Bhutan King Jigme Khesar Namgyel Wangchuck met Prime Minister Narendra Modi in New Delhi. Both the dignitaries have discussed the various ideas to further strengthen the close and unique India-Bhutan friendship.

India-Bhutan relations

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

• Diplomatic relations between India and Bhutan were established in 1968 with the establishment of a special office of India in Thimphu.

• An agreement on trade and commerce between India and Bhutan was first signed in January 1972. Since then, the agreement has been renewed/revised many times.

• In November 2016, both countries signed an Agreement on Trade, Commerce and Transit, which provides for a free trade regime aimed at boosting bilateral trade for mutual benefit. 

• The government of India has consistently supported the socio-economic development of Bhutan. Hydropower cooperation between the two countries is an example of win-win cooperation. 

• India has been extending economic assistance to Bhutan’s socio-economic development since the early 1960s when Bhutan launched its Five Year Plans.

• India had committed financial support of Rs 4,500 crore for the 12th Five Year Plan (FYP) of Bhutan (2018-23). It comprises Rs 2,800 crore for Project Tied Assistance, Rs 850 crore for High Impact Community Development Projects (HICDP) and Rs 850 crore towards Programme Grant. India has also committed a ‘Transitional Trade Support Facility’ of Rs 400 crore, to be provided over the 12th FYP of Bhutan.

• Mutually beneficial hydropower cooperation with Bhutan forms the core of bilateral economic cooperation. For Bhutan, hydropower development continues to be a vital catalyst for socio-economic development. The ongoing cooperation between India and Bhutan in the hydropower sector is covered under the 2006 bilateral agreement for cooperation and its protocol signed in 2009. Four hydroelectric projects (HEPs) totaling 2,136 MW are already operational in Bhutan and are supplying electricity to India.

• Two hydroelectric projects, 1,200 MW Punatsangchhu-I, 1,020 MW Punatsangchhu-II in inter-governmental mode and Kholongchu HEP (600 MWs) under the joint venture mode are under various stages of implementation. 

• India remains Bhutan’s largest trading partner. In 2020-21, the bilateral trade reached $1,083 million, of  which, India's exports to Bhutan comprised $694 million and India‘s imports from Bhutan amounted to $389 million.

• Around 600 big and small projects in the areas of infrastructure development, roads and bridges, industries, agriculture, e-governance, community development projects like irrigation channels, farm roads, block connectivity roads, basic health units, etc have been identified by the two sides and are at various stages of implementation.

• Apart from hydro-power cooperation and development partnership has moved into new and emerging areas with full interoperability of the flagship digital project RuPay, which has been successfully completed.

• BHIM UPI was launched in Bhutan on July 13, 2021. Bhutan became the first foreign country to adopt UPI standards for its QR deployment and the first country in the immediate neighbourhood to accept mobile-based payments through the BHIM app.

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