2018-2023).

• Science: ISRO and Department of Information and Technology (DITT) of Bhutan collaborated on the joint development of a nano satellite (less than 10kg) for Bhutan, with the intention of sharing knowledge on building and operating a small satellite.

               » The India-Bhutan SAT was launched in 2022 by ISRO's Polar Satellite Launch Vehicle (PSLV).

               » The Ground Earth Station was inaugurated at Thimbhu, Bhutan in 2023 to receive data from India-Bhutan SAT, pertaining to its territory, directly from the satellite and process in real-time.

• Energy: Mutually beneficial hydro-power cooperation with Bhutan is a key pillar in the partnership. India has so far constructed four Hydroelectric Projects in Bhutan.

               » For instance, for the Mangdechhu Hydroelectric Project of Bhutan, India has provided a 70% loan and a 30% grant.

• Defence: In 2003, Operation All Clear was conducted by the Royal Bhutan Army against Assam separatist insurgent groups in the southern regions of Bhutan.

                 » Treaty of 1949 gives India control over the Bhutanese Defence matters. India has soldiers in Bhutan protecting its borders. The Indian Military Training Team (IMTRAT) is a training mission  of  the Indian Army in Bhutan since 1961. India’s assistance in defence and communication to Bhutan has helped it to maintain sovereignty and territorial integrity.

• Connectivity: In November 2023, India and Bhutan made a decision to go ahead with the final survey for the 58 km cross-border rail link between Gelephu and Kokrajhar in Assam to be built by India.

                 » The two sides also agreed on a second rail link for about 18 km between Samtse in Bhutan and Banarhat in West Bengal tea gardens area. 

WHAT ARE THE ISSUES THAT BHUTAN FACES? 

• Tourism industry: It is still reeling from the lingering effects of the Covid-19 pandemic. Also Bhutan has a policy of “High Value, Low Volume”, which promotes sustainable tourism based on the carrying capacity of its nature and socio-cultural and infrastructural reality.
• Unemployment: The youth unemployment rate is at 29%. And over half of Bhutan’s population is under 30 years old. Hence a record number of young people are emigrating from Bhutan to places like Australia in pursuit of better opportunities.
• Poverty: Bhutan is best known for its philosophy of promoting Gross National Happiness over Gross Domestic Product (GDP). 

                   » Since the 1980s, Bhutan has recorded an average growth in annual GDP of 7.5% and poverty levels have declined from 36% in 2007 to 10% in 2019.

                   » Even Though Bhutan is to graduate from least developed country (LDC) status, it is lagging to attract foreign direct investment (FDI).

 

• GDP: Over the past five years, Bhutan’s GDP has grown at a snail’s pace of about 1.7 per cent on average. Low forex reserves and a major public debt, with an estimated 125% Government Debt to GDP ratio in 2022( largest debt to India) are Bhutan’s major worries.

           »   Bhutan's GDP growth has been hovering around 4% for many years now (in the Covid year it declined to -10%).

 

WAY FORWARD

• India must continue supporting the Bhutanese five years plans as per their best interests.
• India must try to go beyond the hydro energy support to other renewable energy and electric transportation in Bhutan.
• India must extend more seats for Bhutanese students. Especially, MBBS seats in Assam medical colleges.
• India must complete the projects on time including the hydro and rail link projects.
• India must increase the concessional skill training missions to Bhutan especially in latest technology like space.
• India must help Bhutan in its ecology protection activities.

 

 

 

CONCLUSION

The relations between India and Bhutan have been good for many years. This relationship must be nurtured as it will help both to sail smoothly given the geopolitical implications in the region.

Keywords:
india bhutan