Prime Minister Narendra Modi and his Bhutanese counterpart Lotay Tshering held wide ranging talks during his two-day visit and they discussed steps to further expand the bilateral partnership across several sectors as the two countries inked 10 MoUs to infuse new energy in their ties.

Modi, who was on his second visit to Bhutan and the first since his re-election in May this year, inaugurated 740MW Mangdechhu hydroelectric power plant and also launched stamps to commemorate five decades of India-Bhutan hydropower cooperation.

Modi also launched RuPay Card in Bhutan by making a purchase at Simtokha Dzong, built in 1629 by Shabdrung Namgyal, which functions as a monastic and administrative centre and is one of the oldest dzongs in Bhutan.

During his stay in Thimphu, Modi held wide-ranging talks with Lotay Tshering on August 17 and they discussed steps to further expand the bilateral partnership across several sectors.

The two countries inked 10 MoUs in the fields of space research, aviation, IT, power and education to infuse new energy in their ties.

Prime Minister Modi also called on Bhutanese King Jigme Khesar Namgyel Wangchuck and exchanged views on taking the “exemplary” India-Bhutan partnership forward.

Later, he met the fourth King of Bhutan Jigme Singye Wangchuk and expressed appreciation for his continued guidance on strengthening the unique India-Bhutan relationship.

Mangdechhu hydro power project

Prime Minister Narendra Modi on August 17 inaugurated the Mangdechhu hydroelectric power plant, one of the major projects under Bhutan’s initiative to generate 10,000MW hydropower by 2020 with the Indian government’s support.

The Rs 4,500-crore hydroelectric plant, touted as a Bhutan-India friendship project, is a 720MW run-of-river power plant built on the Mangdechhu River in Trongsa Dzongkhag district of central Bhutan. It was developed by the Mangdechhu Hydroelectric Project Authority (MHPA), which was jointly constituted by the Indian and the Bhutanese governments. 

“Hydropower is an important area of cooperation between our two countries. Together, the two countries have transformed the power of the rivers of Bhutan into not only electricity but also mutual prosperity. Today we have achieved another historic milestone of this journey with the inauguration of the Mangdechhu project,” Modi said in Thimphu.

The Mangdechhu project is funded by India through a 70 per cent loan and a 30 per cent grant. 

Construction of the hydropower project began in June 2012 and the first of the four units of the power plant was commissioned in June 2019. It is estimated to generate 2,923 GWh of electricity.  

Most of the electricity generated by the Mangdechhu hydropower project will meet the energy requirements of Bhutan and the surplus electricity will be exported to India.

The produced electricity is transmitted to the Jigmeling substation in Bhutan via two 80km-long 400kV double-circuit transmission lines.

Electricity to the Indian grid is transmitted from Jigmeling to Salakati.

India and Bhutan signed a protocol in April 2019, formalising the tariff for a period of 35 years. The tariff will be increased by 10 per cent every five years until the loan is repaid and 5 per cent thereafter.

India-Bhutan Friendship Treaty

Diplomatic relations between India and Bhutan were established in 1968 with the appointment of a resident representative of India in Thimphu.

Before this, India’s relations with Bhutan were looked after by India’s Political Officer in Sikkim.

The basic framework of India-Bhutan bilateral relations was the Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was revised in February 2007.

The India-Bhutan Friendship Treaty, which was signed in New Delhi on February 8, 2007, has come into force following the exchange of Instruments of Ratification between the two governments in Thimphu on March 2, 2007. 

The treaty not only reflects the contemporary nature of their relationship but also lays the foundation for their future development in the 21st century.

Key points of the treaty

*Reaffirming their respect for each other’s independence, sovereignty and territorial integrity.

*Recalling the historical relations that have existed between our two countries.

*Recognizing with deep satisfaction the manner in which these relations have evolved and matured over the years into a model of good neighbourly relations.

*Being fully committed to further strengthening this enduring and mutually beneficial relationship based on genuine goodwill and friendship, shared interests, and close understanding and cooperation.