Roomana Hukil
Research Officer, IRES, IPCS
In his maiden foreign visit as premier, Prime Minister
Narendra Modi, recently went to Bhutan to strengthen
development cooperation and further enhance economic
ties. Although there are no big agreements on the anvil,
the prime minister's short visit marks his high regard
for the South Asian neighbourhood over the extended
international community. Prime Minister Modi stated
that India and Bhutan are 'made for each other',
considering the historical and traditional linkages
between the two.
Why is Bhutan Vital for India Today?
The visit to Bhutan exemplifies India’s strategic effort to
enhance cooperation with the country. Nepal, Sri Lanka
and Bangladesh were the other countries that were
considered for the prime minister’s first foreign tour.
However, trans-boundary issues and bilateral concerns
hindered the PM from visiting the aforementioned
places.
India and Bhutan have shared the friendliest ties in the
past years when compared to India’s other South Asian
neighbours. The country’s economies are closely related
to each other despite pressure and resistance from
powerful countries. China, for instance, has been trying
to win Bhutan over and reduce India’s growing
influence. However, Bhutan has made a conscious effort
to avoid taking any decision contrary to India’s national
interests, which India is cognisant of. Significantly, fuel
subsidies to Bhutan were temporarily rolled back by
India in 2013. Although the decree was later revoked,
the roll-back somewhat soured bilateral relations. The
PM’s visit may help to bring these ties back on track.
Both India and Bhutan are interdependent States. India
is Bhutan’s largest trading partner (99 per cent imports
and 90 per cent exports), and Bhutan is an important
partner because India’s economy significantly relies on
Bhutan for hydropower, besides other socio-political and
economic overlaps. Bhutan is set to be a major source
of power for India in the upcoming years. India is
expected to reap dividends worth US$2 billion by
investing in the construction of three hydro-electric
projects in Bhutan with a combined installed capacity of
1400 megawatts (MW) and from three other projects,
totalling 3000 MW.
Moving Beyond Rhetoric
Power sector engagement has been the primary avenue
for India and Bhutan in taking their relationship forward.
Power diplomacy with Bhutan has been India’s most
successful story. However, there is a deepening divide
within Bhutan on India that is hindering bilateral
relations.
Besides offering to intensify cooperation on the
hydropower front, Modi emphasised the essence of
greater educational contacts and stated that India will
double the present number of scholarships for the
Bhutanese in India, worth approximately US$ 3 million.
Modi stated that India will also assist Bhutan in the
setting up of a digital library that will provide access to
over two million books and periodicals. He also
inaugurated the Supreme Court building that was built
with Indian aid. The PM promised to help Bhutan in its
science and technology sector. He noted that India's
satellite technology was a model that could be used by
Bhutan. Besides this, he encouraged a sports meet to
enhance people-to-people contact in the region.
The India-Bhutan hydropower cooperation is a classic
example of successful bilateral cooperation; however,
the two countries face a range of other challenges that
have been straining the ties. The PM’s recent visit did
make a strategic mark because he covered most of the
short and long-term issues that point towards further
development and cooperation between the two States.
However, a vital factor that was left out of the PM’s
agenda was the Siliguri corridor in India. The area is
vital for India as it is the sole link between the Indian
mainland and the Northeast. The Chumbi Valley that
connects Bhutan, India and the China border is of
immense geostrategic importance to the three nations
for trade and commerce.
The Indian delegation should have sought to address
the Siliguri corridor since road and railway connectivity
is a major hindrance that disengages the border states
in this region. A free trade agreement between India,
China, Bhutan, Nepal and Bangladesh is another
promising avenue that was not articulated in the
meeting.
The PM is set to lay the foundation stone of the 600
MW Kholongchu hydropower project, however, his visit
exemplifies that India does not regard Bhutan’s
hydroelectric sector as the prime vantage point for
future India–Bhutan relations. Both India and Bhutan
comprehend that trust and public diplomacy are the
primary leverages that can take the relationship forward.
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