India and Bhutan Relations
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 basic framework of India Bhutan relations is the Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was renewed in February 2007.
Key Highlights
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Category
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Details
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High-Level Exchanges
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- PM Modi visited Bhutan in August 2019, launching major projects like Mangdechhu Hydroproject, ISRO Ground Earth Station, RuPay, and NKN interconnection.
- Bhutan's King visited India in 2017, 2018, 2022, and 2023.
- Bhutan’s PM Tshering Tobgay visited India in March 2024.
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Trade and Economic Ties
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- India-Bhutan Agreement on Trade, Commerce, and Transit (1972), revised in 2016, establishes a free trade regime.
- India's merchandise trade with Bhutan almost tripled from USD 484 million in 2014 to USD 1606 million in 2022-23.
- India is Bhutan's largest trade partner and FDI source.
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Development Partnership
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- India is Bhutan's principal development partner.
- India’s contribution to Bhutan’s 12th Five Year Plan: Rs. 4500 crore (73% of Bhutan's total external grant).
- Over 83 large projects and 524 small development projects are in progress.
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Hydropower Cooperation
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- India and Bhutan share a 2006 bilateral agreement for hydropower cooperation.
- Four hydro-electric projects (HEPs) totalling 2136 MW are already operational in Bhutan and are supplying electricity to India.
- Mangdechhu (720 MW) commissioned in 2019, handed over to Bhutan in 2022.
- Punatsangchhu I (1200 MW) and II (1020 MW) under construction.
India imports electricity from Bhutan (INR 2448 crores in 2022).
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Educational & Cultural Cooperation
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- India provides over 1000 scholarships annually to Bhutanese students.
- 300 ITEC program slots for Bhutanese officials.
- India-Bhutan Foundation (2003) promotes cultural and educational exchanges.
- Bhutanese pilgrims visit Indian Buddhist sites.
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Cultural and Buddhist Links
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- Close cultural and Buddhist ties, including pilgrimages to Buddhist sites in India.
- Zhabdrung Statue exhibition in Bhutan, loaned by Asiatic Society of Kolkata.
- Indian support for Buddhist monasteries in Bhutan.
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New Areas of Cooperation
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- Launch of RuPay and BHIM app in Bhutan.
- Collaboration on technology initiatives like ‘Digital Drukyul’ and optical fiber network.
- ISRO's India-Bhutan SAT satellite launched in 2022.
- India supports Bhutan in filling STEM teacher shortages.
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COVID-19 Assistance
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- India ensured continuous supply of essential goods during COVID-19.
- India gifted 5.5 lakh Covishield vaccines to Bhutan under Vaccine Maitri.
- Repatriated over 2000 Bhutanese nationals from India.
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Indians Working in Bhutan
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- About 50,000 Indian citizens work in Bhutan, primarily in construction, education, and technical sectors.
- Daily workers cross the border between India and Bhutan.
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Connectivity
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- Bhutan plans to build Gelephu Mindfulness City near Assam border.
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Security Cooperation
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- Indian Military Training Team (MTRAT) assists the Royal Bhutan Army.
- BRO built most of Bhutan's roads under Project 'DANTAK'.
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Way Forward
- India-Bhutan relations have flourished over the last 60 years, driven by mutual trust, regular high-level exchanges, and shared security concerns.
- Bhutan’s unique development model, based on Gross National Happiness (GNH), has been supported by India’s diplomatic and economic assistance.
- While Bhutan’s small size and landlocked position make it dependent on India for trade and security, it has also maintained sovereignty and cultural cohesion.
- Bhutan’s leadership, particularly the current king, has navigated these challenges, including militancy, while strengthening ties with India. Moving forward, India and Bhutan can serve as a model of peaceful cooperation and mutual benefit in a region marked by instability
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