Embassy of IndiaThimphu, Bhutan

Embassy of India

Thimphu
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India -Bhutan relations

Diplomatic relations between India and Bhutan were established in 1968 with the establishment of a Special Office of India in Thimphu. The basic framework of India- Bhutan bilateral relations has been the Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was revised in February 2007.

2. The unique bilateral relations, characterized by mutual trust and understanding, have been sustained by a tradition of regular high-level visits between the two countries. Prime Minister Tshering Tobgay attended the swearing-in ceremony of Prime Minister Modi in 2014. India was the first country of visit (27 - 29 December 2018) of Prime Minister Lotay Tshering after becoming Prime Minister in 2018. Prime Minister Lotay Tshering again visited India on 30 - 31 May 2019 to attend the swearing-in ceremony of PM Modi. His Majesty The King of Bhutan along with Her Majesty the Queen Jetsun Pema Wangchuck and HRH Prince Jigme Namgyel Wangchuck visited India from 31 October - 3 November 2017. His Majesty The King of Bhutan visited India on 17 August 2018 to attend the state funeral of the former Indian PM Shri Atal Bihari Vajpayee. His Majesty the King of Bhutan also visited India from 14 - 16 September 2022 and met with PM Shri Narendra Modi and EAM Dr. S. Jaishankar.
3. Bhutan was Prime Minister Narendra Modi’s first overseas visit after assuming responsibility to the post of PM in 2014. Shortly after his re-election in 2019, Prime Minister Shri Narendra Modi undertook a State Visit to Bhutan on 17 - 18 August 2019, during which he met His Majesty the King, His Majesty the Fourth King and the Prime Minister of Bhutan and comprehensively reviewed all aspects of the bilateral relationship. There have been regular political exchanges at the Ministerial level and meetings of various bilateral mechanisms.
4. His Majesty The King of Bhutan conferred the Order of the Druk Gyalpo (Ngadag Pel gi Khorlo), Bhutan’s highest civilian decoration, on PM Shri Narendra Modi during Bhutan’s 114th National Day celebrations on 17 December 2021. The award recognizes the PM’s outstanding contribution to strengthening India-Bhutan friendship. PM Modi is the first foreign national to receive this award.

Assistance during the Covid-19 Pandemic

5. Bhutan was the first country to receive the Made in India Covishield vaccines under Ministry of External Affairs Vaccine Maitri Initiative. A total of 550,000 doses of Covishield were given to Bhutan as a gift. The Government of India has delivered total 12 medical consignments to Bhutan containing essential medicines. The 12^th medical consignment was handed over by EAM to Bhutan on 29^th April 2022 during his visit.

GyalSung Project

6. India will be extending grant assistance of INR 2 billion to the Gyalsung Project - a visionary initiative of His Majesty the King of Bhutan, which will enable the youth to equip themselves with critical skills and to contribute in nation-building efforts. This assistance to Gyalsung would be over and above GoI’s commitment of INR/Nu 50 billion for the 12th Five Year Plan. At a special ceremony at Simtokha Dzong on 25 February 2023, the initial grant assistance of INR 1 billion was handed over to the Gyalsung Project.

Developmental cooperation

7. Over the past decades, India has contributed significantly to the socio-economic development of Bhutan in line with the priorities and needs of the people and Government of Bhutan. India’s development assistance to Bhutan is largely coordinated by the overarching mechanism of Bilateral Development Cooperation Talks or Annual Plan Talks wherein the components of assistance and modalities are decided jointly by both sides. India has committed an assistance package of INR 4500 crores to Bhutan for the 12th Five Year Plan (FYP), comprising INR 2800 crores for Project Tied Assistance (PTA), INR 850 crores for High Impact Community Development Projects (HICDPCs/erstwhile Small Development Projects), and INR 850 crores towards Program Grant/Development Subsidy. Under the 12^th Five Year Plan, India is implementing 82 PTA Projects and 524 HICDPs in Bhutan. In addition, India has also committed INR 400 crores towards Transitional Trade Support Facility and INR 100 crores towards Tariff Adjustment of Mangdechhu Hydroelectric Power Project.
8. The key areas of focus of India’s assistance continues to be those which have a direct bearing on the lives of the common people. The scope of PTA projects range from agriculture to irrigation, ICT, health, education, scholarships, labour and human resource development, roads, energy, urban development, judiciary, culture, constitutional offices. The HICDPs include projects with short gestation period, and cover areas like the development of drinking water supply networks, irrigation canals, building of farm roads, basic health units and other rural infrastructure. The Program Grant component is a direct budgetary support to Bhutan. Foreign Secretary Shri Vinay Kwatra co-chaired the 4^th India-Bhutan Development cooperation talks on 19 January 2023 in Thimphu to oversee the progress of various projects.

Hydro-power cooperation

9. The two countries have enjoyed longstanding mutually beneficial cooperation in the hydro-sector. Till date the Government of India has constructed four major hydro-electric projects (HEPs) in Bhutan totaling 2136 MW, including 336 MW Chukha HEP, 60 MW Kurichhu HEP, 1020 MW Tala HEP and the recently commissioned 720 MW Mangdechhu HEP. Currently, there are two HEPs under construction: 1200 MW Punatsangchhu–I HEP and 1020 MW Punatsangchhu–II HEP. In 2021, Bhutan exported electricity worth Rs. 2443 crores to India. Power Secretary Shri Alok Kumar visited Bhutan from 27 October to 1 November, 2022 and held talks with his counterpart to comprehensively review different aspects of India-Bhutan Hydropower Cooperation.
10. The 720 MW Mangdechhu Hydroelectric Power Project was handed over by the Mangdechhu Hydroelectric Project Authority to the Royal Government of Bhutan on 27 December 2022. The Project was inaugurated by Prime Minister Shri Narendra Modi and Prime Minister Lyonchhen Dr. Lotay Tshering in August 2019, and has played a key role in increasing Bhutan’s Hydropower revenue by about 31%. The Project was awarded the prestigious Brunel Medel for Excellence in Engineering by Institute of Civil Engineers, London in 2020. Both Government also signed the Settlement Nodal Agency (SNA) agreement in December 2022, to streamline the cross border trade of electricity between India and Bhutan.

Cooperation in New and Emerging Areas

11. Space cooperation is a new and promising area of bilateral cooperation. On 17 August 2019, Prime Minister Shri Narendra Modi and Prime Minister Lyonchhen (Dr) Lotay Tshering jointly inaugurated the Ground Earth Station of the South Asia Satellite (SAS) in Thimphu. PM Modi had offered increased bandwidth on an additional transponder as a gift to the people of Bhutan.

12. Government of India extended capacity building opportunities to Bhutanese engineers from December 2020 at the UR Rao Satellite Centre, ISRO in Bengaluru. The two sides collaborated on the India-Bhutan SAT, the first satellite jointly developed by India and Bhutan, which was launched on 26 November 2022 from ISRO’s Satish Dhawan Space Centre at Sriharikota. A high-level delegation from Bhutan led by Minister of Information and Communications Lyonpo Karma Donnen Wangdi visited Sriharikota to witness the launch of the satellite. The India-Bhutan SAT will provide high resolution images of Earth and, thereby, help Bhutan in natural resources management. The secondary payload, which was designed and built by Bhutan, will function as a digital repeater from space serving amateur radio users community. ISRO has also collaborated with Bhutan on establishing a ground station in Thimphu for receiving and processing the data from this satellite.

13. Fin-tech is another new domain of collaboration between India and Bhutan. The RuPay Card was launched in Bhutan in two phases – Phase I was launched in 2019, to enable acceptance of payments in Bhutan using RuPay cards issued by Indian banks. Phase II was launched in 2020, to enable acceptance of payments in India using RuPay cards issued by Bhutanese banks, thereby enabling the full inter-operability of the flagship digital project. This is meant to benefit Indian visitors in Bhutan and Bhutanese citizens who travel and transit to India for education, tourism and work. In 2021, India’s Bharat Interface for Money (BHIM) application was launched in Bhutan with the objective of promoting cashless payments between the two nations.
14. The integration of Bhutan’s DrukRen with India’s National Knowledge Network is a key cooperation in the domain of e-Learning. This integration creates an information highway between the universities, research institutions, libraries, health-care and agricultural institutions of the two nations. The network is being actively used by 28 active DrukREN members including the top universities, colleges and hospital in Bhutan and is benefitting more than 10,000 users. In light of the active utilisation of the network and Bhutan’s desire to add more institutions, colleges and hospitals to NKN-DrukREN, Government of India increased the bandwidth from 1 GBPS to 5 GBPS for the connectivity link from June 2022.
15. The E-library project complements Bhutan's efforts at digital transformation and e-learning. The project commenced its work in September, 2016 and was handed over to the Ministry of Education on June 26, 2020. The project includes the development of an e-library portal, establishment of a data centre in Thimphu Tech Park, creation and management of e-content and the creation of e-libraries in 49 schools and 12 colleges in each district of Bhutan. The e-library project is presently benefiting 160,000 high-school students and 9800 college-going students.

Commerce and Trade

16. India has consistently been Bhutan’s top trading partner – both as an import source and as an export destination. Since 2014, India’s trade with Bhutan has almost tripled from USD 484 million in 2014-15 to USD 1422 million in 2021-22, accounting for about 80% of Bhutan’s overall trade. Our unique trade relations with Bhutan are governed by the 2007 India-Bhutan Friendship Treaty and the 2016 India-Bhutan Agreement on Trade, Commerce and Transit, which establishes a free trade regime between the two countries and also provides Bhutan duty free transit of goods to/from third countries.

17. India’s top exports to Bhutan are petrol & diesel, passenger cars, rice, wood charcoal, cellphones, coke and semi-coke, soya-bean oil, excavators, electric generators & motors, parts for turbines, transport vehicle, bitumen. India’s top imports from Bhutan are electricity, Ferro-silicon, Ferro-silico-manganese, portland pozzolana cement, dolomite chips, ordinary portland cement, Silicon Carbide, cardamom, betel nut, oranges, semi-finished products of iron or non-alloy steel, boulders, etc.

18. India remains the leading source of investments in Bhutan, comprising 50% of the country’s total FDI. Currently, there are about 30 Indian FDI companies in Bhutan in various sectors – banking, manufacturing, electricity generation, agri / food processing, ITES, pharmaceuticals, hospitality, and education.

19. On 16 November 2022, the Reserve Bank of India (RBI) signed an agreement with the Royal Monetary Authority of Bhutan (RMA) for providing an additional currency swap support to the RMA of up to USD 200 million equivalent in INR (approximately INR 1657 crore). This support is in addition to the extant currency swap support of USD 200 million INR equivalent extended by the RBI. The swap agreement between the RBI and the RMA is intended to provide a backstop line of funding for RMA for short-term foreign exchange liquidity requirements or to meet any balance of payments and liquidity crises. This facility will also help to promote trade and investment between the two countries.

20. The Minister of Economic Affairs of Bhutan Lyonpo Loknath Sharma visited India three times in 2022 for meetings with his GoI counterparts as well as to attend various conferences and bilateral meetings and to discuss issues of mutual bilateral interest and ways to further increase trade and commercial ties between the two countries.

21. The lastIndia-Bhutan Commerce Secretary level meetingwas held in New Delhi on 03 November 2021. The Indian delegation was led by Shri B.V.R. Subrahmanyam, Commerce Secretary and the Bhutanese delegation was led by Dasho Karma Tshering, Economic Affairs Secretary.

22. Government of India has collaborated on a number of initiatives for strengthening the startup eco-system in Bhutan, at various levels, such as the Bhutan-India Startup Summit in 2020 during which Bhutanese startups exchanged ideas and knowledge with top Indian industry representatives; virtual training and mentorship to Bhutanese entrepreneurs during the Covid pandemic; as well as on-site training at premier institutes in India for capacity building on entrepreneurship development and packaging.

Education and Capacity Building

23. Many Bhutanese students benefit from scholarships provided by the GOI for studying in Indian educational institutions. In addition, many Bhutanese youth also enroll as self-financed students in Indian universities. During the State visit of Prime Minister of India to Bhutan in 2019, four MOUs on cooperation in STEM Education were signed between the Royal University of Bhutan and the Indian Institutes of Technology at Delhi, Bombay, Kanpur and the National Institute of Technology, Silchar.
24. The current offers from India to Bhutan in terms of Scholarship Schemes include the Ambassador’s Scholarship, prestigious Nehru Wangchuck Scholarship, Five-Year Plan project-tied assistance based Undergraduate Scholarship, Nalanda University Scholarship, ICCR Undergraduate Engineering scholarships. ICCR, AYUSH, BIMSTEC and SAARC scholarships have also provided a strong foundation to the bilateral engagement in education. Bhutanese students have also been availing of seats at IIT-Kanpur under India-Bhutan Friendship Scholarship, IIT Gandhinagar Global Fellowship and the Rashtriya Raksha University Scholarships. Every year, approx. 1,000 Bhutanese students studying in Indian colleges and institutes benefit from the award of the Ambassador’s Scholarship, which was instituted in 2001.

25.Under the capacity-building ITEC program, about 325 slots for the in-person training, along with unlimited e-ITEC slots, are allotted annually to Bhutan for upgrading administrative and technical skills of government officials and private sector employees in Bhutan. In 2022, Government of India also customised special ITEC progammes for training 100 Bhutanese young entrepreneurs at the prestigious Entrepreneurship Development Institute of India (EDII), Ahmedabad and 30 entrepreneurs at the Indian Institute of Packaging.

Cultural and Buddhist links

26. A number of Bhutanese pilgrims undertake travels to Bodh Gaya, Rajgir, Nalanda, Sikkim, Udayagiri, and other Buddhist sites in India. As part of the 50^th anniversary celebration of diplomatic relations, His Holiness the Je Khenpo (the head monk of Bhutan) visited Rajgir in November 2018 to preside over the ground breaking ceremony to construct a Bhutanese Lhakhang (temple) and for World Peace Prayer in Rajgir in Bihar.
27. The Zhabdrung Statue, currently on display at the Simtokha Dzong in Bhutan, has been loaned by the Asiatic Society, Kolkata to the Royal Government of Bhutan. Dharma Raja or Zhabdrung, is the title of Ngawang Namgyal, a 16^th century Buddhist monk – a revered figure in Bhutan, regarded as the founder of the modern nation state of Bhutan. On June 19, 2021, a 3.3 feet tall bronze cast statue of Lord Buddha in a lotus pose, commissioned by Indian Council for Cultural Relations (ICCR), was handed over to the Royal Government of Bhutan, in the presence of Foreign Minister Dr. Tandi Dorji. On June 20, 2021, coinciding with the birth anniversary of Guru Padmasabhava, the statue was consecrated and enshrined at the grand Kuenray (sanctum sanctorum) of the Tashichhodzong.

Indian Diaspora in Bhutan

28. About 50,000 Indians are presently working in Bhutan in the sectors of Infrastructure Development, Education, Trade and Commerce, Arts, Health and Information Technology, signifying close people to people ties between India and Bhutan. Their contribution and service in the overall development of Bhutan has been well recognised. In January 2023, Mr. Sanjeev Mehta, Professor of Economic at the Royal Thimphu College, Thimphu was awarded the Pravasi Bhartiya Samman Award in recognition of his outstanding acheivements in the field of education and three decades of service in Bhutan.

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07 March 2023

Key Visits from India to Bhutan (Since January 2014)

Key visits from Bhutan to India (Since October 2017)

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07 March 2023