India and Bhutan established their diplomatic relationship in 1968 with the establishment of a special office of India in Thimpu. The basic framework of bilateral relations lies in the treaty of Friendship and Cooperation signed in 1949 and revised in February 2007. The Golden Jubilee of establishment of formal diplomatic relationship between India and Bhutan was celebrated in the year 2018.
Bilateral relations between the nations is characterized by utmost trust, goodwill and mutual understanding. Regular high level visits and dialogues between the two countries has sustained a special relationship between India and Bhutan. On 2nd February 2018 Bhutan has opened a consulate office in Guwahati, Assam..
Extensive cooperation in the field of hydro-power cooperation with Bhutan forms the core of bilateral economic cooperation. For Bhutan, hydro – power development serves as a catalyst for socio economic development. Three hydropower projects developed with Indian Assistance are
- 1020 MW Tala hydroelectric project
- 336 MW Chuka hydroelectric project
- 60 MW Kurichhu hydroelectric project
Four hydro-electric projects totaling 2136 MW are already operational in Bhutan and are supplying electricity to India. The 720 MW Mangdechhu was commissioned in August 2019. Two HEPs (hydro electric projects) namely, 1200 MW Punatsangchhu-I, 1020 MW Punatsangchhu-II in Inter-Governmental mode and Kholongchhu HEP (600 MWs) under the joint venture mode are under various stages of implementation. In consultation with the Ministry of Power/DoE, the implementation formalities of the 2585 MW Sankosh Hydro Electric Projects (HEP) are currently being finalized.
India continues to be the largest trade. And development partner of Bhutan. Since diplomatic relations India has been extending economic assistance to Bhutan’s socio-economic development since the early 1960s when Bhutan launched its five Years Plans. For the 12th Five Year Plan, India’s contribution of Rs. 4500 crore, which constitutes 73% of Bhutan’s total external grant component. The new free trade agreement is in force since 29 July 2017 which provides for a free trade regime between the territories of India and Bhutan. The agreement also provides for duty free transit of Bhutanese merchandise for trade with third countries.
indian president Ram Nath Kovind, in 2017, the security of India and Bhutan is ‘indivisible and mutual’. India also assist in training Bhutanese military. The Indian Military Training Team (IMRAT), headed by a Major General, plays a crucial role in training Bhutanese security personnel.
- bhutan’s growing debt to India
- delay in completion on projects by India
- demarcation of boundary of Bhutan with China under the 1988 and 1998 agreement remain process in waiting, which has security implications for India and require a new formulation.