Context:

• This article is based on the news “India’s emerging challenge in Bhutan” Which was published in the Business Standard. Bhutan King Jigme Khesar Namgyel Wangchuck will begin an eight-day visit to India, a trip that comes amid a renewed push by Bhutan and China for an early settlement of their boundary dispute.

Bhutan King Wangchuck to Begin 8-day India Visit

• The visit would provide an opportunity for both sides to review the bilateral cooperation and to advance the bilateral partnership across diverse sectors.
• The trip comes weeks after China and Bhutan held the 25th round of boundary talks in Beijing and signed an agreement on delimitation and demarcation of the Bhutan-China boundary.

India Bhutan Relations – Background

• India and Bhutan share unique bilateral relations based on mutual trust, goodwill, and understanding. 
• Basic Framework: The Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was renewed in 2007 serves as the basic framework.
• Spiritual Kinship: Bhutan considers India as “gyagar,” the sacred land where Buddhism originated. Buddhism has kept the ties between the two countries resilient. 
  • The recent International Buddhist Confederation (IBC) brought together Buddhist leaders from both nations, emphasizing their shared spiritual connection and strengthening the spiritual bond.
  • IBC: Based in Delhi, India, IBC represents the rich diversity of Buddhism and provides a platform for the global Buddhist community to share its wisdom while at the same time preserving and promoting its shared heritage. Its headquarters is in New Delhi, India.

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What are the key aspects and significance of India Bhutan relations?

• High-level Exchanges: The recent visit by Bhutan king amid Bhutan’s bilateral talks with China shows the strength of India Bhutan relations. Further, the Prime Minister of India visited Bhutan in August 2019 and launched major bilateral projects including: 
  • The 720 MW Mangdechhu Hydroproject. 
  • The Ground Earth Station of ISRO for utilization of the South Asian Satellite.
  • Extension of interconnection between the National Knowledge Network of India and Bhutan’s Research and Education Network. Trade and Economic Ties: India is Bhutan’s top trade partner and India-Bhutan Agreement on Trade, Commerce and Transit establishes a free trade regime between the two countries and also provides for duty free transit of Bhutanese exports to third countries. In 2021-22, India’s bilateral trade with Bhutan was USD 1422 million, of which India’s imports from Bhutan were USD 545 million.
• Hydropower Cooperation: Mutually beneficial hydro-power cooperation between India and Bhutan is covered under the 2006 bilateral agreement for cooperation and its Protocol signed in 2009. 
  • Four hydro-electric projects (HEPs) totaling 2136 MW are already operational in Bhutan and are supplying electricity to India. 
  • Two HEPs viz. 1200 MW Punatsangchhu-I, 1020 MW Punatsangchhu-II in Inter-Governmental mode are under various stages of implementation.
• Security and Geostrategic Aspect: Bhutan acts as a buffer between India and China. It has cooperated with India and helped to remove militant groups like United Liberation Front of Asom (ULFA) and National Democratic Front of Bodoland (NDFB) from the Himalayan nation.

• Multilateral Cooperation: Both India and Bhutan are members of various regional groupings, including SAARC (South Asian Association for Regional Cooperation) and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation).
  • Members collaborate to foster economic and technical cooperation, and work towards collective growth and stability in the regions.
• New Areas of Cooperation: Bilateral cooperation has moved into new and emerging areas with full interoperability of the flagship digital project RuPay, Bhutan became the second country to launch the BHIM app, etc.
  • COVID-19 Assistance: Under the Vaccine Maitri Initiative, India gifted around 5.5 lakh doses of the Made-In-India Covishield vaccines to Bhutan.

India Bhutan Relations – Key Challenges

• Normalizing Bhutan and China Relations: In October 2023, Bhutan’s first foreign minister visited China and concluded the 25th round of border negotiations, aimed at ending the decades-old territorial dispute. 
  • Cooperation Agreement: Signed by both the countries, it outlines the responsibilities and functions of a joint technical team tasked with delimiting and demarcating the disputed boundaries. 
  • For China, diplomatic relations and dispute resolution with tiny-landlocked Bhutan is crucial for its status as an Asian power, and for improving its offensive position vis-a-vis India.
• Security Concerns: The China-Bhutan boundary talks are raising security concerns for India as they cover the trijunction near the crucial Siliguri Corridor that connects India’s North East with the rest of the country. 
  • Recent developments viz. Chinese construction of villages along the China- Bhutan border and change in the Bhutanese expression over the resolution of the trijunction near Doklam.
• Bhutan may Join the Belt and Road Initiative (BRI): India’s reservations about the BRI and its impact on the region, particularly in terms of sovereignty and debt implications, could cause friction given Bhutan’s strategic location.
  • By establishing diplomatic relations with China, Bhutan will be the last South Asian country to enter the competitive India-China dynamic.
• Economic Dependency on India and Diversification: Bhutan heavily relies on India for trade, aid, and assistance which has provided an additional incentive for Bhutan to expedite the negotiations with China. 
  • China’s exports to Bhutan have increased from Rs 200 crore in 2020 to Rs 1,500 crore in 2022. 
• The Bangladesh, Bhutan, India, Nepal (BBIN) Motor Vehicle Agreement: Bhutan withheld its ratification of the agreement, citing environmental concerns.
  • BBIN is a sub-regional initiative to improve economic cooperation and connectivity while bypassing complex political issues of SAARC.

Way Forward for the India Bhutan Relations

• India’s Diplomatic Balancing: Although there are increasing signs of normalisation of relations between the two countries, India needs to maintain a strategic silence, indicating it does not anticipate these developments to harm its interest.
  • With sensitive sectors like Doklam being unresolved and new claims in the Sakteng region, India needs to be cautious of China’s intention to alter the status quo.
• Exploit Chinese Crisis of Trust: Bhutan got a shock when China made sudden new claims over the Eastern sector of the Sakteng region. 
  • In 1984, China narrowed the disputed region to two sectors: in the north, the Pasamlung and Jakarlung valleys; and in the west, Dramana, Shakhatoe, Sinchulungpa and Langmar Po valley, Yak chu and Charithang valleys, and the Doklam plateau. 
  • This forced Bhutan to expedite the negotiations to further deter future claims over its territory whereas ties between India and Bhutan are based on mutual trust, goodwill and understanding, favoring India over China.
• Improving Security Cooperation: The Doklam standoff in 2017 emphasized the importance of security and border management coordination between India and Bhutan. 
  • For instance, India’s deployment of the Military Training Team (IMTRAT) in Bhutan has been crucial for training Bhutanese security forces. 
• Cultural and People-to-People Relations: A number of Bhutanese pilgrims travel to Bodh Gaya, Rajgir, Nalanda, Sikkim, Udayagiri, and other Buddhist sites in India. 
  • Strengthening cultural ties through exchange programs, festivals, and educational initiatives between the two countries can enhance people-to-people contact.
• Further Strengthening Economic Ties: India is the leading source of investments in Bhutan, comprising 50% of the country’s total Foreign Direct Investment (FDI) and needs to explore new sectors and products to diversify trade beyond the existing free trade agreement.
  • India can invest in sectors like renewable energy, tourism, and technology while encouraging joint ventures and partnerships between Indian and Bhutanese companies.

Conclusion:

The evolving dynamics in India Bhutan relations, amidst Bhutan’s engagement with China, highlight the strategic significance of maintaining diplomatic balance, enhancing security cooperation, and further strengthening economic ties to ensure mutual prosperity and regional stability.

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