India-Bhutan Relationship


    In News

    • India recently announced a number of measures to support Bhutan’s development plans during Bhutanese King Jigme Khesar Namgyel Wangchuck’s visit

    India-Bhutan Bilateral Relations

    • Bhutan shares its border with four Indian states: 
      • Assam, Arunachal Pradesh, West Bengal and Sikkim with a length of 699 km and serves as a buffer between India and China.
    • Treaty of Friendship and Cooperation:
      • The basic framework of India-Bhutan bilateral relations was the Treaty of Friendship and Cooperation signed in 1949 between the two countries.
        • It called for peace between the two nations and non-interference in each other’s internal affairs.
        • The Treaty was revised in 2007.
        • However, Bhutan agreed to let India guide its foreign policy and both nations would consult each other closely on foreign and defence affairs.
    • Diplomatic relations:
      • The diplomatic relations were established in 1968 with the establishment of a special office of India in Thimphu.
      • Institutional mechanisms:
        • There are a number of institutional and diplomatic mechanisms between India and Bhutan in areas such as security, border management, trade, transit, economic, hydro-power, development cooperation, water resources etc.
    • India has constructed three Hydroelectric Projects (HEPs) in Bhutan:
      • Chukha HEP,
      • Kurichhu HEP
      • Tala HEP which is operational and exporting surplus power to India.
      • Recently, India completed a 720 MW Mangdechhu Hydroelectric Power Project and both sides are in process of expediting the completion of other ongoing projects including the 1200MW Punatsangchhu-1 & 1020MW Punatsangchhu-2.
    • Trade:
      • The trade between the two countries is governed by the India-Bhutan Trade and Transit Agreement 1972.
      • India is Bhutan’s largest trading partner.
    • Maitri Initiative: 
      • Bhutan is the first country to receive the Covishield vaccines under India’s Vaccine Maitri Initiative.

    Recently announced cooperation plans 

    • Credit facility:
      • Bhutan is set to graduate from the list of Least Developed Countries in 2023, and its 21st century Economic Roadmap aims to turn the Himalayan kingdom into a developed country with a per-capita income of $12,000 in the next 10 years. 
      • India has also agreed to extend Bhutan a third additional standby credit facility.
    • Hydropower:
      • Hydropower, the “cornerstone” of India-Bhutan ties, also received a boost, with the government agreeing to consider Bhutanese requests for expediting long-delayed projects (Sankosh and Punatsangchhu).
      • The request was also made for revising upwards the tariff on Chhukha, the oldest project, and buying power from the Basochhu power project
    • Infrastructure projects:
      • New infrastructure projects include 
        • An integrated checkpoint for trucks at Jaigaon, 
        • A checkpoint for third country nationals and 
        • A cross-border rail link from Kokrajhar to Gelephu
    • Skilling investments:
      • Indian companies are keen to invest in Bhutan in terms of skilling and training, in the areas of education and digital technology.
    • Future potential:
      • Future partnerships could include space research, skilling, startups and STEM education, and a new Internet gateway for Bhutan, in keeping with the Bhutanese king’s new “Transform Initiative”


    • Buffer between India & China:
      • Bhutan’s border with India is over 600 km long, and it plays the role of a buffer between China and India by protecting India’s chicken neck corridor.
        • The Siliguri Corridor, or Chicken’s Neck, is a narrow stretch of land of about 22 kilometres.
        • It is located in the Indian state of West Bengal, which connects India’s north-eastern states to the rest of India, with the countries of Nepal and Bangladesh lying on either side of the corridor.
    • Hydroelectricity & revenue generation:
      • For harnessing hydroelectricity, the rivers in Bhutan, which come down from the Himalayas to India, have been used. 
      • There are joint agreements whereby India buys power generated in Bhutan. 
      • Hydroelectricity has become one of the biggest revenue earners of Bhutan, which makes Bhutan the country with the highest per capita income in South Asia today.
    • National treatment:
      • Bhutanese citizens continue to receive “national treatment” in India, on par with Indian citizens. 


    • Bhutan’s issue of brain drain:
      • The Bhutanese government is worried about the number of Bhutanese migrating overseas as youth unemployment in 2021 reached 21%. 
      • India too needs to pay more attention to this brain drain, as, in the past, Bhutan’s elite would have been educated in India. 
      • India stands to lose its edge in Bhutanese policy making and public narrative, and thus the projects outlined stand to benefit Delhi and Thimphu in keeping the talent within.
    • China factor:
      • China has been seeking a toehold in Bhutan for decades. Where Bhutan decides its boundary with China (to the west) is of exceptional relevance to India because that is a trijunction of the three countries.
      • China has offered this demarcation as part of a “package deal” with Doklam, the area near the trijunction with India, and strategically sensitive given its proximity to India’s Siliguri corridor. 
      • While Bhutan is clear that all talks about the trijunction would be “trilateral”, India’s concerns extend to any change in the area surrounding it, so there needs to be full clarity on the issue. 
    • Negative sentiments:
      • Much of the negative sentiments, wrong information about India, are on social media in Bhutan. Some in Bhutan feel that Indians are using security issues as an excuse to keep Bhutan under India’s control.
      • Parallely, China is employing all kinds of tools, instruments, methodologies to attract the Bhutanese — through trade, their modern cities, and scholarships.

    Way ahead

    • India must also not allow hyper-nationalism and its antagonism with China to pressure Bhutan. 
    • India’s time-tested ties with Bhutan have been predicated on not seeing each other in terms of the difference in their size but in counting each country’s prosperity as a win-win for both.
    • The Bhutan-India relationship has survived mainly because it was built on mutual trust & India has to keep up this relationship not just economically, or through a transactional relationship, but also by reaching out to the new generation.

    Daily Mains Question

    [Q] Discuss the significance of India’s bilateral relations with Bhutan. What are the challenges? And what are the ways to enhance this partnership beyond transactional relationships?