Embassy of India

India-Bhutan Development Cooperation

India’s development cooperation with Bhutan is an important element of close and enduring relations between India and Bhutan. This cooperation started right from Bhutan’s first five-year plan commencing in 1961 and has contributed to all five-year development plans including the current 13^th five-year plan (2024-29). A few cooperation projects were initiated before the first five-year plan such as hydro-meteorological stations, road projects, education, healthcare and fertilizers.

2. India also contributes to Bhutan outside the framework of latter’s five year plans through grants and concessional credits for construction of hydroelectric projects, Bhutan’s national initiatives such as Gyalsung programme, and education and training programmes under wider government schemes. Some prominent educational scholarships include ICCR, Ambassador’s Scholarship, IIT Kanpur, Nalanda University, etc. and Indian Technical and Economic Cooperation (ITEC) programme offers 325 seats annually to students, officials and experts in Bhutan. First bilateral scholarships covering thirty students dates back to 1955.

3. Development cooperation between India and Bhutan is governed by the overarching mechanism of Development Cooperation Talks or Plan Talks co-chaired by Foreign Secretaries of the two countries. These Talks cover the quantum, composition, implementation review and modalities of this cooperation. Project Monitoring Committee meetings and Coordination Meetings involving the two governments are also held regularly, including through monthly coordination meetings between Embassy and the Royal Government of Bhutan. Last Plan Talks were co-chaired by the two Foreign Secretaries on 30 July 2026.

4. India’s contribution to the thirteen five-year plans since the first plan commencing in 1961 at the original value are as follows:

5. 13^th Five Year Plan of Bhutan (2024-2029): The Government of India has committed development support of INR/Nu. 100 billion (10,000 crores) for the 13^th five-year plan period of Bhutan. Of this, INR/Nu. 70 billion (7,000 crores) has been earmarked for Project Tied Assistance (PTA), INR/Nu. 10 billion (1,000 crores) for High Impact Community Development Projects (HICDP), INR/Nu. 15 billion (1,500 crores) for Economic Stimulus Programme and INR/Nu. 5 billion (500 crore) for Programme Grant support to Bhutan.

6. 82 PTA projects have been agreed between the two governments and are under implementation in areas such as agriculture, irrigation, livestock, Information and Communications Technology, healthcare, school and higher education, education scholarships, capacity building and human resource development, connectivity, urban infrastructure, renewable energy and conservation of cultural heritage. Some of the major projects are:

• Construction of Nganglam-Dewathang road, Samrang-Jomotshangkha road; Improvement of Haa-Samtse highway, Samtse-Norbugang highway, inter-Dzongkhag connectivity roads and others
• Conservation of cultural heritage through construction/renovation of Sarpang Dzong, Lingzhi Dzong, Sangchen Choekhor and Rigsum Goenpa
• Infrastructure development in central schools, colleges of Royal University of Bhutan (RUB) and Jigme Wangchuck Power Training Institute (JWPTI)
• Infrastructure development for Royal Bhutan Police (RBP)
• Establishment of three mega agricultural farms, irrigation channels and chain link fencing
• Three dry ports in Pasakha, Gelephu and Nganglam
• 24/7 water supply in Thimphu
• 65-bedded Mother and Child Hospital in Mongar, new campus of Khesar Gyalpo University of Medical Sciences of Bhutan (KGUMSB), Multi-Disciplinary Super Speciality Hospital and National Traditional Medicine Hospital in Thimphu, renovation of General Hospital in Gelephu
• 500 kW Lunana Hydropower Plant
• New headquarters of National Centre for Hydrology and Meteorology in Thimphu including a state-of-the-art National Weather and Flood Warning Centre (NWFWC)
• National Emergency Operations Centre (NEOC)
• National Metrology Laboratory and Product Testing Laboratory
• Thimphu District Court
• Redevelopment of Phuentsholing Sports Association Ground
• Digital Skilling Programme for Bhutanese citizens

7. 572 HICDP projects amounting to INR/Nu. 8.49 billion (849 crores) have been approved by the two governments and are under implementation. HICDPs, earlier known as Small Development Projects (SDP), are short-gestation projects in areas such as drinking water, irrigation, farm roads, basic health units, and other semi-urban and rural infrastructure.

8. The ESP is a INR/Nu. 15 billion (1,500 crores) programme launched by the Royal Government of Bhutan in May 2024 to reinvigorate the domestic economy through fiscal and monetary measures in priority sectors such as agriculture and livestock, cottage and small industries, tourism, start-ups, creative industry, Desuung Skilling Programme (DSP), One Gewog One Product (OGOP), youth employment and training, and education.

Click here to view photographs of select development projects completed under 13^th Plan so far

9. 12^th Five Year Plan of Bhutan (2018-2023): For the 12^th five year plan from November 2018 - October 2023, India committed an amount of INR/Nu. 50 billion (5,000 crores) to Bhutan. A total of 83 PTA projects and 524 HICDP projects were implemented during this period through Indian grant. Some of the major projects executed under the 12^th Five Year Plan of Bhutan are:

• Reconstruction of Wangdue Phodrang Dzong and Pemagatshel Dzong
• Improvement of farm roads
• Pagrizampa Bridge
• Diana Kuenphen Bridge
• 40-bedded Dewathang Hospital
• Dhamdum Industrial Park
• Construction of Jigme Singye Wangchuck School of Law (JSW Law)
• Thimphu Aquatic Centre
• Multi Sports Halls in Tsirang, Paro, Haa etc.
• Infrastructure Development at Royal University of Bhutan (RUB) colleges

Click here to view photographs of select development projects completed under 12^th Plan

10. Project Dantak: Project Dantak is an overseas arm of Border Roads Organization of Government of India in Bhutan. It was established in 1961 under inter-governmental arrangement with the support of His Majesty the Third King of Bhutan. It played a significant role by constructing motorable roads across Bhutan. Some major historical projects completed by Project Dantak in Bhutan include Phuentsholing-Thimphu Highway, Thimphu-Paro Road, Trashigang-Samdrup Jongkhar Highway, Thimphu-Trashigang Highway, Paro Airport, Yongphula Airfield, Telecommunication and Hydropower Infrastructure, Sherubtse College, and India House Estate. Project Dantak continues to build and maintain several important roads throughout Bhutan.

Click here to read more about Project Dantak

11. Hydropower Projects: Financial support by the Government of India has been an important contributor to the development of several hydropower projects in Bhutan, including 336 MW Chukha HEP, 60 MW Kurichhu HEP, 1020 MW Tala HEP, 720 MW Mangdechhu HEP and 1020 MW Punatsangchhu-II HEP. The completed hydroelectric projects in Bhutan are owned and operated by the Royal Government of Bhutan. Currently, Punatsangchhu-I Hydroelectric Project is being constructed with a mix of grant and concessional credit provided by the Government of India.

Click here to read more about hydropower projects

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October 2026