India and Neighbouring Countries: Bhutan

About Bhutan

Bhutan is a landlocked Eastern Himalayan country that shares a common cultural link of Buddhism and people-to-people connection in the border Indian states of Assam, Arunachal Pradesh, West Bengal, and Sikkim with India.

Areas of Cooperation

Historical Relations
- In 747 AD a Buddhist monk, Padmasambhava went from India to Bhutan and led the Nyingmapa sect of Buddhism.
- During monarchy rule, India has aided Bhutan’s Buddhist cultural development.
- Pre – Independence
  - As an effect of Anglo – the Bhutan conflict Bhutan became a part of the British empire.
Political Relations
- Timeline
  - When India declared independence in 1947, Bhutan was among the first nations to recognize it.
  - 1949 – Bhutan signed the Friendship Treaty with India as the period witnessed the Chinese occupation of Tibet.
  - 1968 – Establishment of special office of India in Thumphu.
  - 1978 – Special representatives’ offices were converted to full-fledged embassies.
  - 2007 – India-Bhutan Friendship Treaty, the two sides agreed to “cooperate closely with each other on issues relating to their national interests.
  - India and Bhutan celebrated 50 years of diplomatic relations in the year 2018.
  - Share common platforms like SAARC, BBIN, BHIMSTE, and SASEC.
Economic Relations
- India is the largest trading partner and investor of Bhutan.
- Bhutan 94% of exports to India.
- 1972 – India – Bhutan Trade and Transit Agreement established a free trade zone and trade conducted in Bhutanese Ngultrums and Indian Rupee.
- India provides assistance to Bhutan for education, human resource development, health, etc.
- India launched the Rupay debit card in 2019.
- Indian investment in ‘Gelephu Mindfulness City’.
Hydel Power Corporation
- 4 hydropower projects totaling 2136MW operational in Bhutan supply electricity to India
- Hydro projects funded by India
  - Mangdechu
  - Panatsangchhu -1
  - Panatsangchhu -2
  - Kholongchu
Border Management and Defence Cooperation
- There is a Secretary-level mechanism for border management and security-related matters between the two countries.
- There is also a Border District Coordination Meeting (BDCM) Mechanism between the bordering States and the Royal Government of Bhutan (RGoB) to facilitate coordination on border management and other related matters.
- The Indian Military Training Team (IMTRAT), headed by a Major General, plays a critical role in training Bhutanese security personnel.
- Operation All Clear (2003 – 04 ) – Joint military operation against insurgents and rebels like ULFA.
Space Cooperation
- 2019 – Agreement on Small satellite development.
- Ground Earth Station of South Asia Satellite
Cultural Relations
- Student exchange program and scholarship for Bhutan students by India.
- India – Bhutan Foundation(2003) to promote cultural interaction among people.
- Around 60000 Indian diasporas live in Bhutan.

Significance of Bhutan to India

Bhutan shares a strategic border with India, acting as a buffer state between India and China.
Bhutan is a market for Indian goods and a source of hydel power.
Stability of Bhutan for Indian security.

Challenges in Relations

Balancing relations with other neighboring countries like China.
Environmental concerns related to hydropower projects.
Ensuring equitable economic cooperation and development.
Addressing border disputes and security issues.
Managing cultural and societal differences.
Navigating geopolitical complexities in the region.