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Bhutan-India Relations

GS 2 India & Foreign Relations

In News

  • During Bhutanese Monarch Jigme Khesar Namgyal Wangchuck’s recent visit, India announced a number of measures to support Bhutan’s development plans.

India-Bhutan Bilateral Relations:

Bhutan shares its border with four Indian states

  •  With a length of 699 kilometres, Assam, Arunachal Pradesh, West Bengal, and Sikkim serve as a buffer between India and China.

Treaty of Friendship and Cooperation

  • The 1949 Treaty of Friendship and Cooperation between India and Bhutan laid the foundation for bilateral relations between the two countries.
  • It demanded harmony between the two countries and non-interference in each other’s internal affairs. In 2007, the Treaty was revised.
  • However, Bhutan consented to allow India to direct its foreign policy, and both nations agreed to engage in close consultations regarding foreign and defence affairs.

Diplomatic relations

  •  Diplomatic relations were established in 1968 when a special office of India was established in Thimphu.

Institutional mechanisms

  •  Institutional and diplomatic mechanisms exist between India and Bhutan in the areas of security, border management, trade, transit, economic, hydro-power, development cooperation, and water resources, among others.

India has constructed three Hydroelectric Projects (HEPs) in Bhutan

  • Chukha HEP, Kurichhu HEP, and Tala HEP are operational and exporting surplus electricity to India.
  •  India recently concluded the 720 MW Mangdechhu Hydroelectric Power Project, and both countries are working to expedite the completion of other ongoing projects, such as the 1200MW Punatsangchhu-1 and 1020MW Punatsangchhu-2.


  • The India-Bhutan Trade and Transit Agreement of 1972 governs trade between the two countries.
  • India is Bhutan’s main trading partner.

Maitri Initiative

  • Bhutan is the first nation to receive Covishield vaccines under the Vaccine Maitri Initiative in India.

Recently announced cooperation plans:

Credit facility

  • Bhutan will be removed from the list of Least Developed Countries in 2023, and its 21st century Economic Roadmap seeks to transform the Himalayan kingdom into a developed nation with a per capita income of $12,000 over the next decade.
  • Additionally, India has consented to provide Bhutan with a third additional standby credit facility.


  •  Hydropower, the “cornerstone” of India-Bhutan relations, received a boost when the government agreed to consider Bhutanese requests to expedite long-delayed projects (Sankosh and Punatsangchhu).
  •  A request was also made to increase the tariff on the earliest project, Chhukha, and to purchase electricity from the Basochhu power project.

Infrastructure projects

  • New infrastructure initiatives include
  • an integrated checkpoint for trucks at Jaigaon,
  • a checkpoint for nationals of third countries, and
  • a cross-border rail link between Kokrajhar and Gelephu.

Skilling investments

  • Indian businesses are eager to invest in Bhutan in the areas of skill development and training, education, and digital technology.

Future potential

  • Future partnerships could include space research, skilling, startups, STEM education, and a new Internet gateway for Bhutan, in accordance with the new “Transform Initiative” of the Bhutanese monarch.


Buffer between India & China

  • Bhutan’s frontier with India is over 600 kilometres long, and it acts as a buffer between China and India by safeguarding India’s chicken neck corridor.
  • The Siliguri Corridor, also known as Chicken’s Neck, is a 22-kilometer-long narrow strip of territory in the Indian state of West Bengal. It connects India’s north-eastern states to the rest of the country, with Nepal and Bangladesh on either side of the corridor.

Hydroelectricity & revenue generation

  • Bhutanese rivers that flow into India from the Himalayas have been utilised for hydroelectric power generation.
  •  Under cooperative agreements, India purchases power generated in Bhutan.
  • Hydroelectricity is now one of Bhutan’s largest sources of revenue, making Bhutan the country with the highest per capita income in South Asia.

National treatment

  • Bhutanese citizens continue to receive the same “national treatment” as Indian citizens in India.

Challenges :

Bhutan’s issue of brain drain

  • As youth unemployment reaches 21% in 2021, the Bhutanese government is concerned about the number of Bhutanese who migrate abroad.
  • India must pay more attention to this brain drain, as Bhutan’s elite were educated in India in the past. • India stands to lose its edge in Bhutanese policy making and public discourse, so the initiatives outlined will benefit both Delhi and Thimphu in retaining talent.

China factor

  • China has spent decades attempting to establish a foothold in Bhutan. Where Bhutan determines its boundary with China (to the west) is of utmost importance to India, as this is the tripoint where the three nations meet.
  • China has proposed this demarcation as part of a “package deal” with Doklam, a strategically sensitive region near the trijunction with India and the Siliguri corridor in India.
  • While Bhutan is explicit that all discussions regarding the trijunction will be “trilateral,” India’s concerns extend to any change in the area surrounding the trijunction; therefore, the issue requires complete clarity.

Negative sentiments

  • Many negative sentiments and false information about India are prevalent on social media in Bhutan. Some Bhutanese believe that India is using security concerns as a pretext to maintain control over Bhutan.
  • China employs a variety of tools, instruments, and strategies to attract Bhutanese citizens, including trade, contemporary cities, and scholarships.

Way ahead

  •  India must not allow hyper-nationalism and its rivalry with China to pressure Bhutan.
  •  India’s time-tested ties with Bhutan have been predicated on counting each country’s prosperity as a win-win for both.
  • The Bhutan-India relationship has survived primarily because it is based on mutual trust, and India must maintain this relationship not just economically or through a transactional relationship.


Daily Mains Question

[Q] Discuss the significance of India and Bhutan’s bilateral relations. What are the obstacles? And how can this partnership be enhanced beyond transactional relationships?