INDO-BHUTAN - RELATIONSHIP WITH AREA OF CONFLICTS

INTRODUCTION

India has been an all-weather friend of Bhutan. India supported Bhutan’s admission in the United Nations and has been with the tiny Himalayan nation since decades assisting it for having a distinct place in the global sphere. Bhutan shares border with four Indian States: Assam, Arunachal Pradesh, West Bengal and Sikkim. Nestled in the Himalayas, Bhutan serves as a buffer between India and China.

BACKGROUND

India and Bhutan have been sharing ties since 1910 when Bhutan became a protectorate of British India, allowing the British to “guide” its foreign affairs and defence. When India became Independent in 1947, Bhutan was among the first nations to recognise it. Since then, the relationship between the countries has become stronger, especially because Bhutan also has a historically tense relationship with China.

BILATERAL RELATIONS

India also signed eight MoUs to ease economic pressure and promote trade, connectivity, space cooperation, and people-to-people relations. These agreements facilitate the trade of petroleum products, food products, and medicines. An MoU was signed to establish two railway lines—Kokrajhar-Gelpehu and Banarhat-Samtse—between India and Bhutan to increase connectivity and trade. India also agreed to strengthen trade and investment linkages and infrastructure, especially in the Gelephu SAR.

On border negotiations, India expressed satisfaction with Bhutan’s cooperation on mutual security and agreed to continue close coordination on issues of national interests. This indicates that India understands Bhutan’s urgency and compulsions to demarcate borders. In fact, in 2020, media reports highlighted that following the Galwan clashes, India encouraged Bhutan to end its disputes so that all three countries could resolve the complex Doklam issue. It seems that despite regular cooperation and information sharing, India deems the border dispute and possible ceding of Bhutanese territories as a bilateral issue between Bhutan and China as long as they do not harm Indian interests, as in Doklam.

ECONOMIC RELATIONS

India and Bhutan share a strong and multifaceted economic relationship, characterized by trade, investment, and development cooperation. India is Bhutan's largest trading partner, and the two countries have a free trade regime in place. India also provides significant financial and technical assistance to Bhutan's development efforts. India’s top exports to Bhutan are petrol & diesel, passenger cars, rice, wood charcoal, cellphones, Coke and semi-coke, soya-bean oil, excavators, electric generators & motors, parts for turbines, transport vehicle, bitumen.

India’s top imports from Bhutan are electricity (Rs. 2443 crore in 2021), Ferro-silicon, Ferro-silico-manganese, Portland pozzolana cement, Dolomite chips, Ordinary portland cement, Silicon Carbide, Cardamoms (Neither crushed nor ground), betel nut, oranges, semi-finished products of iron or non-alloy steel, boulders, etc.

Bilateral trade is conducted in Indian Rupees which is fully convertible to Ngultrum at par.

India is the leading source of investments in Bhutan, comprising 50% of the country’s total FDI. There are about 30 Indian companies in Bhutan operating in various sectors – banking, manufacturing, electricity generation, agri/food processing, ITES, pharmaceuticals, hospitality, and education – such as Punjab National Bank, State Bank of India, Tata Power Company Ltd., General Insurance Corporation, Apollo Educational Infrastructure Services, Azista Industries, Meghalaya Oxygen, etc.

EDUCATIONAL TIES

India and Bhutan share strong educational ties, with India providing significant support to Bhutan's education sector. This includes scholarships, teacher training programs, and collaborations between educational institutions. A key focus is on enhancing STEM (Science, Technology, Engineering, and Mathematics) education in Bhutan, with Indian teachers playing a role. India offers over 1000 scholarships annually to Bhutanese students for various disciplines, including medicine and engineering. Nehru Wangchuck Scholarship Scheme provides annual slots for Bhutanese students and scholars to study in India. The Indian Council for Cultural Relations (ICCR) provides 25 scholarship slots annually to Bhutanese students. 30 scholarships are provided annually for Bhutanese students to study at Nalanda University.

The integration of Bhutan’s Druk Research and Education Network with India’s National Knowledge Network is a key cooperation in the domain of e-Learning. This integration creates an information highway between the universities, research institutions, libraries, health-care and agricultural institutions of the two nations. The 5 Gbps connectivity link is being used by universities, colleges and hospitals in Bhutan. India is also supporting the establishment of the third international internet gateway for Bhutan.

PEOPLE-TO-PEOPLE TIES

Cultural exchanges, festivals, and events further promote mutual understanding and appreciation between the two nations. India and Bhutan share strong cultural ties deeply rooted in history and Buddhism, with significant people-to-people exchanges and cultural cooperation. Buddhism, originating in India, is a cornerstone of Bhutanese culture, and many Bhutanese visit sacred Buddhist sites in India. India also supports Bhutan's efforts in preserving its cultural heritage. Both countries have a strong Buddhist connection, with Guru Rinpoche, a revered figure in Bhutan, being an Indian tantric master who introduced Buddhism to Bhutan. Bhutanese pilgrims frequently visit Buddhist sites in India, like Bodh Gaya, further solidifying cultural and religious links. India provides assistance to Bhutan in preserving its cultural heritage, particularly in the construction and maintenance of monasteries and Dzongs. A number of Bhutanese pilgrims travel to Bodh Gaya, Rajgir, Nalanda, Sikkim, Udayagiri, and other Buddhist sites in India. As a part of the 50th anniversary celebration of diplomatic relations, GOI sponsored a visit by 18 Lam Netens (Buddhist monks) and representative of the Central Monastic Body of Bhutan to India.

REGIONAL ALLIANCES

India and Bhutan share a strong regional alliance, characterized by close diplomatic, economic, and security cooperation. This alliance is rooted in historical ties and is further strengthened by treaties and agreements that facilitate free trade, development assistance, and mutual security interests. Formal diplomatic relations were established in 1968, with the 2007 Treaty of Friendship and Cooperation replacing the 1949 treaty, reflecting a modern approach to their partnership. Trade between India and Bhutan is governed by both bilateral agreements and initiatives focused on regional economic integration, such as the South Asian Free Trade Area (SAFTA). Bhutan plays a crucial role in India's efforts to promote regional connectivity, particularly through the BBIN (Bangladesh-Bhutan-India-Nepal) initiative and India's Act East Policy. Bhutan has been a member of the South Asian Association for Regional Cooperation (SAARC), an organization focused on regional cooperation and development in South Asia. Together India and Bhutan also share other multilateral forums such as BBIN (Bangladesh, Bhutan, India, and Nepal), BIMSTEC (Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation) etc.

MILITARY RELATIONS

India and Bhutan share a close military relationship. India provides training, equipment, and logistical support to the Bhutanese armed forces. This enhances their capabilities in border security and defense. Joint military exercises between the two countries are conducted regularly to promote strategic coordination. In military relations, a 2000-strong Indian Military Training Team (IMTRAT) is permanently based in western Bhutan. Other units of the Indian Army also closely cooperate with the Royal Bhutan Army in matters of anti-insurgency and counter-terrorism.

The Royal Bhutanese Army does not have a navy as it is a landlocked country and neither does it have an Air Force. Its air protection is provided by the Eastern Air Command of the Indian Air Force.

SPACE CO-OPERATION

Space cooperation is a new area of bilateral cooperation. On 17 August 2019, Prime Minister Narendra Modi and Prime Minister Dr. Lotay Tshering jointly inaugurated the Ground Earth Station of the South Asia Satellite in Thimphu. The two sides collaborated on the India-Bhutan SAT, the first satellite jointly developed by India and Bhutan, which was launched on 26 November 2022 from ISRO’s Satish Dhawan Space Centre at Sriharikota. The Government of India has extended capacity building opportunities to Bhutanese engineers for the India-Bhutan SAT project. Chairman ISRO Shri S. Somanath visited Bhutan in March 2023 to inaugurate the ground earth station for the India-Bhutan Satellite. Both sides signed a Joint Plan of Action on Space Cooperation during PM Modi’s State Visit in March 2024. Under the JPoA, India has allocated additional 16 MHz on the second transponder of the South Asia Satellite for use by Bhutan. The first meeting of the Joint Working Group under the JPoA took place in Thimphu on 06 September 2024.

AREA OF CONFLICTS

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.

CONCLUSION

India-Bhutan relations are characterized by a unique blend of historical ties, strategic cooperation, and shared values. The enduring friendship between these two nations has withstood the test of time. It has evolved into a multifaceted partnership encompassing various sectors of cooperation. As India and Bhutan navigate the complexities of the 21st century, they must build on their past achievements. They have to explore new avenues for collaboration and engagement. By fostering economic growth, promoting cultural exchange, and strengthening strategic cooperation, India and Bhutan can realize their shared vision of peace, prosperity, and mutual respect.

References

· Harsh V. Pant | Aditya Gowdara Shivamurthy, The India-Bhutan story: India understands the urgency and needs of its neighbour, Originally Published Financial Express Published on Mar 28, 2024

· Vajiram Editor/ Bhutan-India Bilateral Relation / Mar 23, 2024

· Indo-Bhutan Relations / SRIRAM's IAS