Context:

• On November 7, 2023, Bhutan King Jigme Khesar Namgyel Wangchuk was on a eight-day visit to India. Despite the 265.8 km border shared by Assam and Bhutan, this marked the first visit of a Bhutanese monarch to Assam.

Strengthening India-Bhutan Relationship: India and Bhutan’s Emphasis on Infrastructure and Connectivity

• India and Bhutan emphasize the importance of infrastructure and connectivity in talks between the Indian Prime Minister and Bhutan’s fifth King. 
  • Rail Links: Surveys for the Kokrajhar-Gelephu rail link connecting Bhutan to Assam were discussed, signaling a push for enhanced connectivity.
  • Prospective Rail Link to West Bengal: Discussions initiated for a Bhutan to West Bengal rail link, enhancing regional transportation networks.
  • Facilitating Bhutan-Bangladesh Trade: Plans to develop a rail link to facilitate Bhutan-Bangladesh trade and upgrade checkpoints along the India-Bhutan border.

Need for Economic Diversification for Bhutan

• Impact on Traditional Sources: Bhutan’s economy traditionally relies on hydropower and tourism, which have been adversely impacted by the COVID-19 pandemic and global warming concerns. 
• Proposed Measures: To diversify the economy, the following measures are proposed:
  • Special Economic Zone (SEZ): Proposal to build an SEZ at Bhutan’s southern border with Assam to attract investments and foster economic growth.
  • Airport Development at Gelephu: Plans for an airport at Gelephu to boost connectivity and attract international investments.

India and Bhutan Working Together for Regional Growth

• Bhutan has been actively engaging in regional cooperation to foster economic growth. 
• Recently taken Initiatives:
  • Preferential Trade Agreement with Bangladesh: Bhutan signed a Preferential Trade Agreement with Bangladesh in 2020, strengthening economic ties and opening new markets for Bhutanese exports.
  • India’s Energy Exchange: Intra-regional growth facilitated by India’s energy exchange, linking Bhutanese and Nepali hydropower suppliers and expanding to Bangladesh and Sri Lanka.

What Is the Strategic Importance of Bhutan Amidst Geopolitical Challenges?

• Amidst geopolitical challenges, Bhutan’s strategic importance becomes evident. Key considerations include:
  • Cohesive Regional Groupings: Geopolitical conflicts and anti-globalization trends necessitate cohesive regional groupings for sustained growth, taking inspiration from successful models such as the European Union.
  • Security Concerns: India’s concerns over China’s influence in South Asian trade and strategic ties, including boundary issues with Bhutan and the Siliguri Corridor.

Need for Collaboration: Bhutan faces challenges with Pakistan and Myanmar sanctions, emphasizing the need for collaboration with neighboring countries. 

• Issues with Pakistan and Sanctions: Challenges with Pakistan and Myanmar sanctions necessitate alternative trade routes and closer collaboration with neighboring countries.
• Engaging Development Partners: Drawing the World Bank and donor countries like Japan into the creation of a sub-regional hub to enhance resources and expertise for sustainable infrastructure projects.

Conclusion:

It’s a good step to agree on new initiatives with neighbors and the World to bolster collaboration in trade, technology, and cross-border connectivity. But India also has to focus on its efficient and time-bound execution to achieve long-term success.

DOWNLOAD PDF