India-Bhutan Development Cooperation Talks

The India-Bhutan Development Cooperation Talks were held to review the full spectrum of India-Bhutan development partnership.

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Context

  • Recently, the India-Bhutan Development Cooperation Talks were held to review the full spectrum of India-Bhutan development partnership. 

More on the news

  • A total of 10 projects, covering sectors such as healthcare, connectivity and urban infrastructure in Bhutan, were approved.
  • India has committed support of 10,000 Crore (100 billion) for Bhutan’s 13th Five Year Plan period (2024-2029).
  • The two sides agreed to hold the next Development Cooperation Talks in Thimpu.

India-Bhutan Relations

  • The basic framework of India- Bhutan relations has been the Treaty of Friendship and Cooperation signed in 1949.
  • The treaty was revised in 2007 giving Bhutan more autonomy while reaffirming mutual respect for sovereignty and close cooperation.

Trade Relations

  • Since 2014, India’s trade with Bhutan has almost tripled from USD 484 million in 2014-15 to USD 1615 million in 2022-23.
  • 2016 India-Bhutan Agreement on Trade, Commerce and Transit, establishes a free trade regime between the two countries and also provides Bhutan duty free transit of goods to/from third countries.

Energy Cooperation

  • India has constructed 4 major HEPs in Bhutan: Chukha (336 MW), Kurichhu (60 MW), Tala (1020 MW), Mangdechhu (720 MW).

Diaspora

  • About 50,000 Indians are presently working in Bhutan in the sectors such as infrastructure development, hydropower, education, trade and commerce signifying close people to people ties between the two nations.

Bhutan Significance for India

  • Bhutan works as buffer against China expansionist policy.
  • India sees Bhutan as vital to maintaining a South Asian balance of power and resists Chinese strategic encroachment, especially near the tri-junction.
  • Bhutan is central for India’s Neighbourhood First Policy.
  • Bhutan is crucial for India’s Act east policy as its location is strategic to siliguri corridor, India’s chicken Neck.

Conclusion

  • While India and Bhutan share a strong foundation of trust and cooperation, evolving economic aspirations, geopolitical realities in both countries pose challenges.
  • Managing these with respect, transparency, and strategic sensitivity is key to sustaining their special relationship.
  • India–Bhutan relations are a model of good-neighbourly partnership based on mutual trust and benefit. 


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