Free Online Course on IIR: India – Bhutan Relations

Free Online Course -India and Its International Relations

:: India – Bhutan Relations ::

Diplomatic relations between India and Bhutan were established in 1968 with the appointment of a resident representative of India in Thimphu. Before this our relations with Bhutan were looked after by our Political Officer in Sikkim. The basic framework of India – Bhutan bilateral relations is the Treaty of Friendship and Cooperation of 1949 between the two countries, which was updated and signed during the visit to India of His Majesty Jigme Khesar Namgyel Wangchuck in February 2007.

The updated India-Bhutan Friendship Treaty not only reflects the contemporary nature of our relationship but also lays the foundation for their future development in the 21st century. The Treaty provides, amongst other things, for perpetual peace and friendship, free trade and commerce, and equal justice to each other's citizens. Our bilateral political relations with Bhutan have matured over the years and are characterised by close trust and understanding and extensive cooperation in the field of economic development, particularly in the mutually beneficial sector of hydroelectric power.

Prime Minister's Modi's 2014 visit The present Indian Prime Minister Mr. Narendra Modi chose Bhutan as his first foreign destination, placing regional co-operation before global co-operation. He had inaugurated the Supreme Court Complex in Bhutan and also promised help to Bhutan on IT and digital sector.

Economic Cooperation

Mutually beneficial economic inter-linkages between India and Bhutan have been an important element in our bilateral relations. India continues to be the largest trade and development partner of Bhutan. Planned development efforts in Bhutan began in the early 1960s. The First Five Year Plan (FYP) of Bhutan was launched in 1961. Since then, India has been extending financial assistance to Bhutan’s FYPs. So far, nine Five Year Plans of Bhutan have been completed.

Some of the major projects in Bhutan carried out with Indian assistance in the past include 1020 MW Tala Hydroelectric Project, 336 MW Chukha Hydroelectric Project, 60 MW Kurichhu Hydroelectric Project, Penden Cement Plant, Paro Airport, Bhutan Broadcasting Station, Major Highways, Electricity Transmission and Distribution System, Indo-Bhutan Microwave Link, Exploration of Mineral Resources, and Survey and Mapping.

Ninth Five-Year Plan (2002-2008): GOI assistance to Ninth Five Year Plan (2002-08) of Bhutan was Rs. 2610.14 crore. This included Rs 907 crore for project tied assistance, Rs 820 crore as Programme grant and rest as various refunds and subsidies. Major GoI assisted projects completed in the Ninth Plan include 350 bedded JDWNR Hospital in Thimphu, Regional Referral Hospital in Mongar, Phase I of double-laning of Thimphu-Phuentsholing road, double laning of Paro-Chuzom road, construction of 10 new schools, 306 low income housing units, Renovation of Semtokha Dzong, two Youth Centres, RENEW Centre, Human Resource Development, Telecommunications and projects in agriculture and allied sectors. GoI also funded feasibility studies for establishing rail linkages between border towns of India and Bhutan.

Tenth Five –Year Plan (2008-13): The Government of India committed assistance worth Rs. 3400 crores during the 10th FYP. This includes Project tied Assistance (Rs 2000 crore for about 70 projects in key socio-economic sectors such as agriculture, ICT, media, health/ hospitals, education/ schools, capacity building, energy, culture and infrastructure etc), Programme Grant (Rs 700 cr.) and the Small Development Projects (Rs 700 cr.). During his address to the Joint Session of the Bhutanese Parliament in May 2008, Prime Minister Dr. Manmohan Singh informed that the total bilateral economic engagement with Bhutan over the next five years to be of the order of Rs./ Nu. 100 billion. Some of the important projects being executed under the 10th Plan include construction of Supreme Court, strengthening of Constitutional Officers such as Royal Audit Authority, Election Commission, anti-Corruption Commission and Attorney General, renovation of major Dzongs, preparation of DPRs for major power projects, widening of major roads, scholarships and expansion of tertiary educational institutions. The regular Project Monitoring Committee (PMC) meetings and Plan Talks comprising concerned GoI and RGoB members are held regularly to monitor implementation of various projects.

Mega Projects: In addition to the GOI assistance mentioned in the above para, GOI also provides support to Bhutan to develop various other developmental projects known as mega projects due to their size.

Bilateral cooperation in the hydropower sector has been carried forward with the formal inauguration of the 60 MW Kurichhu Hydroelectric project in April 2006, and commissioning of the 170 MW first unit of 1020 TALA Hydroelectric Project in July 2006. All six units have been commissioned by end March 2007. GOI has agreed to provide assistance to Bhutan in developing the hydropower sector and to purchase at least 10,000 MW of power from Bhutan by 2020. For the purpose ten hydropower projects have been agreed during the first Empowered Joint Group (EJG) Meeting held in Delhi in March 2009. Of these 10 projects, the three projects – Punatsangchhu-I Hydro Electric Project, Punatsangchhu –II and Mangedechhu HEPs – are under construction. For 4 projects viz., the Kholongchhu HEP, Amochhu Reservoir, Wangchu RoR and Bunakha Reservoir projects, respective PSUs have submitted DPRs to the two governments for approval. For remaining 3 peojects - the Kuri Gongri HEP , the Chamkharchhu-I HEP and Sankosh Reservoir Hydroelectric Project (HEP) - DPRs are expected to be finalised by 2012.

GOI is also committed to the establishment of a 1 million tonne cement project, Dungsum Cement Plant at Nganglam. The project is under construction and is expected to be operational by early 2012. During his visit to Bhutan Prime Minister Dr. Manmohan Singh announced the construction of the first ever rail link between India and Bhutan, connecting Hashimara to Phuentsholing, called the “Golden Jubilee Rail Line”. The technical studies on the alignment of the rail line have started. RITES has, however, encountered problems from the owners of Tea Gardens which fall on the proposed railway line. Ministry of Railways along with the Government of West Bengal are trying to resolve the issue. During PM’s visit to Bhutan in April 2010 for the 16th SAARC Summit, Prime Minister Dr. Manmohan Singh and the Prime Minister Jigmi Y. Thinley jointly laid the Foundation Stones for the Punatsangchhu –II and Mangdechhu Hydro Electric Projects (HEPs) and the Project ‘Bhutan Institute of Medical Sciences (BIMS)’, and launched the Project Implementation Document for the ICT Project “Chipen Rigphel – Enabling A Society, Empowering A Nation” (Total Solutions Project).

Standby credit facility: GoI has extended a standby credit facility of Rs 300 crores to RGoB in March 2009 to help Bhutan overcome rupee liquidity crunch.

Trade with India

India is not only Bhutan's main development partner but also its leading trade partner. A free trade regime exists between India and Bhutan. The India-Bhutan Trade and Commerce Agreement which expired in March 2005, has been renewed for a period of 10 years. Currently, the major items of exports from Bhutan to India are electricity (from Tala, Chukha and Kurichhu Hydroelectric Project), base metals and articles, minerals, vegetable fat and oils, alcoholic beverages, chemicals, cement, timber and wood products, cardamom, fruit products, potatoes, oranges and apples, raw silk, plastic and rubber products. Major exports from India to Bhutan are petroleum products, mineral products, base metals and articles, machinery, automobiles & spares, vegetable, nuts, spices, processed food and animal products, chemicals, wood, plastic and rubber. The Agreement on Trade and Commerce also provides for duty free transit of Bhutanese merchandise for trade with third countries. Sixteen exit/entry points in India identified in the Protocol for Bhutan's third country trade are: Jaigaon, Chamurchi, Ulta Pani, Hathisar (Gelephu), Darranga, Kolkata, Haldia, Dhubri, Raxaul, Panitanki, Changrabandh, Phulbari, Dawki, New Delhi, Chennai and Mumbai. Of these, Kolkata, Haldia, Mumbai and Chennai are the designated seaports, Dhubri is the riverine route, New Delhi, Chennai, Mumbai and Kolkata are the air routes and Raxaul is the rail route. The others are the designated road routes.

During 2010, imports from India were of the order of Rs. 2930 crores and constituted 75% of Bhutan’s total imports. Bhutan’s exports to India in 2010 amounted to Rs. 2600 crores and constituted 90% of its total exports.

Trade Talks: The India Bhutan Bilateral Trade Talks were held in New Delhi on 18-19 August 2011. At the request of RGoB, GoI has agreed to the use of Dalu LCS (land custom station) and Ghasuapara LCS (both in Meghalaya) as additional exit/ entry points for Bhutan's trade with Bangladesh. Ghasuapara LCS will be used only as exit point for Bhutan for the present till the necessary infrastructure in place for it to be used as entry point also. In addition, 4 additional entry/ exit points for India-Bhutan bilateral trade – Upper Khogla (West Bengal), Dalmore or Birpara (West Bengal), Bokajuli (Assam) and Rangapani (Assam) – have also been agreed. GoI also agreed to open two alternate routes to industrial estates in the border towns of Phuentsholing (from Highway at Bolan Chaupati, near Mangalabari in Jalpaiguri district (WB) to Alay village at border near Toribari/ Pasakha industrial estate of Bhutan) and Samdrup Jongkhar (road from Bokajuli in Daranga (Assam) up  to Matanga industrial estate, Samdrup Jongkhar). Pursuant to these talks, GOI has issued notification allowing Bhutanese passengers duty free access at Indian airports, as well as exempting exports to Bhutan from any export bans in India on some essential items subject to limits.

Educational and Cultural Cooperation

There is close bilateral cooperation in the educational and cultural fields between India and Bhutan. India provides technical expertise and services of specialists to Bhutan in various fields.

Government of India's scholarships are granted to 85 Bhutanese students at undergraduate level and 77 at postgraduate level every year in Indian Institutions of higher learning.

ITEC /TCS of Colombo Plan (80 slots) training slots are provided to Bhutan every year.

Ambassador’s scholarships are granted to meritorious and deserving students for studies in India.

Ten Bhutanese students are admitted to Sainik schools in India and all expenditure is borne by the GOI.

During his visit to Bhutan, Prime Minister Dr. Manmohan Singh announced the government of India’s decision to institute a Nehru-Wangchuck Scholarship to encourage students from Bhutan to study in leading Indian universities and institutions. The scholarship has already been implemented.

A large number of Bhutanese students study in Indian schools and colleges on private basis. To facilitate this, the Education Consultants of India Limited held a seminar- cum-counselling Session in Bhutan in May 2007 for the benefit of Bhutanese students desirous of pursuing further studies in India. Bhutan's Sherubtse College is affiliated to Delhi University. About 30 India-based lecturers are posted to this College under the TCS of Colombo Plan.

Nehru-Wangchuck Cultural Centre: Dr. Karan Singh, President, Indian Council for Cultural Relations (ICCR), GoI, and Lyonpo Minjur Dorji, Minister for Home and Cultural Affairs, RGoB jointly inaugurated the “Nehru-Wangchuck Cultural Centre” at Thimphu on 21st September 2010.

India-Bhutan Foundation (IBF): India-Bhutan Foundation was established in August 2003 during the visit to India of the present King and the then Crown Prince with the aim to enhance people to people exchanges in the focus areas i.e. education, cultural exchanges and environment preservation. Ambassadors of Bhutan and India are the co-Chairpersons of India- Bhutan Foundation. GoI has contributed Rs 5 crore as main corpus amount for IBF with a matching contribution from RGoB. IBF supported in holding of the first ever seminar between India and Bhutan on the Gross Nation Happiness (GNH) from 11-12 March 2010 in Thimphu. The seminar was organized by the Centre for Bhutan Studies (CBS) and Seminar Education Foundation (SEF) of India. India-Bhutan Foundation also sponsored a Literary Festival “Mountain Echoes”, which was organized by ‘Siyahi’, a leading literacy consultancy in India in Bhutan from 17-20 May, 2010. This was the first ever India- Bhutan Literary Festival, in which leading authors, publishers and poets from both sides including renowned personalities such as Gulzar, Chetan Bhagat, Sanjay Hazarika, Patrick French etc participated. The Festival was inaugurated by Her Majesty, the Queen Mother, and Prime Minister of Bhutan Lyonchen Jigmi Y. Thinley delivered the key note address focusing on GNH. The second series of the Literary Festival “Mountain Echoes” was held in Bhutan from 20-24 May 2011. 22. The cooperation was not only limited to official exchanges between the two governments. The people-to-people contacts were also diversified. Annexure-IV provides details of important bilateral events and activities held in area of art and culture.

Election Commissions

The institutional cooperation has been formalised through signing of an MoU between the two Election Commissions during the visit of our Chief Election Commissioner in May 2006. Chief Election Commissioner of Bhutan visited India earlier in Feb 2006 and recently in January 2010 and May 2009. Several teams of officials from the Election Commission of Bhutan including Dzongdas (District Collectors) and Dzongkhag (district) officials have visited India to observe various state and local elections. India has extended full assistance to Bhutan in formulating its election laws.

Government of India also provided a grant of Rs 47.506 million to Royal Government of Bhutan to source electronic voting machines from India. Several Election Observers from India visited Bhutan during the National Council Elections and two rounds of mock elections. Government of India also provided helicopters during the National Council elections to transfer election officials and equipment to remote areas.

MOU for cooperation between the Election Commissions of India and Bhutan was renewed during the visit to Bhutan by CEC D. S.Y. Quraishi. Chief Election Commissioner, Shri Navin Chawla visited Bhutan in October 2009. A four member delegation from the Election Commission of India led by Chief Election Commissioner, Shri N. Gopalaswami visited Bhutan to observe the National Assembly Elections in March 2008. Shri Shyam Saran, Special Envoy of Prime Minister and former Foreign Secretary, and Shri Salman Haider former Foreign Secretary visited Bhutan as Election Observers from the GoI in March 2008.

The Government of India also facilitated holding of a workshop in Thimphu for senior bureaucrats in Bhutan on ‘Democratic Constitutional Monarchy’ with eminent civil servants from India acting as resource persons. Specific Election Coverage Training programmes were also organized for journalists from both public and privately owned media in Bhutan with the help of External Publicity Division which was well appreciated in Bhutan.

Interaction between the two Parliaments

The officials of the Bhutanese Parliament have been attending various training programmes conducted by the Bureau of Parliamentary Studies and Training (BPST) in the Indian Parliament. BPST has also organized Orientation Programmes for Members of the Bhutanese Parliament. Speaker of the Bhutanese Parliament Lyonpo Jigme Tshultim visited India during August-September 2008. During the visit, he extended an invitation to our Speaker to visit Bhutan. Speaker, Lok Sabha, Smt. Meira Kumar, led an Indian Parliamentary delegation to Bhutan from 26-29 May 2010. The delegation included the Leader of Opposition, Smt. Sushma Swaraj, Dr. (Kum). Girija Vyas, MP, Shri Vishwa Mohan Kumar, MP and Secretary General and other officials from Lok Sabha Secretariat. This was the first visit of an Indian Speaker to Bhutan. During the visit, it was agreed to constitute a Parliamentary Friendship Group to promote regular exchange of Parliamentarians from both the sides. The speaker attended the opening ceremony of the 5th session of Parliament of Bhutan and addressed the Joint Session of Parliament. Both sides agreed to sign an MOU on Parliamentary cooperation. Parliamentary Friendship Groups have been formed in the Parliaments of both countries. Bhutanese Speaker visited India from 9-12 July 2011 for SAARC Speaker's Conference. An MOU between the two Parliaments has been signed between the two sides during the visit of Bhutanese Speaker to India from 23-26 Nov 2011.

Prime Minister's Modi's 2014 visit

The present Indian Prime Minister Mr. Narendra Modi chose Bhutan as his first foreign destination, placing regional co-operation before global co-operation. He had inaugurated the Supreme Court Complex in Bhutan and also promised help to Bhutan on IT and digital sector.

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