India-Bhutan Ties Set For Further Growth

Bhutanese Foreign Minister Lyonpo (Dr.) Tandi Dorji’s week-long visit to India set a new benchmark for the bilateral ties.  During the visit, Dr. Dorji held bilateral discussions with India’s External Affairs Minister Dr. S Jaishankar and reviewed the entire gamut of Indo-Bhutan relations. The two sides discussed various aspects of bilateral relations, including economic cooperation, development partnership, and hydro-power cooperation. Before meeting his Indian counterpart, Dr. Dorji also met with Indian Foreign Secretary Vijay Gokhale. After visiting Delhi, the Bhutanese Foreign Minister would be visiting Bodhgaya and Rajgir in Bihar. From there, the dignitary would be going to Kolkata, where he is expected to meet with both the Governor and Chief Minister of West Bengal. 

Lyonpo Tandi Dorji’s visit was in keeping with the tradition of regular visits and the exchange of views at the highest level between the two countries. The visit happened while the ‎Druk Nyamrup Tshogpa (DNT) led by Prime Minister Lotay Tshering completed one year in office on November 7, 2019. The Tshering government faced multiple challenges to generate funds to undertake development projects, especially in the health sector. The foreign ministry was allocated Nu* 3.5 billion while it needed close to Nu 13 billion in the country’s 12th Plan. Most importantly, the Bhutanese government is faced with problems in managing the rise of external debt, trade deficit and the slowdown in FDI and remittance inflows despite undertaking economic reforms in this regard. There has been a general feeling in Thimphu that the negative macro-economic indicators could be correlated with the slowdown in the Indian economy. 

The visit is also reflective of the new momentum in high-level exchanges between India and Bhutan. Both the countries share a unique and time-tested bilateral relationship, characterized by mutual trust, goodwill, and understanding. This visit happened after four months of Indian Prime Minister Narendra Modi’s visit to Thimphu. Earlier, after assuming office, India’s External Affairs Minister had visited Bhutan under the ‘neighborhood first’ policy. That was, in fact, the first overseas visit of Dr. Jaishankar.  Earlier, Prime Minister Lotay Tshering undertook his first overseas visit to India in December 2018.

Ever since the diplomatic relationship was established in 1968 between Bhutan and the Republic of India, it has emerged as one of the most successful neighborhood stories in South Asia, which is characterized by mutual trust, understanding, and maturity.  The treaty of India-Bhutan Friendship and Cooperation signed in 1949 (updated and revised in February 2007) has remained as the pillar of this relationship. This has facilitated special arrangements like open border, security cooperation, and deepening people-to-people relationships. Despite many asymmetries, both countries feel dependent on each other and acknowledge each other as equal partners in their endeavour towards economic growth, consolidation of democracy and regional peace. Currently, there are several bilateral institutional arrangements in operations between both the countries in areas like water resources, trade and transit, economic cooperation, security, and border management.

Meanwhile, Bhutan has decided to levy charges from Indian tourists, who are presently exempted from it. There has been a sharp increase in the inflow of tourists into the Himalayan Kingdom especially from India. In 2018 alone, India accounted for more than half of the tourists from the South Asian region. Bhutan Tourism authorities would be charging a “Sustainable Development Fee” which is yet to be decided in addition to a “permit processing fee”. This is aimed at tourism growing in a sustainable manner in Bhutan, as the country has a very fragile ecosystem.

The visit of Dr. Dorji is a mixture of political and religious significance. It also aims at broader economic cooperation.  The purpose of the visit was to expand diplomatic relations and further consolidate the existing ties between the two countries. Both the Foreign Ministers discussed a wide range of issues and new mechanisms to advance the bilateral relations further. They also reviewed cooperation on climate change, infrastructure, security and strategic issues, India’s technical/economic assistance to Bhutan’s 12th five-year plans. The two ministers agreed to upgrade the bilateral relations given the changing regional and global dynamics.

 Script: Dr. Nihar R Nayak, Research Fellow, IDSA