India to contribute ₹4,500 cr. for Bhutan’s five-year plan

India to contribute ₹4,500 cr. for Bhutan’s five-year plan

News:

India contributes Rs 4,500 crore to Bhutan’s 5-year plan and assures full cooperation in hydro-power projects

Important Facts:

• The year 2018 celebrates the Golden Jubilee of the establishment of formal diplomatic relations between India and Bhutan.
• Recently, Bhutan has also opened a Consulate in India’s north-eastern city of Guwahati to mark the completion of 50 years.

India-Bhutan Treaty of Friendship and Cooperation

• In 1949 India and Bhutan signed the Treaty of Friendship and Cooperation. This treaty formed the basis for the beginning modern relations between the two neighbors.
• One of the most important provisions of the treaty, ‘Article 2’ declared that Bhutan’s internal affairs shall function without any interference from India while the foreign relations will continue to take place under its guidance.
• In 2007, ‘Article 2’ of the 1949 treaty was revised, forever changing the terms of the erstwhile India-Bhutan relations.
• Last year Bhutan has also decided to withdraw from the BBIN Motor Vehicle Agreement for the reason that it would adversely affect its environment and sovereignty.
• Bhutan has historically shared deep religio-cultural links with India. Guru Padmasambhava, a Buddhist saint who came to Bhutan from India, played an influential role in spreading Buddhism and cementing traditional ties between people in both nations.
• Bhutan has been central to India’s two major policies – the ‘Neighborhood First Policy’ and the ‘Act-East Policy’

Recent development in India-Bhutan Co-operation:

• A transitional Trade Support Facility of Rs 400 crore over a period of five years was also announced to strengthen bilateral trade and economic linkages.
• Both sides have agreed on the electricity tariff rates on Mangdechhu hydro-power project which is expected to be completed soon.
• Three hydro-power projects in Bhutan with a total capacity of 1,416 MW, which are operational, have been done by India. Out of this, three-fourth of the power generated is exported to India and the rest is used for domestic consumption.
• Both countries also reiterated their commitment to jointly develop 10,000 mw of hydropower generating capacity in Bhutan.
• Cooperation in the space sector is another area where the two countries are working together and a ground station will be soon developed in Bhutan by the Indian Space Research Organisation (ISRO) to reap the benefits of the South Asian Satellite.
• Once completed, this will help in weather information, tele-medicine and disaster relief work in remote areas of Bhutan
• Bhutan has decided introduce the India-launched RuPay cards, which is expected to boost people-to-people ties between the two countries.

Issues existed between Bhutan and India

• One of the most commonly observed issues is India’s paternalistic attitude towards Bhutan and a tendency to take Bhutan’s loyalty for granted.
• India withdrew all subsidies on cooking gas and kerosene causing a drift in Indo-Bhutan bilateral relations when Bhutan was seen getting comfortable with Beijing.
• India’s actions were seen as meddling in Bhutan’s internal politics.
• Another issue is Bhutan’s geographically disadvantaged location that has made its economy hugely dependent on India, giving India an undue advantage over Bhutan’s trade and commerce.
• 60 percent of Bhutan’s expenditure is on imports from India; 90-95 percent of what Bhutan borrows from India finds its way back to India
• Over the years, critics have argued that the economic benefits from collaboration in hydropower have declined.
• China is another important dimension in India-Bhutan relations. In recent years, China has tried to establish its influence on Bhutan. It continues to stake claims to important area such as Chumbi valley and Doklam.
• Of late, the Bhutanese government is also willing to have a deeper engagement with China in areas of tourism, education, culture, agriculture etc.
• Hydropower generation is the single most important area of mutually beneficial cooperation in India-Bhutan ties. Under the 2006 Agreement on Cooperation in Hydropower, India has pledged to assist Bhutan in developing at least 10,000 MWs of hydropower and import the surplus electricity to India by 2020.

Conclusion:

• India and Bhutan share a strong relationship that is a perfect example of friendship and cordiality in South Asia.
• For India to bolster this indispensable partnership may not be too difficult, provided India’s assistance to Bhutan is more about making it self-sufficient militarily, politically as well as economically.
• India along with providing financial assistance to Bhutan must also focus on people to people engagement through cultural exchange program.