Key Highlights of the India-Bhutan Bilateral Talks

Context:

Recently, Bhutan’s Prime Minister visited India, where both countries engaged in extensive discussions and signed multiple agreements. The close and cordial relationship between India and Bhutan, built on trust, goodwill, and shared values, is evident across various levels of engagement. This enduring friendship serves as a cornerstone for mutual prosperity and regional stability in South Asia.

Relevance:

GS II: International Relations

Dimensions of the Article:

1. Key highlights of the India-Bhutan bilateral talks
2. Significance of Bhutan for India
3. Challenges in India-Bhutan Relations

Key highlights of the India-Bhutan bilateral talks

• Agreement on Petroleum Products Supply: Both countries signed an agreement to ensure a reliable and sustained supply of petroleum products from India to Bhutan, which will promote economic cooperation and growth in the hydrocarbon sector.
• Cooperation in Food Safety Measures: The Food and Drug Authority of Bhutan and India’s Food Safety and Standards Authority (FSSAI) signed an agreement to enhance cooperation in food safety measures. This will facilitate trade between the two countries by ensuring compliance with food safety standards and reducing compliance costs.
• MoU on Energy Efficiency and Conservation: An MoU was signed between India and Bhutan on energy efficiency and conservation, demonstrating a commitment to sustainable development. India aims to assist Bhutan in enhancing energy efficiency in households, promoting the use of energy-efficient appliances, and developing standards and labelling schemes.
• Border Dispute Discussions: The visit of the Bhutanese Prime Minister coincided with ongoing discussions between China and Bhutan to resolve their border dispute, particularly in the Doklam region. This follows the agreement reached between China and Bhutan in August 2023, four years after a conflict between India and China in Doklam.
• Gelephu Regional Economic Hub: Bhutan’s plans for a regional economic hub in Gelephu, known as the “Gelephu Mindfulness City” (GMC), were discussed. This project aims to prioritize sustainable development and focus on non-polluting industries such as IT, education, hospitality, and healthcare. Gelephu’s strategic significance lies in fostering economic integration and trade facilitation at the crossroads of India’s “Act East” policy and emerging connectivity initiatives in the Indo-Pacific region.

Significance of Bhutan for India:

• Strategic Buffer State: Bhutan’s location between India and China serves as a strategic buffer state, enhancing India’s security interests.
• Sovereignty and Territorial Integrity: India’s assistance in defense, infrastructure, and communication has contributed to maintaining Bhutan’s sovereignty and territorial integrity.
• Border Infrastructure Development: India’s support in building border infrastructure, including roads and bridges, has strengthened Bhutan’s defense capabilities and ensured territorial integrity.
• Doklam Standoff Support: During the Doklam standoff with China in 2017, Bhutan played a crucial role by allowing Indian troops to enter its territory to resist Chinese incursions.
• Trading Partner: India is Bhutan’s largest trading partner and primary export destination.
• Hydropower Development: Bhutan’s hydropower potential is a significant revenue source, with India’s assistance in developing hydropower projects.
• Financial Assistance: India provides financial assistance for Bhutan’s development projects.
• Cultural Ties: Strong cultural ties exist due to shared Buddhist traditions, with India helping preserve Bhutan’s cultural heritage, and Bhutanese students studying in India.
• Environmental Stewardship: Bhutan’s commitment to being carbon-neutral aligns with India’s efforts to promote environmental sustainability. India supports Bhutan in renewable energy, forest conservation, and sustainable tourism, contributing to Bhutan’s carbon-neutral goals.

Challenges in India-Bhutan Relations:

China’s Increasing Presence:

• China’s growing economic and military influence in Bhutan, particularly along the disputed border, poses a challenge to India’s strategic interests in Bhutan.

Border Incursions:

• Incidents of border incursions by Chinese forces along the India-Bhutan border have raised concerns.
• The Doklam standoff in 2017 was a significant flashpoint that could strain India-Bhutan relations if similar disputes escalate.

Hydropower Projects Concerns:

• While India has been a major partner in Bhutan’s hydropower sector, there have been concerns in Bhutan regarding the terms of some hydropower projects, seen as too favorable to India.
• Public opposition in Bhutan to Indian involvement in the sector has arisen.

Trade Imbalance:

• India is Bhutan’s largest trading partner, but Bhutan faces a trade imbalance, importing more from India than it exports.
• Bhutan seeks greater access to the Indian market to reduce the trade deficit.

-Source: Hindustan Times