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India-Bhutan Relations
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Embassy of India

Thimphu
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India -Bhutan relations

Diplomatic relations between India and Bhutan were established in 1968 with the establishment of a Special Office of India in Thimphu. The basic framework of India- Bhutan bilateral relations was the Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was revised in February 2007.

2. The traditionally unique bilateral relations, characterized by trust and understanding, have been sustained by a tradition of regular high-level visits between the two countries. Prime Minister Tshering Tobgay attended the swearing-in ceremony of Prime Minister Modi in 2014. India was the first country of visit (27-29 December 2018) by the newly elected Prime Minister Lotay Tshering (PMLT) after the Bhutanese elections. PMLT again visited India on 30-31 May 2019 to attend the swearing-in of the newly elected Indian government. His Majesty The King of Bhutan last visited India on 17 August 2018 to attend the state funeral of the former Indian PM Shri Atal Bihari Vajpayee. Around 40 high-level visits have taken place between India and Bhutan since 2014.

3. His Majesty The King of Bhutan conferred the Order of the Druk Gyalpo (Ngadag Pel gi Khorlo), Bhutan’s highest civilian decoration, on Prime Minister Narendra Modi during Bhutan’s 114th National Day celebrations on 17 December 2021. The award recognizes the Prime Minister’s outstanding contribution to strengthening India-Bhutan friendship. Prime Minister Modi is the first foreign national to be given the prestigious award by His Majesty the King of Bhutan.

4. Bhutan was Prime Minister Narendra Modi’s first overseas visit shortly after becoming the Prime Minister of India post the 2014 General Elections. Shortly after his re-election in 2019, Prime Minister Shri Narendra Modi undertook a State Visit to Bhutan on 17-18 August 2019, during which he met His Majesty the King, the Fourth King and the Prime Minister of Bhutan and comprehensively reviewed all aspects of the bilateral relationship. PM Modi and Prime Minister Lotay Tshering (PMLT) expressed satisfaction at the excellent state of bilateral ties, which are based on mutual trust and respect, and underpinned by shared historical, cultural, economic, developmental and people-to-people linkages.

Assistance during the Covid-19 Pandemic

5. Bhutan was the first country to receive the Made in India Covishield vaccines under Ministry of External Affairs Vaccine Maitri Initiative. The first consignment of 150,000 vaccines was gifted on January 20, 2021. On March 22, 2021, the Government of India gifted a second consignment of 400,000 doses of the ‘Made in India’ vaccines to the Royal Government of Bhutan in keeping with the uniquely close and friendly relations between both countries. The total number of 550,000 doses of Covishield were given to Bhutan on a grant basis. In addition to 02 consignments of vaccines, the Government of India has delivered 11 medical consignments to Bhutan containing essential medicines including Paracetamol, Cetrizine, Hydroxychloroquine and medical equipment including PPE kits, N95 masks, RT-PCR test kits and 07 portable digital x-ray machines to Bhutan.

Developmental cooperation

6. Over the past decades, India has contributed significantly to the socio-economic development of Bhutan while respecting the priorities and needs of the Government of Bhutan and the people of Bhutan. India’s development assistance to Bhutan is largely governed by the overarching mechanism of Bilateral Development Cooperation Talks or Annual Plan Talks wherein the components of assistance and modalities are decided jointly by both sides. India has committed an assistance package of INR 4500 crores to Bhutan for the 12th Five Year Plan (FYP), comprising INR 2800 crores for Project Tied Assistance (PTA), INR 850 crores for High Impact Community Development Projects (HICDPCs/erstwhile Small Development Projects), and INR 850 towards Program Grant/Development Subsidy. Under the 12th Five Year Plan , India is implementing 82 PTA Projects and 524 HICDPs in Bhutan. In addition, India has also committed INR 400 crores towards Transitional Trade Support Facility and INR 100 crores towards Tariff Adjustment of Mangdechhu Hydro Project.

7. The key areas of focus of India’s assistance continue to be those that have a direct bearing on the lives of the common people. The scope of PTA projects range from agriculture to irrigation, ICT, media, health, tertiary education, school education, scholarships, labour and human resource development, roads, energy, urban development, judiciary, culture, constitutional offices and media. The HICDPs include projects with short gestation period, and cover areas like the development of drinking water supply networks, irrigation canals, building of farm roads, basic health units and other rural infrastructure. The Programme Grant component is a direct budgetary support to Bhutan and is in the nature of untied grant assistant to Bhutan.

Hydro-power cooperation

8. Hydro power cooperation is the most important symbol of the symbiotic cooperation between the two countries. Till date the Government of India has constructed four major hydro-electric projects (HEPs) in Bhutan totaling 2136 MW, including 336 MW Chukha HEP, 60 MW Kuricchu HEP, 1020 MW Tala HEP and the recently commissioned 720 MW Mangdechhu HEP. Currently, there are two HEPs under construction: 1200 MW Punatsangchhu–I HEP and 1020 MW Punatsangchhu–II HEP. The Concession Agreement for the Joint Venture Kholongchu project in East Bhutan was signed in June 2020. The project is underway and is expected to be completed in 2026.

Cooperation in New and Emerging Areas

9. Space cooperation is a new and promising area of bilateral cooperation. On 17 August 2019, PM Modi and PMLT jointly inaugurated the Ground Earth Station of the South Asia Satellite in Thimphu, which was constructed with the support of ISRO. The SAS was launched by India in 2017 as a gift to the countries in the South Asia region, including Bhutan. Recognizing the positive impact that the South Asia Satellite would have on the socio-economic development of Bhutan in areas such as communication, television broadcasting, disaster management, meteorological services as well as emergency medical services, PM Modi had offered increased bandwidth on an additional transponder as a gift to the people of Bhutan.

10. Pursuant to the India-Bhutan Joint Statement of the state visit of the Prime Minister of India to Bhutan in August 2019 where both India and Bhutan agreed to collaborate on the joint development of a small satellite for Bhutan and the Memorandum of Understanding between India and Bhutan on cooperation in the peaceful uses of outer space signed on November 19, 2020, ISRO and the Department of Information and Technology (DITT) are currently collaborating on the joint development of a small satellite for Bhutan with the intention of sharing knowledge on building and operating a small satellite. The Implementing Arrangement for the Joint Development of a small satellite was signed on September 24, 2021. A team of four Bhutanese space engineers is currently in India for Phase II of the training which involves testing of Bhutan’s payload and its final assembly into the main satellite. The satellite itself is slated for a launch in the first half of 2022.

11. Fin-tech is another new domain of collaboration between India and Bhutan. In November 2019, India launched the first phase of the RuPay project in Bhutan which allowed Indian tourists to make cashless payments at ATMs and POS terminals in Bhutan. November 2020 witnessed the virtual launch of the Phase II of the RuPay Card which will allow Bhutanese banks to issue Rupay cards that can be used across the length and breadth of India, thus completing the full inter-operability of the flagship digital project. Building on the success of the RuPay project in Bhutan, BHIM UPI was launched in Bhutan on July 13, 2021 thereby enabling Indian nationals to make cashless payments in Bhutan and further deepening the financial and economic linkages between the two countries.

12. The integration of Bhutan’s DrukRen with India’s National Knowledge Network is a key cooperation in the domain of e-Learning. This integration creates an information highway between the universities, research institutions, libraries, health-care and agricultural institutions of the two nations. The network is being actively used by 28 active DrukREN members including the top universities, colleges and hospital in Bhutan and is benefitting more than 6000 users.

13. The E-library project complements Bhutan's efforts at digital transformation and e-learning. The project commenced its work in September, 2016 and was handed over to the Ministry of Education on June 26, 2020. The project includes the development of an e-library portal, establishment of a data centre in Thimphu Tech Park, creation and management of e-content and the creation of e-libraries in 49 schools and 12 colleges in each district of Bhutan. The e-library project is presently benefiting 160,000 high-school students and 9800 college-going students.

Commerce and Trade

14. India has consistently been Bhutan’s top trading partner. Since 2014, India’s trade with Bhutan has more than doubled from USD 484 million in 2014-15 to USD 1083 million in 2020-21, accounting for over 85% of Bhutan’s total trade, with the balance of trade in India’s favour. The trade between the two countries is governed by the India-Bhutan Agreement on Trade, Commerce and Transit – which was first signed in 1972 and revised most recently for the fifth time in 2016. This Agreement establishes a free trade regime between the two countries and also provides for duty free transit of Bhutanese exports to third countries. India is the leading source of investments in Bhutan, comprising 47% of the country’s total FDI. There are over 40 Indian companies in Bhutan operating primarily in the hydropower, financial, manufacturing, IT and other services sectors.

15. The last India-Bhutan Commerce Secretary level meeting was held in New Delhi on 03 November 2021. The Indian delegation was led by Shri B.V.R. Subrahmanyam, Commerce Secretary and the Bhutanese delegation was led by Dasho Karma Tshering, Economic Affairs Secretary. During the meeting, the two sides exchanged letters to formalize seven additional entry/exit points for trade between India and Bhutan, viz. (i) Nagarkata Land Customs Station; (ii) Agartala Land Customs Station; (iii) Pandu port; (iv) Jogighopa port; (v) Asian Highway 48 connecting Torsha Tea Garden in India and Ahllay in Bhutan; (vi) Kamardwisa; and (vii) Birpara.

16. The Minister of Economic Affairs of Bhutan Lyonpo Loknath Sharma visited New Delhi in January 2022 and held meetings with Union Minister of Commerce & Industry Shri Piyush Goyal as well as with Union Minister of Power Shri R.K. Singh to discuss issues of mutual bilateral interest and ways to further increase trade and commercial ties between the two countries.

17. Government of India has collaborated on a number of initiatives for strengthening the startup eco-system in Bhutan, at various levels. The Indian Embassy had organised the first ever Bhutan-India Startup Summit from 28-29 February 2020 in Thimphu, during which Bhutanese startups exchanged ideas and knowledge with top Indian industry representatives. The Indian Embassy – in collaboration with Invest India and knowledge partner TiE (The Indus Entrepreneurs) Delhi-NCR – organised a virtual startup mentorship program titled ‘Ignite’ for over 150 Bhutanese entrepreneurs from October to January 2022. GoI sponsored the virtual training of Bhutanese entrepreneurs at the Entrepreneurship Development Institute of India (EDII), Gandhinagar in July-August 2021 on upskilling on impact enterprises and developing a cadre of mentors/counsellors on entrepreneurship. Senior dignitaries and startups from Bhutan participated in GoI’s flagship event – the Startup India International Summit ‘Prarambh’ – held virtually from 15-16 January 2021, to step up cooperation among startups and entrepreneurs particularly from the BIMSTEC region.

Education

18. Many Bhutanese students benefit from scholarships provided by the GOI for study in Indian universities. In addition, many Bhutanese youth also enrol as self-financed students in Indian universities. It is estimated that approximately 4000 Bhutanese are studying in Indian Universities at any time. During the State visit of Prime Minister of India to Bhutan, 4 MOUs on cooperation in STEM Education were signed between the Royal University of Bhutan and the Indian Institutes of Technology at Delhi, Bombay, Kanpur and the National Institute of Technology, Silchar.

19. The current offers from India to Bhutan in terms of Scholarship Schemes such as the well-known Ambassador’s Scholarship, prestigious Nehru Wangchuck Scholarship, Five-Year Plan project-tied assistance based Undergraduate Scholarship, Nalanda University Scholarship and other scholarships such as ICCR Undergraduate Engineering scholarships, AYUSH scholarships, AYUSH (BIMSTEC) scholarships and SAARC scholarships have provided a strong foundation to the bilateral engagement in education. The latest additions to the list of Scholarships for Bhutanese nationals are the India-Bhutan Friendship Scholarship, IIT Gandhinagar Global Fellowship and the Rashtriya Raksha Unviersity Scholarships. Every year, around a 1000 Bhutanese students studying in Indian colleges and institutes benefit from the award of the Ambassador’s Scholarship, which was first instituted in 2001.

Cultural and Buddhist links

20. 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, Government of India sponsored a visit by 18 Lam Netens (Buddhist monks) and representative of the Central Monastic Body of Bhutan to India. His Holiness the Je Khenpo (the head monk of Bhutan) visited Rajgir in November 2018 to preside over the Salang or ground breaking ceremony to construct a Bhutanese Lhakhang (temple) and for World Peace Prayer in Rajgir in Bihar.

21. The Zhabdrung Statue, currently on display at the Simtokha Dzong in Bhutan, has been loaned by the Asiatic Society, Kolkata to the Royal Government of Bhutan. Dharma Raja or Zhabdrung, is the title of Ngawang Namgyal, a 16th century Buddhist monk – a revered figure in Bhutan, regarded as the founder of the modern nation state of Bhutan). On June 19, 2021, a subtle smiling 3.3 feet tall bronze cast statue of Lord Buddha in a lotus pose, commissioned by ICCR and weighing approximately 200 kgs, was handed over to the Royal Government of Bhutan, in the presence of Foreign Minister Tandi Dorji. On June 20, 2021, coinciding with the birth anniversary of Guru Padmasabhava, the statue was consecrated and enshrined at the grand Kuenray (sanctum sanctorum) of the Tashichodzong.

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January 2022

Key Visits from Indian Side to Bhutan (Since January 2018)

Sr. No.

Visit

Date

1

External Affairs Minister Dr. S. Jaishankar

7-8 June, 2019

2

Prime Minister of India Shri Narendra Modi

17-18 August 2019

3

Union Minister of Railways and of Commerce and Industry Shri Piyush Goyal

28-29 February 2020

Key visits from Bhutanese Side to India (Since January 2018)

Sr. No.

Visit

Date

1

Prime Minister Tshering Tobgay visited Assam, India.

1-4 February, 2018

2

Foreign Minister Damcho Dorji visited India.

20-23 February, 2018

3

Prime Minister Tshering Tobgay visited India.

5-7 July, 2018

4

His Majesty the King Jigme Khesar Namgyal Wangchuck visited India to attend the State Funeral of the former Prime Minister, Shri Atal Bihari Vajpayee.

17 August, 2018

5

Prime Minister Lotay Tshering undertook his first official visit to India

27-29 December, 2018

6

Prime Minister Lotay Tshering visited India to attend Swearing-in-Ceremony of PM Narendra Modi.

30 May-1 June, 2019

7

Foreign Minister Tandi Dorji visited India

17-23 November, 2019

8

Minister of Economic Affairs Lyonpo Loknath Sharma visited India

10-11 January 2022

 
 
 
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