Embassy of IndiaThimphu

Bhutan in MEA Annual Report for the year 2020-21

A. Excerpts from Ministry of External Affairs Annual report related to Bhutan

India and Bhutan share a special partnership, anchored in mutual understanding and respect, reinforced by a shared cultural heritage and strong people-to-people links. The multi-dimensional relations between the two countries deepened over the course of the year, with sustained growth in the traditional as well as new areas of cooperation including hydropower, ICT, health, culture, agriculture, space, tertiary education, and digital and financial connectivity.

High-Level Exchanges and Dialogues

The special relationship is sustained by the tradition of regular high-level exchanges and interactions between the two countries. On 16 April 2020, Prime Minister spoke on the telephone with Prime Minister Lotay Tshering. The two Prime Ministers discussed the regional situation in the wake of Covid-19 pandemic and both the leaders expressed happiness at the progress made in implementing the special arrangements agreed between the leaders of the SAARC countries. Earlier, the two leaders had interacted virtually in March 2020 during the SAARC leaders conference on Covid-19.

On 17 September 2020, the Prime Minister held telephonic conversation with Jigme Khesar Namgyel Wangchuck, the King of Bhutan. They discussed all aspects of bilateral relations and also explored avenues for further strengthening and expanding the multifaceted India-Bhutan ties.

Prime Minister and Prime Minister of Bhutan Lotay Tshering launched phase-II of the RuPay Card during a virtual ceremony on 20 November 2020, that will complete the interoperability of the RuPay Cards in both the countries. During the event, both the Prime Ministers welcomed recent initiatives in other areas of technological cooperation, in particular, in the space sector, signing of a framework MoU for ‘Cooperation in the Peaceful Uses of Outer Space’. Both leaders also underlined that the unique relations between the two countries are not only invaluable but also unparalleled examples for the world. In pursuant to the cooperation in the space sector, four Bhutanese space engineers underwent training at ISRO from December 2020 to February 2021 to work on the joint development of a small satellite for Bhutan.

In the virtual presence of EAM and Tandi Dorji, Foreign Minister of Bhutan, the Concession Agreement for 600 MW Kholongchhu (Joint Venture) Hydro Electric Project was signed between the Royal Government of Bhutan and Khologchhu Hydro Energy Limited on 29 June 2020. On the occasion, EAM and Foreign Minister of Bhutan emphasized the significance of hydropower development as an important pillar of mutually beneficial bilateral economic cooperation.

Developmental Cooperation

India’s extensive development partnership with Bhutan is people-centric and is based on priorities and needs set by the Government of Bhutan. Government of India has committed financial support of Rs. 4500 crores for the 12th Five Year Plan (FYP) of Bhutan (2018-23), comprising Rs. 2800 crores for Project Tied Assistance, Rs. 850 crores for High Impact Community Development Projects and Rs. 850 towards Program Grant. Government of India has also committed a ‘Transitional Trade Support Facility’ of Rs. 400 crores, to be provided over the 12th FYP of Bhutan. India also provided an early release of Rs. 501 crores from the Government of India committed Financial Support of Rs. 4500 crores for the 12th FYP of Bhutan, to support Bhutan’s efforts in mitigating the impact of Covid-19.

180 new High Impact Community Development Projects worth Rs. 298 Crore in various sectors such as irrigation channels, farm roads, basic health units, etc. have been identified in April and October 2020 for implementation during the 12^th FYP of Bhutan. These projects are under various stages of implementation.

India is also providing technical support for the planning of a Multi-Disciplinary Super Speciality Hospital (MDSSH) in Bhutan. An expert team led by HSCC Ltd. visited Bhutan in March 2020 and continued discussion with the Royal Government of Bhutan for preparation of DPR of the project.

Hydropower Cooperation

The mutually beneficial hydropower cooperation reached another milestone with the signing of the Concession Agreement for 600 MW Khologchhu Hydroelectric Project on 29 June 2020. Both governments maintained close coordination to expedite implementation of two ongoing major projects – the 1200 MW Punatsangchhu-I Hydroelectric Project and the 1020MW Punatsangchhu-II Hydroelectric Project. Government of India has also released the committed amount of Rs. 100 crores as ‘Adjustment to Mangdechhu Tariff’ which is being utilised for supplementing revenue-generating activities in Bhutan. The jointly constructed 720 MW Mangdechhu Hydroelectric Project was awarded the ‘Brunel Medal’ for ‘Excellence in Civil Engineering’ by the London based Institute of Civil Engineers.

Education and Capacity Building

Government of India has instituted three new India-Bhutan Friendship Scholarships for Bhutanese students who are offered admission in IIT Kanpur. In addition to this, Government of India offers various scholarship schemes, such as the Ambassador’s Scholarship, Nehru Wangchuck Scholarship, Undergraduate Scholarship under Project Tied Assistance, Nalanda University Scholarship, ICCR scholarship, SAARC scholarship to Bhutanese students. AYUSH scholarship can also be availed by students from Bhutan. India is Bhutan’s main partner in the capacity building of government officials of the Royal Government of Bhutan. Under ITEC training programme, approximately 325 training slots are assigned to Bhutan out of which 279 slots were utilized in 2019-2020. During the period from April-November 2020, 86 Bhutanese nationals have availed training opportunities through e-ITEC training programmes. Customized e-ITEC training programmes are also being designed for Bhutanese finance sector professionals in the areas of SEBI policies and security market regulations as well as for judicial officers of Bhutan. Besides, a number of government officers from Bhutan are also being trained in premier government training institutes including LBSNAA, SSFSI, NACEN, and SVP-NPA.

Trade and Economic Cooperation

India continued to be Bhutan's largest trading partner. In 2019, the bilateral trade reached around Rs. 9647 crores. Both governments continued to engage in taking measures to facilitate trade and mutual investments. A new trade route was opened via Torsha Tea Garden (India) and Ahllay (Bhutan). New trade points at Nagarkata, Agartala, and Pandu & Jogighopa riverine ports will also be operational shortly.

In October 2020, formal market access was granted for export of Bhutanese agri-products (apple, areca nut, ginger, mandarin, potato) to India. Similarly, Indian agri-products (okra, onion, tomato) were granted formal market access to Bhutan. The 1st Plant Quarantine office on the India-Bhutan border was opened at the Land Customs Station in Jaigaon, India to facilitate exports of agricultural products from Bhutan to India.

Cooperation during Covid-19 pandemic

In line with India-Bhutan unique and special relations, Government of India ensured continuous supply of trade and essential items to Bhutan, despite Covid-19 related lockdowns. Government of India so far has provided essential medicines and medical supplies, including Paracetamol, Hydroxychloroquine, PPEs, N95 masks, x-ray machines and test kits, etc to the Royal Government of Bhutan. India has also entered into an ‘Air Travel Arrangement’ or ‘Transport Bubble’ agreement with Bhutan for the resumption of flights in a gradual manner with Bhutan. The flights were suspended due to the Covid-19 pandemic. India is also collaborating with Bhutan for conducting Phase-III clinical trials of the Covid-19 vaccine candidates.

150,000 doses of Covishield vaccine were sent to Bhutan in January 2021 as grant assistance.

Miscellaneous

Two diplomats from Bhutan attended the six-month Induction Training Programme (ITP) along with IFS officer-trainees of the 2019 batch from 09 December 2019 to 24 July 2020.

B. Budget allocation to Bhutan under Technical and Economic Cooperation

C. List of MoUs signed between India and Bhutan in 2020-21

D. Virtual Summits held in 2020-21

****