All India Radio (AIR) IAS UPSC – Bilateral ties between India and Bhutan

  • IASbaba
  • August 30, 2019
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All India Radio
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Bilateral ties between India and Bhutan


Listen to the 17th August 2019 Spotlight here: 

TOPIC: General Studies 2

  • India and its neighbourhood- relations.
  • Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

In News: Prime Minister Narendra Modis two-day visit to Bhutan was aimed at re-engaging with the Himalayan neighbour during his second term in office as part of his ‘neighbourhood first’ policy. It has signalled a deepening of the bilateral ties with both sides making efforts to diversify and develop their ties to a wider variety of sectors that go much beyond the traditional cooperation in the hydropower sector.


Modi’s trip is his first to Bhutan since the China-India military face-off in 2017, triggered by an intrusion by Chinese troops into territory claimed by Bhutan. It aims to diversify India’s partnership with the kingdom from cooperation in the hydro-power sector to enhanced trade and linkages in space and education. It comes in the backdrop of efforts by Beijing to woo Thimphu as well as calls within sections of the Bhutanese political establishment for stronger diplomatic ties with China and a shift away from its hydel power ties with India.

Agreements and MoU Signed

Trade & Exports: India will provide ₹400 crore for a trade support facility to encourage Bhutanese exporters, a special focus and a special package is being given in this five-year plan as trade support for companies and manufacturers to incentivise them to export more to India

Hydropower: India is providing ₹5,000 crore for Bhutan’s 12th five-year plan that began in 2018, the same as the allocation for the previous plan. Hydro-power, however, will continue to be an important sector of cooperation between the two neighbours with the two sides looking to start discussions on the 2,500 MW Sankosh project

Space: The two prime ministers inaugurated ₹7-crore ground earth station built by India’s space agency to allow Bhutan to use a transponder on the South Asian Satellite for broadcast services and disaster management – will enhance the communication, public broadcasting and disaster management coverage in Bhutan.

Digital Finance: India launched its Rupay card in Bhutan that would boost tourism and lead to shared spiritual heritage and strong people-to-people relationship.

Education: Unveiled e-plaque of the interconnection between India’s National Knowledge Network and Bhutan’s Druk Research and Education Network. Collaboration and relationship between Royal Bhutan University and IITs of India and some other top educational institutions are in line with today’s requirements for education and technology.

Inauguration of Mangdechhu hydropower project: Prime Minister Narendra Modi inaugurated the 720-MW Mangdechhu hydropower project during his two-day visit to Bhutan, one of the major projects under Bhutan’s initiative to generate 10,000 MW hydropower by 2020 with the Indian government’s support. The Rs 4,500-crore hydroelectric plant, touted as a Bhutan-India friendship project, is a 720MW run-of-river power plant built on the Mangdechhu River in Trongsa Dzongkhag district of central Bhutan. It was developed by the Mangdechhu Hydroelectric Project Authority (MHPA), which was jointly constituted by the Indian and the Bhutanese governments.

China in Bhutan

  • Tourism stands to be the second greatest economic contributor to Bhutan’s GDP and China has resorted to using tourist trends as economic leverage. There has been a significant increase in Chinese tourists to Bhutan, but this fastest growing industry witnessed a major drop in tourist arrivals after the Doklam standoff. This came as a warning to Bhutan about the country’s vulnerability.
  • There are also concerns about Bhutan’s economic progress under India’s umbrella. The current Bhutanese government faces major challenges with respect to rising unemployment and rising foreign debt to India. As the government seeks to shift away from a dependence on hydropower for economic growth, Chinese investment has caught the attention of both young people and the private sector as offering a better future – but India still stands as the major hurdle to realizing that dream. 
  • There is a growing interest in Bhutan for diplomatic relations with China. The issue has now become a part of the public debate and the government is facing large-scale pressure from the private sector to establish economic relations with China. Bhutan would like to benefit from the growing Chinese ties in the region as well but the pressure from India seems to be choking the country today.

The Way Forward

India and Bhutan celebrated 50 years of diplomatic ties in 2018. Now it is time for New Delhi to level up its relationship with Thimpu. In this pursuit, the focus should not only be on government-to-government engagement but also on people-to-people interaction and development. 

  • The fundamental area of cooperation is the hydro power sector but both sides needed to deepen the relationship in other areas — education, health care, science and technology.
  • It can also stem out from regional diplomacy with Indian Himalayan states, such as Ladakh, which shares common religious and cultural ties with Bhutan dating back centuries. This must be supplemented by institutions and policies that could ease the people-to-people connectivity between the two Himalayan regions.

It is time for India to take Bhutan seriously, with a more mature and coherent policy. India’s casual dealings with Bhutan could be detrimental to its security and economy under the present geopolitical dynamics steered mainly by China.

Do you Know?

PM Modi plants a Cypress tree sapling at Bhutan’s historic Simtoka Dzong in Thimpu: Built-in 1629 by Shabdrung Namgyal, a Tibetan Buddhist lama who is regarded as the unifier of Bhutan as a nation-state, Simtoka Dzong is one of the oldest fortress in the Himalayan nation and functions as a monastic and administrative centre.

Must read: India Bhutan Relations  + Mindmap

Connecting the Dots:

  1. India-Bhutan partnership today is of a special character and substance and forms an important pillar of Government of India’s ‘Neighbourhood First’ policy. Discuss.
  2. Himalayan linkages can be seen as a constraining factor or as a great regional foreign policy connector. What do you think? Explain.
  3. Bhutan is India’s most trusted partner but it shouldn’t be taken for granted. Critically analyse relation between both countries.

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