Bhutanese King Jigme Khesar Namgyel Wangchuck visited New Delhi in the first week of April at the invitation of Indian President Droupadi Murmu. This is his fifth visit to India after his coronation, and it is significant both in its content and symbolism of the India-Bhutan bilateral relationship. Though the media speculated that the visit took place against the background of Bhutan Prime Minister Lotay Tshering’s interview to Belgian paper La Libre saying that Doklam was a trijunction between India, China and Bhutan, and that the three countries as sovereign equals needed to resolve it; it is apparent that preparations for the king’s visit had been going on for some time. Dismissing media assumptions, Indian Foreign Secretary Vinay M Kwatra said India and Bhutan remained in close touch relating to their shared interests, including security interest. However, it needs to be underlined that Bhutan, as an important partner, has both strategic and economic relevance to India’s foreign policy.

Bhutan has time and again reiterated that it stands by India’s security, and will not take any steps that will compromise India’s security. Bhutan and China have been holding border talks since 1984, and in 2021, they agreed to initiate a three-step measure to resolve the boundary dispute. India remains an important stakeholder in the border dispute between Bhutan and China, given the importance of the trijunction to India’s security. There have been media reports that China has been insisting on swapping territory with Bhutan by offering 495 sq km in the disputed Jakarlung and Pasamlung valleys in the north with 269 sq km in the west at the Doklam trijunction that will provide China strategic control over Chumbi Valley having implications for India’s security.

Pressure tactics

It is interesting to note that in 2019 China made a new claim on 650 sq km in the Sakteng Wildlife Sanctuary area, and Bhutan protested against it. Many experts see such new claims as pressure tactics on Bhutan to resolve the boundary dispute with China without considering India’s position on the Doklam trijunction. Such Chinese tactics are not new. Since its occupation of Tibet, China has often questioned India’s special relationship with Bhutan within the 1949 Treaty of Peace and Friendship. Given Bhutan’s own security perception vis-à-vis China, Thimphu has developed a close relationship with India.

In 2007, India and Bhutan updated the 1949 treaty and signed a new treaty that reflected the entire gamut of their contemporary bilateral relationship. Article 2 of the treaty reads, “...shall cooperate closely with each other on issues relating to their national interests. Neither government shall allow the use of its territory for activities harmful to the national security and interest of the other”. Given the expanding relationship with India, Bhutanese author Karma Ura defines it as “undivorcably” deep. During the Doklam crisis, Bhutan had stepped in to say that the status quo should be maintained at the trijunction for peace and tranquillity. There were reports in the Indian media that India is keen to see Bhutan settle its border dispute with China, which will enable New Delhi to “define trijunction at Doklam”—a flashpoint between India and China.

Prior to the establishment of diplomatic ties in 1968, India has been playing an important role in Bhutan’s economic and infrastructure development. Apart from financing the Border Road Organisation’s project DANTAK which was established during the third king’s rule in 1961, it has built several infrastructures in Bhutan. India has constructed over 1,600 km of roads, over 1,800 metres of major bridges, two airfields, high school, hospital and broadcasting station; maintained the East-West Highway, and established telephone exchanges and microwave links. India has also proposed to build a road through the Sakteng Wildlife Sanctuary in Bhutan that will reduce the travel distance between Assam and Arunachal Pradesh by 450 km. The two countries are discussing the 57.5-km Kokrajhar-Gelephu transborder broad gauge rail link project.

India has significant investments in the hydel power sector, and a large chunk of Bhutan’s revenue is generated from the electricity exports to India. As a result, Bhutan owes India which is the largest investor. According to Bhutan’s Ministry of Finance, “As of 31 December 2021, the INR-denominated debt accounted for 69.7 percent of total external debt, of which 95.5 percent was hydropower debt.” The tariff for exported electricity has been reviewed upwards. India remains the largest market for Bhutan’s electricity which buys 75 percent of the output. According to a report in the Bhutanese newspaper Kuensel, this debt does not pose a risk as the rupee is pegged at par with the ngultrum.

Electricity trade

Power export generates 40 percent of Bhutan’s revenue and constitutes 25 percent of its GDP. This revenue has added to Bhutan’s growth from 6 percent in 1993 to 8.7 percent in 2002, offsetting its import payment through electricity trade with India, which in the near future will also include export to Bangladesh using India’s cross-border grid. Both countries now want to expand their cooperation to renewable energy keeping climate concerns in mind. India and Bhutan have initiated India-Bhutan Development Cooperation Talks and the fourth round took place in January 2023. Bhutan receives the largest amount in loans and grants in the budget of the Indian Ministry of External Affairs. In this financial year, Bhutan will receive IRs24.0058 billion for various projects.

The Bhutan monarch’s visit also demonstrates that the two countries place their bilateral relationship on an equal footing. During his first visit to India after his coronation, the king had also underlined Bhutan’s commitment to India’s security. Indian Prime Minister Modi had also chosen Bhutan as his first foreign destination after he assumed power in 2014. As India enunciated its “neighbourhood first” policy, the neighbourhood has found priority in the prime minister’s foreign visits. Bhutan will remain an important development and strategic partner of India due to their shared interests. The recent visit of the king only underlines the reality of this relationship.