The history of India-Bhutan relations dates back to 747 AD, when Padmasambhava, a Buddhist monk, traveled from India to lead the Nyingma school of Buddhism in Bhutan. Since Bhutan became a protectorate of British India in 1910, allowing the British to "guide" its foreign policy and defense, India and Bhutan have maintained diplomatic relations. Bhutan was one of the first countries to recognize India's independence in 1947. With the establishment of an Indian permanent representative in Thimphu in 1968, diplomatic ties were established between India and Bhutan. Prior to this, India's Political Officer in Sikkim handled relations with Bhutan.
Significance of Bhutan to India
Buffer state: Bhutan serves as a barrier between China and India. Bhutan and China share 470 km of border. So Bhutan avoids direct conflict between China and India in these areas.
Strategic importance: The Chumbi Valley is 500 km from the "Chicken's Neck" in North Bengal, which connects the northeast with the rest of the nation, and sits at the intersection of Bhutan, India, and China.
Insurgency: In order to curb the insurgency in the Northeast, Bhutan has previously worked with India to drive out extremist organizations such as the National Democratic Front of Bodoland (NDFB) and the United Liberation Front of Assam (ULFA) from the country in the Himalayas.
Trade ties: Bhutan's biggest trading partner is India. Bhutan's overall trade in 2020 was made up of 82.6% bilateral trade. More than 77.1 percent of all imports into Bhutan come from India. Of Bhutan's entire exports, 90.2% came from shipments to India. The revised bilateral agreement between Bhutan and India on trade, commerce, and transit came into effect in 2017 and has a ten-year validity duration.
Development Cooperation: Since Bhutan started its Five Year Plans in the early 1960s, India has been contributing financially to the nation's socio-economic development. The main development partner of Bhutan remains India.
India's 4500 crore contribution will make up 73% of Bhutan's total foreign grant component for the 12th Five Year Plan.
Hydropower Cooperation: India is now receiving electricity from four hydroelectric projects (HEPs) in Bhutan, which have a combined capacity of 2136 MW.
The intergovernmental modes of 720 MW Mangdechhu, 1200 MW Punatsangchhu-I, and 1020 MW Punatsangchhu-II are currently undergoing varying levels of execution. 2020 saw the signing of the concession agreement for the 600 MW Kholongchhu Joint Venture Hydroelectric Power Project.
Multilateral Cooperation: Both are members of several regional associations, including the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
Recent Developments in Cooperation Initiative: As part of India's Vaccine Maitri, Bhutan was the first nation to receive COVID-19 vaccinations.
Financial Connectivity: India and Bhutan now have better financial connectivity thanks to the introduction of the BHIM app and RuPay card.
Start-Up Ecosystem: To promote creativity and entrepreneurship, India and Bhutan have linked their start-up systems through organized workshops.
E-Library Project: Between the two nations, the E-Library project has aided in knowledge exchange and education.
Challenges in the Relation
Security worries: Because the China-Bhutan border negotiations touch on a trijunction close to the vital Siliguri Corridor, which links India's northeast with the rest of the nation, security worries are being raised for India.
Bhutan may join the Belt and Road Initiative (BRI): Given Bhutan's strategic location, India's concerns about the BRI and its effects on the region—particularly with regard to sovereignty and debt implications—could lead to conflict.
Economic Diversification: From Rs 200 crore in 2020 to Rs 1,500 crore in 2022, China's exports to Bhutan have grown. The Motor Vehicle Agreement for Bangladesh, Bhutan, India, and Nepal (BBIN): Citing environmental concerns, Bhutan refrained from ratifying the accord.
Due to its high unemployment rate and national debt, Bhutan may be able to enter China, which is not in India's best interests.
The Bhutanese Parliament's Upper House made the decision to withdraw from the Bangladesh-Bhutan-India-Nepal (BBIN) connectivity initiative. The Bhutanese are afraid that the deal's execution will result in an invasion of foreign cars that will negatively affect their own transportation industry and degrade the environment.
Issue of Refugees: These are refugees who, during Bhutan's absolute monarchy in the late 1980s and early 1990s, staged protests calling for multi-party democracy. The Bhutanese army labeled them anti-nationals and drove them out. They sought safety in India and Nepal. The government of Nepal has repeatedly been asked by Bhutanese refugees to assist them in returning home, but India is wanted to assist by both Nepal and the international community. However, Bhutan is hesitant to send refugees back home due to the potential demographic effects. India has remained neutral on the matter in light of Bhutan's strategic significance.
Autonomy issues: There is a perception that India has occasionally interfered with domestic matters in Bhutan. Bhutanese people now have a bad opinion of India as a result of this.
Hydropower issue: Since India is obtaining Bhutan's excess electricity at comparatively low prices, there is a growing perception in Bhutan that India's growth of Bhutan's hydropower production is motivated by self-interest.
Way Forward
Diplomacy and Engagement: To better comprehend Bhutan's changing foreign policy objectives and concerns, India might hold regular high-level discussions with it. In order to prevent Bhutan from viewing India as a danger, India should keep up its support for Bhutan's independence and take care of its developmental needs.
Increased Economic Assistance: In order to keep Bhutan out of China's debt trap, India can provide Bhutan with increased trade advantages, infrastructure development, and economic assistance.
Building Military connections: To protect security and fend off possible Chinese influence, India should concentrate on clearing up any obstacles in its relationship and fortifying its defense and security ties with Bhutan.
Cultural exchange: To encourage a deeper understanding and enjoyment of one another's literature, art, music, and culture, India and Bhutan might support cultural exchange initiatives.
Sub-regional cooperation can be strengthened if citizens of both nations are able to travel without a visa.
Note for UPSC Aspirants: For UPSC aspirants interested in exploring further, here are some keywords to guide your research: BBIN, SAARC, BIMSTEC, International Relations, India-ASEAN, BRICS, Belt and Road Initiative, Nine-dash Line, East Asia Summit, Nuclear Suppliers Group (NSG).
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