The Bhutanese King’s recent visit to India has sparked renewed discussion on the key issues of regional interest and bilateral cooperation between the two nations. Both leaders expressed their mutual commitment to strengthening the bond in various sectors including financial support, energy collaboration, digital infrastructure, and more. Framing the discourse around India-Bhutan relations, this article delves into the significant aspects of the meeting and its implications.
Focus on Bhutan’s Development Plans
Both leaders centered their discussions on Bhutan’s Transformation Initiatives and Reforms Process. Furthermore, India extended its support towards Bhutan’s developmental plans, specifically mentioning the 13th Five Year Plan scheduled to begin from 2024. It’s noteworthy that Bhutan aims to graduate from the pack of least developed countries by 2023 and transform into a developed nation boasting a per-capita income of USD 12,000 within the next ten years.
Credit Facility and Financial Support
India has shown its backing to Bhutan by offering to extend a third additional standby credit facility. The leaders also covered potential financial support for reforms and institutional capacity building, infrastructure and connectivity projects, energy cooperation, and space cooperation. Of particular note was the discussion about the recent launch of the India-Bhutan satellite.
Power Tariff for Hydro-Electric Project
The Indian government has acceded to Bhutan’s long-standing request to increase the power tariffs for the Chhukha hydro-electric project, which initiated operations with India’s assistance back in 1986. Discussions also included India’s potential purchase of power from the Basochhu hydel project, built with Austrian support in 2008.
Sankosh Hydel Project
In a move to expedite negotiations, both sides agreed to deal with the 2,500 MW Sankosh hydel project, whose progress had been hindered due to environmental and cost issues.
Integrated Check Post
India is contemplating the establishment of the first Integrated Check Post along the India-Bhutan border at Jaigaon, while accelerating the proposed Kokrajhar-Gelephu rail link project.
Rail and Air Link
Bhutan’s construction of its second international airport at Gelephu, near its border with India, mentioned during the talks, is a strategic move that could transform southern Bhutan into an attractive hub for international investment while strengthening connectivity.
Digital Infrastructure
The leaders explored cooperation in developing new STEM-based initiatives, the establishment of digital infrastructure, and the integration of Bhutan’s DrukRen with India’s National Knowledge Network – key factors contributing to e-Learning. The E-library project echoes Bhutan’s efforts towards digital transformation and e-learning.
Financial Cooperation
The meeting also heralded the launch of the first phase of the RuPay project and India’s BHIM app, symbolizing financial integration. The efficacy of the BHIM app in Bhutan will be reviewed in due course.
A Glance at Indo-Bhutan Relationships
The Indo-Bhutan Treaty of Peace and Friendship, 1949, laid the foundation for mutual peace, friendship, free trade, commerce, and justice. The treaty was later revised in 2007 to reflect Bhutan’s sovereignty and independence in foreign policy matters. The two nations share membership in several multilateral forums like SAARC, BBIN, BIMSTEC, etc.
Hydropower Cooperation
The 2006 Agreement on Cooperation in Hydropower established hydropower collaboration between the two nations. As per this agreement, India has committed to assisting Bhutan to develop at least 10,000 MW of hydropower and import surplus electricity from it by 2020.
Trade
Trade between India and Bhutan is regulated by the India Bhutan Trade and Transit Agreement 1972. The agreement, renewed in November 2016, has now been formalized to include seven new trade routes for Bhutan’s bilateral and transit trade with India.
Economic Assistance
India holds the position of being Bhutan’s principal development partner. It has continuously extended financial support to Bhutan’s Five Year Plans (FYPs), allotting Rs 4500 crore to Bhutan’s 12th FYP (2018-23).
Educational and Cultural Cooperation
A significant number of college-going Bhutanese students choose India for studies. Further strengthening this bond, the Government of India offers numerous scholarships to Bhutanese students.
The Path Forward
Given the abundant natural resources of both nations, environmental sustainability is a critical factor in Indo-Bhutan relations. The focus is on preserving these resources for future generations, prompting both India and Bhutan to prioritize sustainability and work towards achieving their shared goals of sustainable development and resource protection.
