India Bhutan Relations

Bhutan- India relations are governed by a friendship treaty (1949) that was renegotiated in 2007, freeing Thimphu’s external relations & arms import permission from Delhi, but still subjecting the Himalayan nation’s security needs to supervision.

Under the 2007 India-Bhutan Friendship Treaty, the two sides have agreed to “cooperate closely with each other on issues relating to their national interests” + Neither Government shall allow the use of its territory for activities harmful to the national security and interest of the other

India is Bhutan’s largest trading partner – Bhutan sources the majority of its import requirements from India.
One-third of Bhutan’s exports to India is electricity, highly valuable for India
Free trade regime between the two countries
India has been providing financial assistance to Bhutan’s five-year development plans since 1961

Hydro-electric power generated by Bhutan’s river dams is economic bedrock of the India-Bhutan relationship.

India has helped finance the dams through a combination of aid & loans and buys the excess electricity at very low prices.

Importance of Bhutan

Buffer state between India and china
Strategic Importance – Chumbi Valley is situated at the trijunction of Bhutan, India and China and is 500 km away from the “Chicken’s neck” in North Bengal, which connects the northeast with rest of the country.
Bhutan in past has helped India to contain insurgency in North-East by flushing out militants groups like NDFB & ULFA.
Only country in the region that joined India in its boycott of Chinese President OBOR project
China is interested in establishing formal ties with Thimphu, where it does not yet have a diplomatic mission. Bhutan is strategically important for both India and China.

Also read: India Japan Relations and India China Relations

BBIN Initiative

Bangladesh, Bhutan, India and Nepal (BBIN) motor vehicle agreement, for streamline movement of passenger and cargo transport, was rejected by the upper house of the Bhutanese Parliament.

Reasons Given

Streamline movement of passenger & cargo transport will overwhelm Bhutan with traffic, tourists & pollution.
BBIN MVA is not much of help to Bhutan in economic development as Bhutan’s trade is mostly with India & both nations already allow free movement of vehicles across their border.

Significance of BBIN for India

Significance for its neighbourhood diplomacy.
Would have paved the way for a seamless movement of people and goods across their borders for the benefit and integration of the region and its economic development.
India’s plan to single out Pakistan by implementing the pact has suffered a jolt by Bhutan rejection.

India has asked the Bhutanese government to reconsider the pact. However, the reconsideration can be done only after a year, as per the procedure there.For the time being, it has been decided that the pact will be implemented only amongst those countries which have ratified it- India, Bangladesh and Nepal.

✅ India–Bhutan Relations: 5 Key Points for UPSC

Time-Tested Friendship: India and Bhutan share a unique and enduring relationship, guided by the 1950 Treaty of Friendship, revised in 2007 to allow greater Bhutanese autonomy while maintaining close ties.
Economic and Developmental Assistance: India is Bhutan’s largest trading partner and provides extensive aid, including support for Bhutan’s Five-Year Plans and major infrastructure and hydropower projects.
Hydropower Cooperation: Hydropower is the cornerstone of economic ties, with India importing electricity from Bhutanese hydropower plants like Tala, Chukha, and Mangdechhu.
Strategic Importance: Bhutan holds strategic value in India’s Himalayan security architecture, especially near the Doklam tri-junction, which witnessed a standoff between Indian and Chinese forces in 2017.
Cultural and People-to-People Ties: India and Bhutan share deep Buddhist cultural heritage, educational exchanges, and open borders allowing free movement of people and goods.

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