Area of Conflicts - INDO

AREA OF CONFLCTS

The main areas of potential conflict between India and Bhutan revolve around hydropower projects, border disputes, and the influence of China on Bhutan's policies. Specifically, concerns exist regarding India's changes in power purchasing policies, India's role in funding and managing hydropower projects, and the potential impact of China's growing influence on Bhutan's border with India and China.

(A) Hydropower Projects Issues and Concerns

In recent times, there have been growing concerns among a section of Bhutanese against India’s involvement in the hydropower projects, alleging the country of growing hydro-debts in Bhutan. Indian hydropower companies are also being accused of engaging in allied sectors in Bhutan and not providing sufficient employment opportunities to the Bhutanese. According to the Vasudha Foundation report, the hydropower projects have not provided enough employment opportunities to the Bhutanese. According to a release by the Indian Embassy in Bhutan in 2015, “There are about 60,000 Indian nationals living in Bhutan, employed mostly in the hydro-electric power and construction industry. In addition, between 8,000 and 10,000 daily workers enter and exit Bhutan every day in [the] border towns.” Many other concerns are enlisted as under:

Firstly, the Bhutanese complain that India buys cheap electricity from the hydroelectric projects in Bhutan. For example, in 2017, the tariff rate on the import of hydroelectricity from the Tala hydroelectric project by India was 1.80 Bhutanese Ngultrum (BTN) [S$ 0.03] per unit. This was much below the domestic market price in India which was around ₹7 to ₹8 (around 15 to 16 Singapore cents) per unit.

Second, the guidelines issued by the Indian Cross Border Trade of Electricity (CBTE) in December 2016 are seen as unfavourable to Bhutan. The guidelines were interpreted as restricting the type of hydropower investments Bhutan could make, potentially hindering the country's ability to fully leverage its hydropower resources.

Third, there are concerns in Bhutan on the delay in the completion of the hydropower projects. Delays in project implementation and cost overruns have become a major concern, impacting Bhutan's financial stability and growth. The loan granted by India to Bhutan increases by 10 per cent every year which adds to the debt for the country.

Fourth, one of the gravest challenges posed by any hydropower development projects is to the region’s ecology. In Bhutan, the Department of Forest and Park Services looks after the ecology of the country. As a norm, any hydropower project has to clear the Environmental Impact Assessment (EIA) test before construction works can start. In Bhutan, the EIA was not carried out for projects whose construction began before 2000. Bhutan's hydropower projects are also vulnerable to the impacts of climate change, such as glacial retreat and altered precipitation, which can affect water availability and power generation. , the hydropower projects have also affected the natural flow of water in ponds and/or spring water. Bhutan does not have a proper resettlement and rehabilitation policy for the people affected by the hydropower projects.

In summary, while India and Bhutan share a cooperative relationship in hydropower development, concerns exist about the financial implications of Bhutan's increasing hydro-debt, project delays, and the need for a more sustainable and equitable partnership in the long term.

(B) Cross Broder Terrorism

India's North-East militant groups, such as United Liberation Front of Assam (ULFA) & National Democratic Front of Bodos (NDFB), use Bhutan as a hideout. The Indo-Bhutan border (699 km) passes through the states of Assam, Arunachal Pradesh, West Bengal and Sikkim. Illicit establishment of camps by militant outfits in the dense jungles of south-east Bhutan helps insurgents from India in executing anti-India activities. Both countries continue to work together to strengthen border security and prevent cross-border terrorism. This includes measures like increased surveillance, intelligence sharing, and joint operations. The United Nations Office on Drugs and Crime (UNODC) has also organized workshops to enhance cooperation between the two countries on border security and combating human trafficking and smuggling.

Bhutan does not have diplomatic relations with China. China has a questionable role in its territorial relation with Bhutan. Several attempts were made by China to exercise historic rights over Bhutan and the first attempt was in 1930.In 1958, new maps in China started showing large parts of eastern Bhutan as part of Chinese territory, and China went on to occupy around 300sq km territory in northeastern Bhutan. In 1960s China declared Bhutanese, Sikkimese and Ladakhis perceived subjects of China to form one united family in Tibet. China considers Bhutan as part of its "five-finger policy," which views Tibet as the palm and Ladakh, Nepal, Sikkim, Bhutan, and Arunachal Pradesh as the fingers.

Bhutan and China have a 470 km border which is still not demarcated officially, both the nations have issues over the border, China had made several geographical intrusions and the latest being in Doklam which sparked tensions between both the nations.

A section of experts say that Bhutan may get closer to China as China can offer Bhutan more economic support and tourism exchanges and also Bhutan can get bargaining power vis a vis India. Bhutan is weary of China and its territorial claims as seen in the past.

However, the India-Bhutan relation is multidimensional. India’s Friendship Treaty with Bhutan makes it “mandatory for Bhutan to take into account India’s concerns before striking any border negotiation deal with the Chinese.