India – Bhutan

Bhutan has shared a cordial relations with India based on our long-standing diplomatic, economic and cultural relations. The India –Bhutan treaty of friendship and cooperation was signed in 1949 and was updated in 2007, subjecting the Himalayan nation’s security needs to supervision. The Treaty provides for perpetual peace and friendship, free trade and commerce, and equal justice to each other’s citizens.

India Bhutan relations in past:

• India and Bhutan have enjoyed a “special” relationship, according to analysts. “India and Bhutan have closely aligned their foreign policy on many occasions. For example, the common position both countries have taken with regard to China’s ambitious Belt and Road Initiative.
• The two countries have also taken a common position vis-à-vis terrorism referring to Bhutan joining India in pulling out of the 2016 South Asian Association for Regional Cooperation Summit, which was to be hosted by Pakistan, following a string of terrorist attacks in India.
• The two sides have agreed to “cooperate closely with each other on issues relating to their national interests”, in line with the 2007 India-Bhutan Friendship Treaty.

Need to revisit the India’s Bhutan policy on following issues:

• Hydro-power projects:
  • Three hydro-electric projects (HEPs) totalling 1416 MW are already exporting electricity to India.
  • Delays in constructing and commissioning in Bhutan by Indian companies have led to the country’s burgeoning national debt.
  • India’s power-surplus status and the advent of other renewable energies will make it more difficult for Bhutan to ensure that its hydropower sector becomes profitable.
  • Unless India finds ways to help, it will be accused of the same sort of “debt-trapping” that China is accused of today.
• Trade and Commerce: India is Bhutan’s largest trading partner.
  • India and Bhutan have signed an Agreement on Trade, Commerce and Transit in 2016, which provides for a free trade regime between the two countries aimed at boosting the bilateral trade for mutual benefit.
  • The goods and services tax still hurts Bhutanese exporters, and demonetisation has left lasting scars on the banking system.
  • Government’s decision to cut cooking gas subsidy just before the 2013 elections in Bhutan has often been shown as proof of Indian interference.
• Security Issues: Role of Big Brother
  • Doklam crisis and incidences of Indian presence being mistakenly represented as Indian encroachment have the potential to deteriorate the relationship between the two countries and push Bhutan into the lap of China.
• Joint Ventures:
  • The joint ventures are stuck because the Indian PSEs insist on having more managerial control and have refused to come up with agreed financing.
• Connectivity:
  • India’s plan for regional connectivity seems to have hit a dead-end with Bhutan.
  • The Bhutanese Parliament didn’t ratify the implementation of BBIN project which will further affect the connectivity. 

The measures for continuing the cohesive and durable relationship with Bhutan are: 

• The principles of Panchsheel and Gujral doctrine must drive our relations towards Bhutan.
• The hydropower projects, the tariffs need to be re-negotiated.
• India must be careful not to seem bossy, and end up souring up its relationship with Bhutan as was done in the case of Nepal.
• Considering this legacy of Independent democracy, India should refrain from interfering in sovereign matters of Bhutan.
• A politically stable Bhutan is important to India. An unstable and restive Bhutan would not only jeopardize India’s investments in that country but also provide a safe haven for anti-India activities and anti-India militant groups.
• India needs to focus on policing cross-border trade.
• India needs to discard the tradition of offering economic subsidies and negotiating project proposals with neighbouring capitals and focus instead on enabling agreements, and let market forces leverage the existing economic and geographic complementarities.
• Standby credit facility extended to Bhutan need to be reassessed as per current exchange rates and economic stability.
• The Doklam crisis can be taken as a wake-up call and be used as an opportunity rather than as a continuing threat with China.
• More people to people contact: Steps should be taken to involve people in national, regional or cultural events so that close and strong relations between the two countries could be sustained.
• India needs to give more attention in inviting Bhutanese youth to study in India at all levels.
• Media, particularly social media, needs to be harnessed to reach out to Bhutanese policymakers and common people to give them the confidence that India will stand by them for their economic and cultural development.

 Future of the relations:

• There are many potential areas ideas like 
  • organic farming,
  • eco-tourism,
  • developing north eastern states 

that can be explored and cooperation to be strengthened.

• There are high level groups on security, water management, power, trade, investment, culture which can smoothen the relations between nations.
• India looks for the opportunity for Bhutanese students in every kind of institutions and the scholarship for them has also been expanded.
• In cultural aspect, there is a Nehru-Wang chuck Cultural Centre in Bhutan and they also have very rich culture where exchanges do have a broad opportunity.
• India being the fast growing economy has to align itself with Bhutanese ideas of sustainable development in various aspects.

Conclusion:

Hydro-electric power generated by Bhutan’s run-of-the river dams is the economic bedrock of the India-Bhutan relationship. India needs to act robustly to address Bhutanese concerns that are weakening the traditionally strong India-Bhutan bilateral bond, as a strong relationship with India could reduce the chances of Bhutan succumbing to Chinese pressure.