India-Bhutan Relations- Explained Pointwise

Introduction

India-Bhutan have maintained a close relationship for many years. However, recently China has asked Bhutan to establish diplomatic ties with it and resolve the boundary issue “as soon as possible” to transform the relations between the two neighbours into “legal form”. The Chinese statement came after the conclusion of the meeting between the Foreign Minister of Bhutan, Tandi Dorji and the Chinese Foreign Minister, Wang Yi. This was any Bhutanese Foreign minister’s first ever visit to China. These developments in the China-Bhutan relations have deep implications for India-Bhutan relations. 

How have the India – Bhutan relations in the past  and what are the various areas of cooperation?

Since 1947, when Bhutan got its independence, it has been close and friendly with India. India is Bhutan’s biggest trading partner, and it provides Bhutan a lot of economic and technical help.  

What is the importance of Bhutan to India and vice versa?

Importance of Bhutan to India-

Strategic Importance- India considers Bhutan as a buffer state between India and China, as Bhutan shares its borders with China. It gives buffer for the Siliguri corridor(chicken’s neck) which connects the Indian mainland with the north eastern states.

Cultural Ties- Bhutan has deep cultural ties with India. Bhutan’s religion, language, and customs are heavily influenced by India’s culture. Additionally, Bhutan has been a strong supporter of India’s cultural diplomacy.  

Hydropower cooperation- Mutually beneficial hydropower cooperation with Bhutan forms the core of bilateral economic cooperation, providing clean power for India and economic prosperity for Bhutan. Hydroelectricity has become one of the biggest revenue earners of Bhutan, which makes Bhutan the country with the highest per capita income in South Asia today.  

Importance of India to Bhutan-

Economic Support- India is Bhutan’s largest trading partner and provides significant economic support. For instance, since 2014, India’s trade with Bhutan has almost tripled from US$484 million in 2014-15 to US$1.42 billion in 2021-22, accounting for about 80 percent of Bhutan’s overall trade.  

Security- India has been playing a crucial role in ensuring the security of Bhutan. For instance, India’s military helps secure Bhutan’s borders, and India has helped Bhutan in countering insurgent groups. For Ex- Doklam crisis 2017.

Diplomatic Support- India has been a strong diplomatic supporter of Bhutan. India has helped Bhutan in its international engagements, and India’s support has been essential in ensuring Bhutan’s sovereignty.  

Socio-economic development- India has been extending assistance to Bhutan’s socio-economic development since the early 1960s, including multi-sectoral project-tied assistance, small development projects and direct budgetary support.  

What are the recent developments in China – Bhutan relations?  

Border Dispute Resolution- China shares borders with 14 nations.  Of those, 14 nations, 12 nations have settled their borders. Bhutan and India are the only two countries with which border disputes still remain. China has now turned to Bhutan to settle their long standing border dispute.

North Bhutan- Jakarlung and Pasamlung areas in North Bhutan. China has built several villages in this area of Bhutan. West Bhutan- Doklam Plateau. China considers it an extension of its Chumbi Valley region, located between Sikkim and Bhutan. However, India considers the Doklam Plateau as Bhutanese territory. East Bhutan- Sakteng Wildlife Sanctuary. China considers it the part of its own territory. The wildlife sanctuary is located near the Arunachal Pradesh Border of India.

Push for Establishment of Formal Diplomatic Relations- China is pushing Bhutan to establish formal diplomatic relations by opening of embassies. Till now, Bhutan does not have any formal diplomatic relations with the P5 – the five permanent members of the UN Security Council.

Enhanced Economic Cooperation- China has been providing economic assistance to Bhutan, particularly in the areas of infrastructure development, agriculture, and tourism. In 2020, the two countries signed an agreement to establish a sister city relationship between Xining, the capital of Qinghai province in China, and Thimphu, the capital of Bhutan.

Endorsement of Xi Jingping’s Vision by Bhutan- Bhutan has endorsed the Global Security Initiative (GSI), the Global Development Initiative (GDI) and the Global Cultural Initiative (GCI) of Chinese President Xi jingping.

People-to-People Ties- In recent years, there has been an increase in people-to-people ties between China and Bhutan, with more Bhutanese students studying in China and Chinese tourists visiting Bhutan. In 2019, the two countries signed an agreement to promote tourism cooperation.

COVID-19 Pandemic- China has provided medical supplies and equipment to Bhutan to help fight the COVID-19 pandemic. In 2021, Bhutan received a donation of COVID-19 vaccines from China, which were used to vaccinate Bhutanese citizens.

What are the implications of the deepening China-Bhutan relations on India?

Strategic implications- If Bhutan gives into the claim of China over Doklam region, it will create deep security challenges for India. The Doklam region is located next to India’s Chicken neck (Siliguri Corridor). This corridor connects India’s mainland with the north-eastern region.

Economic implications- China’s growing economic influence in Bhutan could impact India’s trade and economic interests in the region. It could also lead to China gaining access to Bhutan’s natural resources like hydro-electricity, which could pose a challenge to India’s energy security.

Diplomatic implications- China’s growing influence in Bhutan could impact Bhutan’s traditional pro-India foreign policy. This could lead to Bhutan distancing itself from India and aligning more closely with China, which could have diplomatic implications for India in the region.

What should the Indian response to counter the growing Chinese influence in Bhutan? 

Further strengthening the Economic Ties- India must further strengthen the economic ties with Bhutan to counter the growing chinese economic influence. Recently, India has extended the additional “standby” credit facility to Bhutan and offered financial assurances to Bhutan for its 13th Five Year Plan and administrative reforms.

Focus on developing long-term bilateral arrangements- India must develop a long-term bilateral arrangement to ensure a reliable supply of critical commodities like petroleum, fertilisers, and coal to Bhutan. Also, India must develop closer relations in the energy sector with Bhutan. For ex- India has recently allowed Bhutan to sell power from its Basochhu hydroelectric project in India.

Resolution of Boundary Issues- India and Bhutan should work towards resolving their boundary issues through peaceful means. This will help in maintaining a peaceful border and will enhance the trust and confidence between the two countries.

Address China’s concerns- India can try to address some of China’s concerns regarding its presence in the region, such as by promoting transparency and dialogue in its engagement with Bhutan and other countries in the neighbourhood.

Use of multilateral platforms- India can use multilateral platforms such as the BRICS and the SCO to engage with China on issues related to the region and work towards finding mutually acceptable solutions.

Improving Connectivity- India can help Bhutan in improving its connectivity by providing better road and rail links. This will help in boosting trade and tourism between the two countries.

Enhancing Defence Cooperation- India and Bhutan can work towards enhancing their defense cooperation by increasing the frequency of joint military exercises and training programs. This will help Bhutan in improving its defense capabilities.

Addressing Environmental Concerns- India and Bhutan can collaborate on environmental issues by sharing their knowledge and expertise on sustainable development. India can also help Bhutan in addressing its concerns over climate change and natural disasters.

Promoting People-to-People Contact- To strengthen the cultural bond between the two countries, there should be more exchanges of students, academicians, and cultural groups between India and Bhutan. This will help in promoting mutual understanding and respect between the two countries.

Bhutan must also take into considerations India’s national security concerns before finalising any boundary settlement agreement with China. A border deal that addresses Bhutanese concerns in the north while preserving India’s red lines in the west will not necessarily undermine New Delhi’s interests. Rather than alarm, India must approach the boundary negotiations with a greater understanding of Bhutan’s reasoning, and with confidence that India’s long-trusted neighbour will take both India’s interests and its own into consideration before any final agreement.