Embassy of India Thimphu,Bhutan

Bhutan in MEA Annual Report for the year 2004-05

2004-05

A. Excerpts from MEA Annual report wrt Bhutan

As close friends and neighbours, India’s relations with Bhutan are characterized by mutual understanding, trust, confidence and multifaceted cooperation in a wide range of areas for the mutual benefit of the people of the two countries.

This relationship is sustained and enhanced by the exchange of regular visits, including at the highest level. During the year 2004, His Majesty King Jigme Singye Wangchuck of Bhutan was the Chief Guest at the Republic Day celebrations 2005. Three Memoranda of Understanding were signed during the visit. These relate to (i) Preparation of feasibility studies for establishment of railway linkages between bordering towns of India and Bhutan; (ii) Preparation of Detailed Project Reports (DPRs) for two hydro-electric Projects in Bhutan and (iii) Cooperation in Agriculture and allied sectors. The delegation accompanying the King included the Crown Prince and the Foreign Minister of Bhutan. His Majesty the King of Bhutan had earlier visited India from 24-29 November 2004. Her Majesty Ashi Sangay Choden Wangchuck, youngest of the four Queens of Bhutan, also visited India from 6-21 February 2005.

Other dignitaries from Bhutan who visited India during the current year include Lyonpo Khandu Wangchuk, Foreign Minister, Lyonpo Sangay Ngedup, Agriculture Minister, Lyonpo Thinley Gyamtsho, Education Minister and Dasho Ugen Dorji, Speaker of National Assembly.

From India Shri K. Natwar Singh, External Affairs Minister and Shri Rao Inderjit Singh, Minister of State for External Affairs visited Bhutan in October 2004.

Development cooperation with Bhutan, particularly in the hydropower sector, continued satisfactorily. The construction of 1020 MW Tala project is progressing well. DPR on Punatsangchu Phase – I is expected to be completed in first quarter of 2006 and DPRs on two more projects (Punatsangchu Phase – II and Mangdechu Projects) would be initiated shortly.

The Government of India assistance package to 9th Plan of Bhutan was also reviewed during the visit of the King of Bhutan in January 2005 and an additional Rs. 280 crores towards Development subsidy was pledged.

Other important developments during the current year include the signing of (i) an MoU on Project Implementation Mechanism. The Project Implementation mechanism would streamline monitoring of GOI assisted Projects under implementation in Bhutan and also simplify the procedures for making financial releases to the Projects (ii) a Protocol for repayment of Government of India loan extended to Kurichhu Project. The project, completed at a cost of Rs. 560 crore, had a 40 percent loan component, which is now being repaid by the Royal Government of Bhutan.

To mitigate the problem of floods in both countries, a Joint Group of Experts on Flood Management was constituted in August 2004. The Group will assess the probable causes and effects of the recurring floods and erosions in the southern foothills of Bhutan and adjoining plains of India. Two meetings of the Group have already been held.

India and Bhutan have also strengthened cooperation in the field of security and border management in the aftermath of the successful military action taken by the Royal Bhutan Army in December 2003-January 2004 against Indian Insurgent Groups. An India-Bhutan Group on Border Security and Management that was established in March 2004 has made several practical recommendations relating to training, exchange of information and better cross-border coordination between the security and administrative authorities of the two countries, which are being implemented.

B. Budget allocation to Bhutan