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UPSC Civil Services Exam 2020: India-Bhutan Bilateral Relations at a Glance

India and Bhutan opened a new trade route on July 15, 2020, between Pasakha in Bhutan and Jaigaon in West Bengal. With emerging trade relations between the two nations, the India-Bhutan bilateral relation becomes an important topic to be studied for the UPSC Civil Services Prelims Exam 2020.

Jul 27, 2020 14:59 IST
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UPSC Civil Services Exam 2020: India-Bhutan Bilateral Relations at a Glance
UPSC Civil Services Exam 2020: India-Bhutan Bilateral Relations at a Glance

In a bid to boost its economic and connectivity linkages with Bhutan a new trade route has been opened under the Jaigaon Land Station on India - Bhutan Border through Ahllay near Pasakha in southeastern Bhutan. Besides the new trade point, India is also planning a fast-track railway link between Mujnai in West Bengal and Nyoenpaling in Bhutan. With favorable and emerging relations with the neighbor, India-Bhutan relation is an important topic to be intensively prepared for UPSC Civil Services Prelims and Mains GS Paper-II. 

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Historical Background of India-Bhutan Relations

The basis for bilateral relations between India and Bhutan was formed by the Indo-Bhutan Treaty of Peace and Friendship of 1949. However, Article 2 of the treaty critically gave India a role in guiding Bhutan’s foreign policy. Hence, some alterations were made in the treaty in 2007. As per the new treaty, Bhutan can import arms as long as Indian interests are not harmed and there is no re-export of the weapons, either by the government or individuals.

🟊 India-Bhutan Friendship Treaty

The India-Bhutan Friendship treaty signed by both the nations in 2007 agreed on the following terms:

  • Reaffirming their respect for each other's independence, sovereignty and territorial integrity;
  • Recalling the historical relations that have existed between our two countries;
  • Recognizing with deep satisfaction the manner in which these relations have evolved and matured over the years into a model of good neighborly relations;
  • Being fully committed to further strengthening this enduring and mutually beneficial relationship based on genuine goodwill and friendship, shared interests, and close understanding and cooperation;
  • Desiring to clearly reflect this exemplary relationship as it stands today; And having decided, through mutual consent, to update the 1949 Treaty relating to the promotion of, and fostering the relations of friendship and neighborliness between India and Bhutan;

India-Bhutan Geographical Significance

Bhutan shares a 699 km long border with four Indian states: Assam, Arunachal Pradesh, West Bengal, and Sikkim. Bhutan is India’s only neighbor that is yet to join China’s Belt and Road initiative (BRI). Since the 1990s, Bhutan has repeatedly turned down Chinese ‘package deal’ offers to make bigger territorial concessions to Bhutan in return for the smaller Doklam area (remaining sensitive to India’s security concerns in the area).  

There is also a Border District Coordination Meeting (BDCM) Mechanism between the bordering States and the Royal Government of Bhutan (RGoB) to facilitate coordination on border management and other related matters.

 UPSC (IAS) Prelims 2020: Check Subject-Wise Study Material and Resources for Revision 

India-Bhutan Trade Relations

Both countries have mutual interests in diverse areas of cooperation – security, border management, trade, hydro-power, and many more. India has helped set up the Chukha hydro project (1986-87), the Kurichu (2001-02), and the Tala project (2006-2007) in Bhutan. India has funded nearly all of Bhutan’s landmark projects, including the airport at Paro, Bhutan Broadcasting Station, the Bhutan-India microwave link, One million-tonne Dungsam Cement Plant, Bhutan Institute of Medical Sciences, and all exploration, survey and mapping of mineral resources.

India is Bhutan’s leading development partner. Since the launch of the First Five Year Plan of Bhutan in 1961, India has been extending financial support to Bhutan’s FYPs. India has allotted Rs 4500 crore to Bhutan’s 12th FYP.

Major exports from India to Bhutan are petroleum products, mineral products, base metals and articles, machinery, automobiles & spares, vegetable, nuts, spices, processed food and animal products, chemicals, wood, plastic, and rubber. The Agreement on Trade and Commerce also provides for duty-free transit of Bhutanese merchandise for trade with third countries.

India-Bhutan Cultural Relations

India and Bhuta share deep religious-cultural ties. Guru Padmasambhava, a Buddhist saint played an influential role in spreading Buddhism and cementing traditional links between people in both nations. Regular cultural exchanges take place between the two countries. One of the basic objectives of the India Bhutan Foundation established in 2003 is to enhance people to people exchange in the cultural field.

India-Bhutan Diplomatic Relations

  • India opened an office of a Special Representative in Thimphu in 1968, Bhutan reciprocated in 1971. The two offices of special representatives were upgraded to full-fledged embassies in 1978. 
  • India and Bhutan are founding members of the South Asian Association for Regional Cooperation (SAARC) that deals with the economic, social, and cultural development of the South Asian Region.
  • Both of them 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.

India-Bhutan Foundation

India-Bhutan Foundation was established in August 2003 during the visit of the present King (then Crown Prince) to India with the aim of enhancing people to people exchanges in focus areas like education, culture, and environment protection. Ambassador of Bhutan and India are the Co-Chairpersons of the Foundation. The Royal Government of Bhutan and the Government of India have contributed Rs. 5 Crore each as the main corpus fund to IBF and the entire amount of Rs.10 Crores has been kept in a fixed deposit in Bhutan. Interest earned from the fixed deposit is used for financing proposals received from Bhutanese/Indian citizens and Non Governmental Organisations on studies, research, and similar activities, exchanges of a cultural/educational/scientific nature, programmes and activities such as seminars, workshops on subjects of common mutual interest that can help in achieving the objectives of the Foundation.

The two countries have always shared a unique and organic relationship which is often termed as a ‘sacred bond’, largely sustained by regular high-level visits and dialogues between the neighbors. Narendra Modi’s ‘Bharat to Bhutan (B2B)’ vision on how “Bharat should stand for Bhutan and Bhutan for India”, introduced during his first foreign trip laid an important foundation with the new government in power. 




























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