History of Relationship

=>In the initial days India followed a “buffer strategy” with Bhutan

1947 : India-Bhutan Friendship Treaty

  • According to this treaty India was mandated to guide Bhutan’s Foreign policy as well as defence affairs…

=>1950 : China Annexed Tibet….Bhutan feared similar move by China……therefore Bhutan drifted close to India

“India provides 90% of the Five Year Plan of Bhutan”…

98% trade of Bhutan is with India…

=>2007 : Some changes happened…Revision of 1947 Treaty…..India was no longer involved in Bhutan’s foreign policy and defence…This is becausee Bhutan changed from absolute monarchy to constitutional monarchy….Remember that removal of such provision does not affect relations with India…..In fact India actively guided Bhutan in international forums….

2012 :

#Bhutan started to increase its engagement with foreign countries…..Expanded it from 21 to 53 countries….India was not in favour of this movement

#Rio+20 : Pre planned meeting between China and Bhutan……..During this meeting there was an informal understanding to transfer Doklam plateau to China……

Doklam plateau has got strategic significance because

  • Closeness to Siliguri Corridor
  • It lies immediately east to India’s defence in Sikkim

India’s Response to this move

  • India started to withdrew subsidy to Bhutan
  • India told that they will no more aid to the 1000 MW hydro electric power project

2013 : Economic burden…..Party loss election…..People’s democratic Party won the election

Why Bhutan ?

  • Buffer state between India and china
  • Strategic ImportanceChumbi Valley is situated at the trijunction of Bhutan, India and China and is 500 km away from the “Chicken’s neck” in North Bengal, which connects the northeast with rest of the country.
  • Bhutan in past has helped India to contain insurgency in North-East by flushing out militants groups like NDFB & ULFA.
  • Development of North Eastern states through connectivity
  • Friend of India in international forums
  • Stay for India where India’s interest is compromised : Only country in the region that joined India in its boycott of Chinese President OBOR project


1)Hydro diplomacy

The power generated by Bhutan RoR dams is the economic better of India-Bhutan relationship. India is financing these Hydro electric projects…Some of these dams are Tala, Chuka and Kurichu..Totally Bhutan has 3500 MW capacity of Hydro electric power…

2)Commercial and Economic Relationship

  • 98% of Bhutan’s trade is through India
  • There exists a Free Trade Regime between both countries
  • India also finances a major chunk of Bhutan’s Five Year Plan
  • India also helps in Auditing Bhutan’s FYP
  • India also develops Bhutan’s Supreme Court


  • Budhism
  • India and Bhutan is planning to build a University of Himalayan Studies
  • There is also an Indo-Bhutan foundation to increase the cultural linkage between both – There is also something called Mountain Echos which is animal cultural fest…
  • India is also constructing an e-library in Bhutan
  • India has also provided officials to monitor election process in Bhutan


There was a BBIN project for increasing connectivity between four countries..Bhutan withdrew from this agreement citing environmental concerns

BBIN an ambitious initiative by four countries of South Asia i.e Bangladesh, Bhutan, India and Nepal with the aim to facilitate movement of vehicles carrying cargo and passengers in each other’s territory without the need for trans-shipment of goods from one country’s truck to another’s at the border

Importance of BBIN project

  • It facilitates the betterment of road infrastructure in Bangladesh, Bhutan, Nepal and India (BBIN) in order to improve the regional connectivity.
  • The project corridor is a share of Asian Highway No. 1 (AH01). It leads the way to accomplish nations Act East Policy and acts as India’s Gateway to the East.Therefore, it will encourage and improve trade association with South East Asia.
  • The project is intended for improving the link between Imphal through the eastern part of Manipur, an interior state with just about 90% of the zone underneath territory
  • Validation of the BBIN contract will indorse benign, cheap, well-organized and globally thorough road transport in the sub-region and will help each country in generating an institutional procedure for regional incorporation.
  • This remained second major multilateral arrangement among South Asian Countries and marks indicating the idea of SAARC-minus-Pakistan (First I consider BIMSTEC, which got started on the beginning of New Delhi).
  • BBIN countries will be promoted by communal cross-border movement of passenger and possessions for the global financial growth of the district.
  • The individuals of the four countries will get profit through the unified drive of goods and passenger across borders.

Way forward

The relationship between India and Bhutan is characterised by win-win diplomacy, that is India is helping to finance dams and bring back exess electricity at low prices. Bhutan is one of the few countries where the bilateral relationship free from tension. Nowadays Bhutan-India relationship have gradually evolved from donor-recipient to equal partnership….

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