State Visit of Prime Minister of India to Bhutan

Posted 23 Mar 2024

2 min read

Key highlights of visit
- Prime Minister of India became the first foreign government leader to receive Bhutan’s highest civilian award, ‘Order of the Druk Gyalpo’.
- India will provide Rs.10,000 crore as financial support to Bhutan over next five years to bolster cooperation in areas like energy, space etc.
- Establishing two rail links including Kokrajhar-Gelephu and Banarhat-Samtse to improve connectivity.
- Both sides look forward to commissioning of 1020 MW Punatsangchhu-II hydropower project in 2024.

Challenges in India-Bhutan Relationship
- Issues in Hydropower trade, i.e. not able to fairly negotiate power tariff.
- Bhutan acting as Hideout for militants in North-East.
- Increased financial burden on Bhutan as India moved away from 60:40 model (60% grant, 40% loan) to 30:70 model.
- Delay in completion of projects by India e.g. Punatsangchhu II.

Implications of increasing China’s role in Bhutan for India
- Bhutan-China negotiated Dhoklam border deal will have Security implications for India, due to its close proximity to Siliguri Corridor.
- Improved relationship with China can impose threat to India’s Economic and Energy trade relationship with Bhutan.
- Close ties with China can impact traditional pro-India foreign policy of Bhutan.

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