A trusted partner: India Bhutan ties are governed by 1949 Friendship Treaty (amended in 2007) which states that both countries will ensure perpetual peace, friendship and protect each other’s national interests.
o Bhutan stands out as an exception in South Asia as a country whose relations with India do not oscillate between China and India based on the party in power.
o Similarly, India has shown its respect by visiting Bhutan first on the state visit or standing beside Bhutan during Dokhlam crisis. Both countries have stood the test of good neighborly relations.
Strategic Relevance: Bhutan acts as a buffer between two big powers that is India and China. The Chinese claims on Ladakh, Nepal, Sikkim, Bhutan and Arunachal jeopardizes Indian and Bhutanese sovereignty. Thus, for both Bhutan and India it is imperative to avoid such territorial claims together.
Economic overlapping: India continues to be the largest trade and development partner of Bhutan. India has contributed generously towards latter’s Five Year Plans since 1961.
o Cooperation in hydropower has over the years intensified as main pillar of economic ties and has evolved to become Bhutan’s major export item. The hydro relations have benefitted India to tackle it energy deficiency.
o The three hydropower projects developed with Indian assistance have already been completed: Tala Hydroelectric Project, Chukha Hydroelectric Project and Kurichhu Hydroelectric.
Challenges in the relationship
- There is a perception that India sometimes takes Bhutan’s loyalty for granted. The political meddling,regime management and economic arm twisting (blockade in 2013) increases Bhutan’s mistrust for India’s intention.
- Another issue is Bhutan’s geographically disadvantaged location that has made its economy hugely dependent on India, giving India an undue advantage over Bhutan’s trade and commerce.
- China is another important dimension in India-Bhutan relations. In recent years, China has tried to establish its influence on Bhutan. It continues to stake claims to important area such as Chumbi valley and Doklam.
- Recalibrating the friendship: It has to build Bhutan’s trust on India’s intention by following the treaty in letter and spirit and not on a chose and pick basis.
- Strategic balancing: Bhutan and India bilaterally should look at all matters of territorial incursions. India needs to develop a standalone Bhutan policy that is independent of Chinese lens.
- Inclusive Economic ties: India has to make efforts to reduce Bhutan’s debt fears. Operationalisation of the pending projects can reduce the fears.
- There is no harm in diversifying one’s economy and India should see it as a new opportunity to partner with Bhutan and help diversify its economy. It should transform its relation from an aid provider to an investment led developer. Skilling Bhutan’s youth, developing a bilateral tourism policy and increasing private investment can be helpful for both.
- The upcoming PM’s visit to Bhutan can be a starting point for addressing the above identified concerns.