India- Bhutan Relations | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

India and Bhutan recently unveiled significant initiatives to fortify their bilateral ties during Bhutan King Jigme Khesar Namgyel Wangchuck's eight-day visit to India from Guwahati, Assam. Prime Minister Narendra Modi and Bhutan’s King Wangchuck engaged in comprehensive discussions on bilateral cooperation in New Delhi, culminating in a joint statement. Despite Bhutan's small size, the nation holds a strategically vital position in South Asia and remains a key partner for India in regional cooperation endeavors.

Historical Relations

• Analysts consider the relationship between India and Bhutan as "special," marked by close alignment in foreign policy. Both countries have shared common stances on various occasions, such as their joint stance against China’s ambitious Belt and Road Initiative.
• Their unified response to terrorism, including Bhutan's solidarity with India in withdrawing from the 2016 South Asian Association for Regional Cooperation Summit hosted by Pakistan following terrorist attacks in India, underscores their cooperation.
• Aligned with the 2007 India-Bhutan Friendship Treaty, the two nations have committed to collaborating closely on matters related to their national interests.
• India has consistently assured Bhutan of its distinct identity and autonomy since India's independence. However, recent years have highlighted the necessity to re-examine India's Bhutan policy and address emerging issues.

Hydropower Projects

• Delays in the construction and commissioning of Indian-led projects in Bhutan have contributed to the country's growing national debt.
• Bhutan's reliance on hydropower faces challenges due to India's surplus power status and the rise of alternative renewable energies like wind and solar power. Addressing these challenges is crucial to ensuring Bhutan's hydropower sector remains profitable.
• India's assistance is pivotal, as failure to do so may lead to accusations of similar "debt-trapping" issues associated with China.

Trade and Commerce:

• India stands as Bhutan's largest trading partner, marked by a 2016 Agreement on Trade, Commerce, and Transit fostering a free trade regime between the nations.
• Despite this, Bhutanese exporters still grapple with the impact of India's Goods and Services Tax (GST), while the repercussions of demonetization linger in the banking system.
• India's decision to cut cooking gas subsidies before Bhutan's 2013 elections has been cited as evidence of Indian interference, creating tensions.

Security Concerns

• The Doklam crisis and incidents misrepresenting Indian presence as encroachment pose potential threats to the bilateral relationship, risking Bhutan's alignment with China.
• Some quarters perceive India's actions as overbearing, raising concerns about India's role as a "Big Brother."

Measures for Sustaining Strong Relations with Bhutan:

• Adherence to the principles of Panchsheel and the Gujral doctrine should guide our relations with Bhutan to foster enduring ties.
• Renegotiation of tariffs for delayed hydropower projects undertaken by Indian companies to address Bhutan's increased national debt.
• Addressing concerns arising from the rise of wind/solar energy in India impacting Bhutan's hydropower profitability.
• Exercising caution to avoid appearing domineering, learning from past experiences in neighboring countries like Nepal, and respecting Bhutan's sovereign matters due to its legacy of independent democracy.
• Recognizing the significance of a politically stable Bhutan in safeguarding Indian investments and curbing anti-India activities or militant groups.
• Prioritizing cross-border trade oversight for effective policing.
• Shifting focus from economic subsidies to leveraging existing economic and geographic complementarities through enabling agreements and market-driven initiatives.
• Encouraging greater people-to-people interactions through participation in national, regional, and cultural events to sustain a close and robust bilateral relationship.
• Emphasizing educational exchanges by inviting Bhutanese youth to study across various levels in India.
• Utilizing media, particularly social platforms, to engage Bhutanese policymakers and citizens, ensuring India's commitment to their economic and cultural progress.

Future Prospects of the Relationship:

• Exploring potential collaboration areas such as organic farming, eco-tourism, and developing India's northeastern states to strengthen bilateral cooperation.
• Establishing high-level groups focusing on security, water management, power, trade, investment, and cultural exchanges to facilitate smoother relations.
• Expanding opportunities for Bhutanese students across diverse institutions and broadening scholarships.
• Leveraging cultural connections through institutions like the Nehru-Wangchuck Cultural Centre in Bhutan to enhance cultural exchanges.
• Aligning India's fast-growing economy with Bhutan's ideals of sustainable development across various sectors.

Conclusion

• The hydro-electric power generated from Bhutan's run-of-the-river dams serves as the foundation of the economic ties between India and Bhutan.
• India must take proactive measures to resolve Bhutanese concerns that currently pose a threat to the historically robust India-Bhutan bilateral relationship. Strengthening ties with India holds the potential to mitigate Bhutan's vulnerability to Chinese influence and pressure.