Embassy of India
Thimphu
India’s Development Partnership with Bhutan
India’s development support to Bhutan is an important pillar of our close and enduring ties. Over the past five decades since Bhutan’s first plan commencing in 1961, India's development support has helped advance Bhutan's developmental parameters significantly, and the Kingdom graduated from Least Developed Country (LDC) to Middle-Income Country (MIC) status in December 2023. The development partnership is largely governed by the overarching mechanism of bilateral Development Cooperation Talks or Plan Talks co-chaired by the Foreign Secretaries wherein the two sides jointly decide the quantum, composition, and modalities of the various components of support. In addition to the plan assistance support, GoI has provided financing support for construction of hydropower projects, which is considered a strategic resource by Bhutan. Since 2023, GoI has also provided financial support to Gyalsung Infrastructure, which is outside the plan framework.
- 12th Five Year Plan (2018-2023): For the 12th Five Year Plan from November 2018 - October 2023, GoI committed an amount of INR 5000 Crores. A total of 83 Project Tied Assistance (PTA) projects and 524 High Impact Community Development Projects (HICDP) were undertaken during this period through 100% grant. A few major projects may be seen below:
(I) Gyaltsuen Jetsun Pema Wangchuck Mother and Child Hospital, Thimphu (inaugurated in March 2024)
(II) Pemagatshel Dzong (consecrated in September 2023)
(III) Jigme Singye Wangchuck School of Law (inaugurated in October 2023)
(IV) Wangduephodrang Dzong (consecrated in November 2022)
(V) Cattle Breeding Centre (inaugurated in September 2022)
(VI) Diana Kuenphen Bridge (inaugurated in September 2023)
(VII) Thimphu Aquatic Centre (inaugurated in May 2024)
(VIII) Pangrizampa Bridge (inaugurated in December 2024)
(IX) Dhamdum Industrial Park (inaugurated in February 2025)
(X) Infrastructure Development at Royal University of Bhutan (RUB) colleges
(XI) Broadcast Infrastructure for High-Definition Service of Bhutan Broadcasting Service (launched in July 2023)
- 13th Five Year Plan (2024-2029): During Prime Minister Shri Narendra Modi’s state visit to Bhutan in March 2024, GoI announced development support of INR 10,000 Crores for the 13th FYP period. Of this, INR 7,000 Crores has been earmarked for Project Tied Assistance (PTA) projects, INR 1,000 Crores for High Impact Community Development Projects (HICDP), INR 1,500 Crores for RGoB’s Economic Stimulus Programme (ESP) and INR 500 Crores for Programme Grant.
- The first tranche of 61 projects under PTA, amounting to about INR 5000 Crores, was agreed between the two sides during the Plan Talks held in July 2024 . The projects under implementation cover areas such as agriculture, irrigation, ICT, health, education, scholarships, capacity and human resources development, infrastructure development, energy, and urban development.
- During the first HICDP Committee Meeting held in December 2024, a total of 283 projects of amount INR 417 Crores were approved by both governments and have commenced implementation. HICDPs, also known as Small Development Projects (SDP), are short-gestation projects mainly in areas such as drinking water supply networks, irrigation canals, farm roads, basic health units, and other rural infrastructure. The Programme Grant (PG) component is a direct budgetary support to Bhutan.
- The ESP is a INR 1,500 Crores programme launched by the Royal Government of Bhutan in May 2024 with the objective to reinvigorate the domestic economy through strategic interventions in the form of fiscal and monetary measures in priority sectors such as agriculture and livestock; cottage and small industries; tourism; start-ups; creative industry; skill development; all of which have an immense impact on the lives of the people. The Royal Government has also created a separate Secretariat to ensure the programme’s effective execution through continuous review and monitoring. Earlier during the 11 th Plan, GoI had provided a total of INR 500 Crores to RGoB for a similar ESP.
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February 2025
