Bhutan-India Bilateral Relation

What’s in Today’s Article?

• Why in the News?
• India – Bhutan Bilateral Relationship
• Trade & Economic Ties
• Cultural & Buddhist Links
• Hydropower Cooperation
• New Areas of Cooperation
• Indians Working in Bhutan
• Educational, Cultural Cooperation and People-to-People Exchanges

Why in the News?

Prime Minister Narendra Modi on March 22, 2024, arrived in Paro, Bhutan for a 24-hour State visit.

India – Bhutan Bilateral Relationship

• India and Bhutan share unique and exemplary bilateral relations, which are based on mutual trust, goodwill and understanding.
• Formal diplomatic relations between India and Bhutan were established in 1968.
• The basic framework of India-Bhutan relations is the Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was renewed in 2007.

Trade & Economic Ties

• The India-Bhutan Agreement on Trade, Commerce and Transit – was first signed in 1972.
• The agreement establishes a free trade regime between the two countries.
• India is Bhutan’s top trade partner both as an import source and as an export destination.
• Since 2014, India’s merchandise trade with Bhutan has almost tripled from USD 484 million in 2014-15 to USD 1422 million in 2021-22.
  • It accounting for about 80% of Bhutan’s overall trade, with the balance of trade in India’s favour.

Cultural & Buddhist Links

• A number of Bhutanese pilgrims travel to Bodh Gaya, Rajgir, Nalanda, Sikkim, Udayagiri, and other Buddhist sites in India.
• As a part of the 50th anniversary celebration of diplomatic relations, GOI sponsored a visit by 18 Lam Netens (Buddhist monks) and representative of the Central Monastic Body of Bhutan to India.

Hydropower Cooperation

• Mutually beneficial hydro-power cooperation with Bhutan is a key pillar of bilateral economic cooperation.
• For Bhutan, hydro-power development continues to be a vital catalyst for socio-economic development.
• Revenues from Hydropower constitutes a significant portion of the total revenues of the Royal Government of Bhutan.
• The ongoing cooperation between India and Bhutan in hydro-power sector is covered under the 2006 bilateral agreement for cooperation and its Protocol signed in 2009.
• Four hydro-electric projects (HEPs) totalling 2136 MW are already operational in Bhutan and are supplying electricity to India.
• The 720 MW Mangdechhu was commissioned in August 2019 and handed over to Bhutan in December 2022.

New Areas of Cooperation

• Apart from hydro-power cooperation and development partnership has moved into new and emerging areas with full interoperability of the flagship digital project RuPay, which has been successfully completed.
• Bhutan became the second country to launch the BHIM app, further deepening the financial linkages between our two countries.
• Space cooperation is a new and promising area of bilateral cooperation.
• The India-Bhutan SAT was launched into space in November 2022 by ISRO's Polar Satellite Launch Vehicle (PSLV).
• Inauguration of Ground Earth Station during visit of Chairman, ISRO also took place in March 2023.

Indians Working in Bhutan

• About 50,000 Indian citizens are working in Bhutan, mainly in the construction sector, education and technical consultants involved in infrastructure projects.
• Some Indian daily-workers also enter and exit Bhutan every day in the border towns, as a sign of the close economic interdependence between both countries.

Educational, Cultural Cooperation and People-to-People Exchanges

• There is close bilateral cooperation in the educational and cultural fields between India and Bhutan.
• Over 950 scholarships are being provided annually by GoI for Bhutanese students to study in India in a wide range of disciplines including medicine, engineering, etc.
• It is estimated that approximately 4,000 Bhutanese are studying in undergraduate courses in Indian Universities on self-finance basis.
• Under the Nehru Wangchuck Scholarship Scheme since its inception in 2010, 8 slots are annually allotted to students and scholars from Bhutan.
• 20 slots are provided every year to students from Bhutan under the ICCR Scholarship.

PM Modi's State Visit to Bhutan

• Prime Minister Narendra Modi on March 22, 2024, arrived in Paro, Bhutan for a 24-hour State visit.
• PM Modi will receive Bhutan’s highest civilian award, the Order of the Druk Gyalpo.
• This is PM Modi’s first visit since the award was announced in 2021, which will be presented Bhutan’s King Jigme Khesar Namgyel Wangchuck, in appreciation for his efforts towards strengthening India-Bhutan ties.

Q1) What do you mean by Chicken’s Neck in terms of India’s geographical area?

The Siliguri Corridor, also known as the Chicken's Neck, is a stretch of land around the city of Siliguri in West Bengal, India. 20–22 kilometers (12–14 mi) at the narrowest section, this geo-political and geo-economic corridor connects the seven states of northeast India to the rest of the country.

Q2) Where is Doklam located?

Doklam is an area with a plateau and a valley which lies on the Bhutan-China border, near India.

Source: PM Modi arrives in Paro, to receive Bhutan’s highest civilian award | MEA