Indian Prime Minister Narendra Modi’s recent visit showcased how important Bhutan is to India’s foreign policy. Modi received a warm welcome from Bhutan’s newly elected Prime Minister, Tshering Tobgay, during his visit. He later met with King Jigme Khesar Namgyel Wangchuck, who honoured him with the Order of Druk Gyalpo, making Modi the first foreign recipient of this prestigious award. Ahead of Bhutan’s January elections, the Bhutanese King visited India in November of the previous year, and shortly thereafter, announced plans for the development of a mindfulness city in Gelephu, located in southern Bhutan. This initiative aims to establish a special economic zone to attract investment and facilitate the country’s economic transformation efforts. In March, Prime Minister Tobgay visited New Delhi, where he held meetings with both the president and the prime minister. Modi’s subsequent visit to Bhutan shortly after reflects the commitment of both nations’ leadership to nurturing this highly significant foreign relationship.
The urgency of the visit and the important agreements reached there point to one key issue that dominated Modi’s talks with Bhutan: China. China’s booming economy and growing political muscle in recent decades have allowed it to challenge India’s long-held dominance in South Asia. With China’s economy now dwarfing India’s, it has far more financial power to wield in the region. Even before surpassing India economically, China had already been actively building economic partnerships in South Asia. As the world’s second-largest economy and a neighbour to the region, China’s economic clout in South Asia has become substantial and long-lasting.
China’s growing economic power allows it to use various methods to increase their influence abroad. They target elites in other countries and try to shape public opinion in their favor. This makes it difficult for smaller nations, especially those near China, to resist their pressure. Bhutan, a small country nestled in the Himalayas, is a prime example. Bhutan sits at a critical juncture where the borders of India, Nepal, and Bangladesh converge. Furthermore, China controls Tibet, which borders Bhutan to the west. The Chumbi Valley in Tibet sticks out like a dagger pointed directly at the narrow Siliguri Corridor, the sole land connection between India’s mainland and its northeastern states. This geographical predicament makes Bhutan particularly vulnerable to China’s influence.
Bhutan, a small Himalayan country with a population of less than 800,000, is looking to revive its tourism-dependent economy after the pandemic. The new leader, Tobgay, aims to attract foreign investment to create jobs and slow down youth migration. Bhutan has strong economic ties with neighboring India, which is a major donor and trading partner. To boost growth, Bhutan is looking to expand its airport and create a border economic zone in cooperation with India. India has also long been Bhutan’s security partner, and the recent visit by the Bhutanese king to India has further strengthened their political and economic relationship.
The Indian government, under Prime Minister Modi, is prioritizing a new approach to its neighbouring countries. This strategy involves offering deeper economic partnerships, treating neighbours as equals, and working together on security matters. Prime Minister Modi’s recent visit to Bhutan is a prime example of putting this strategy into action. The two countries issued a joint statement emphasizing their close relationship and commitment to working together on physical infrastructure and digital connectivity to boost economic ties. The joint statement reaffirmed India and Bhutan’s common pledge to work even more closely together, especially on clean energy projects, and to think and act together on ways to use energy more efficiently and to protect the environment. Additionally, they agreed to strengthen communication and collaboration on security issues.
India is a major supporter of Bhutan’s hydropower industry, having funded the construction of several hydropower plants in the country. These hydropower plants generate clean electricity, and some of it is exported back to India. The Chukha Hydropower Station, the first of these projects, was commissioned in 1986-1988 and has a capacity of 336 MW. Three more projects, Kurichhu, Tala, and Mandechhu, followed. A fifth project, Punatsangchhu II, is expected to be operational in 2024.
Bhutan is building a new city called Gelephu Mindfulness City (GMC) to address its high unemployment rate and emigration. The 1,000 sq km special economic zone aims to be carbon-negative and attract non-polluting industries, IT companies, hospitals, schools and resorts. Bhutan hopes that India will get involved by encouraging investment in the project and developing transportation links to the remote location in northeastern India. This would benefit both Bhutan by creating jobs and India by fostering development in the region.
During Prime Minister Modi’s visit. India and Bhutan signed a series of agreements to strengthen their relationship. One of these agreements ensures a steady supply of fuel and lubricants from India to Bhutan, with designated border points for easy transport. Another agreement simplifies trade by allowing both countries to recognize each other’s food safety certifications, saving time and money. Bhutan will also benefit from India’s expertise in energy efficiency through joint efforts to promote energy-saving practices in Bhutanese homes. To foster closer cultural ties, India and Bhutan will collaborate on sports programs and youth initiatives. Additionally, they agreed to share information and work together to regulate medications. Looking towards the future, they established a plan to expand cooperation in space exploration. They also renewed an agreement to improve internet connectivity between the two countries. Finally, both nations committed to building new rail lines connecting India and Bhutan.
India and Bhutan are working together to build a new railway line. This 58-kilometer rail link will connect Gelephu in Bhutan to Kokrajhar in the Indian state of Assam. This new land route is expected to be a major development for Bhutan. In the future, it could allow Bhutan to transport goods and people more easily to neighboring countries like Myanmar, Thailand, Cambodia, and even Singapore. This rail project is one of several infrastructure initiatives that India and Bhutan are discussing. The leaders of both countries may have also discussed India’s support for building an international airport in Gelephu.
Bhutan and China have engaged in discussions aimed at resolving their border dispute. While such diplomatic engagements are routine among nations, India maintains a keen interest in these developments, given the strategic implications, particularly regarding areas of mutual concern such as Doklam. India acknowledges Bhutan’s sovereign right to engage in bilateral discussions and respects its decisions. However, India values its historic friendship with Bhutan and emphasizes the importance of maintaining stability and security in the region. India remains committed to fostering strong bilateral ties with Bhutan, as evidenced by recent high-level exchanges between the two nations’ leadership. These interactions serve as a testament to the enduring bond between India and Bhutan, which continues to be guided by mutual respect and shared interests.
The Prime Minister’s visit to Bhutan resulted in a substantial increase in India’s aid for Bhutan’s 13th Five-Year Plan. India pledged to double its contribution to Rs 10,000 crore. As Bhutan’s biggest trading partner, India already invests heavily in Bhutan, contributing half of its foreign direct investment. The two countries further solidified their relationship by signing seven agreements covering diverse sectors like petroleum, trade, digital connectivity, space research, and agriculture. Discussions are also underway to establish railway connections between the two nations. Additionally, a joint statement on energy partnership was signed, highlighting their commitment to ensuring regional energy security.
Indian Prime Minister Narendra Modi’s recent visit to Bhutan marks a pivotal moment in the partnership’s futuristic vision. The warm reception and prestigious awards signify the deep-rooted ties between the two nations. Concrete plans for a mindfulness city, hydropower projects, railway connectivity, and economic cooperation demonstrate a commitment to mutual prosperity. Agreements on fuel supply, trade facilitation, energy efficiency, and cultural exchanges further strengthen this vision. India’s increased aid and strategic partnerships underscore a shared commitment to regional stability, economic growth, and sustainable development, cementing a robust and enduring relationship with Bhutan. The India-Bhutan partnership exemplifies a forward-looking approach that prioritizes collaboration, innovation, and shared prosperity in the years to come.
