What does the visit of Indian Prime Minister to Bhutan mean for the two countries?

What does the visit of Indian Prime Minister to Bhutan mean for the two countries?

Indian Prime Minister Narendra Modi’s visit to Bhutan highlights the strong bond and mutual confidence between the two capitals of Thimphu and New Delhi. After his earlier visits in 2014 and 2019, such visits, even when made at a short notice underscores the message that Bhutan is not isolated, but has steadfast allies in the region resistant to external pressures. Remarkably, this is the first instance in 15 years where an Indian Prime Minister has undertaken a foreign trip amid an election campaign, reflecting the special relationship between Bhutan and India.

Diplomatic ties between Bhutan and India were formally established in 1968, building upon the foundation of the 1949 Treaty of Friendship and Cooperation, which was renewed in 2007.

India stands as Bhutan’s foremost trading partner, enjoying a free trade agreement that allows Bhutanese exports to transit through India without duty. Trade with India constitutes more than 70% of Bhutan’s total trade volume. During its 12th Five-Year Plan, India contributed INR 50 Billion as a principal development partner to Bhutan.

Presently, four hydroelectric projects with a combined capacity of over 2,100 megawatts are operational in Bhutan, supplying electricity to India. Two additional projects of similar capacity are underway. In 2022, India imported nearly INR 25 Billion worth of electricity from Bhutan. Indian investments account for 50% of Bhutan’s total Foreign Direct Investment (FDI), with around 30 Indian companies active in various sectors including banking, electricity generation, food processing, IT services, pharmaceuticals, hospitality, and education.

In 2021, Bhutan became the first nation to adopt the Unified Payments Interface (UPI) for financial transactions. Additionally, the Indian Space Research Organization (ISRO) and Bhutan co-developed a satellite, named the India-Bhutan Sat, which was successfully launched in November 2022.

His Majesty the King has made seven visits to India over the past decade, including a notable tour of Maharashtra and Assam in November of the previous year. Prime Minister Modi’s first visit to Bhutan was in 2014, followed by another in 2019, alongside consistent official-level interactions.

Several Indian Prime Ministers have visited Bhutan over the years, accentuating the close diplomatic and cultural ties between the two countries.

Jawaharlal Nehru visited Bhutan in 1958, marking the first visit by an Indian Prime Minister. This visit was significant, symbolizing India’s support and friendship with Bhutan during its early years of modernization.

Then, Indira Gandhi visited Bhutan in 1968. This visit was important in further strengthening the ties between India and Bhutan. Her son, Rajiv Gandhi made a visit in 1988, which continued the tradition of high-level visits between the two nations and underscored the importance India places on its relationship with Bhutan.

Prime Minister I.K Gujral visited Bhutan in 1997. This visit, like those of his predecessors, aimed at reinforcing the bilateral relations and exploring new areas of cooperation.

Later, Atal Bihari Vajpayee visited in 2003, which was significant for discussing various aspects of India-Bhutan relations, including hydropower cooperation.

Manmohan Singh, the 14th Indian PM visited Bhutan in 2008 and again in 2013. These visits were crucial for discussing economic ties and hydropower projects, which are a key component of Bhutan’s economy and its export to India.

These visits by Indian Prime Ministers to Bhutan over the years have been pivotal in enhancing mutual understanding, cooperation, and bilateral relations between the two neighboring countries.

By Tashi Namgyal, Thimphu