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New Aspects of India-Bhutan Relations


The decision made by Prime Minister Narendra Modi of India and Bhutan’s fifth King Jigme Khesar Namgyel Wangchuck to prioritize infrastructure and connectivity during their recent discussions holds significant importance as it marks a step towards more collaborative regional efforts.


  • India and its Neighborhood- Relations.
  • Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.

Mains Question:

India and Bhutan can change the development story of the region. Analyse in the context of recent developments in India-Bhutan relations. (15 marks, 250 words).

Outcomes of the recent discussions:

  • In a joint statement, the leaders discussed the completion of surveys for the Kokrajhar-Gelephu rail link, connecting Bhutan to Assam, and the initiation of talks about another rail link from Bhutan to West Bengal.
  • Additionally, there are plans to facilitate trade between Bhutan and Bangladesh through a new rail link and to enhance border checkpoints along the India-Bhutan border.
  • These plans foreshadow a potential transformation in the region’s development narrative, impacting areas such as West Bengal, the northeastern states of India, Bhutan’s southern and eastern districts (dzongkhags), as well as northern Bangladesh.

Other Aspects of India- Bhutan relations:

  • India’s “energy exchange” initiative, which brings more Bhutanese and Nepali hydropower suppliers into the market and plans to distribute energy to Bangladesh and Sri Lanka, will drive economic growth and revenue within the region.
  • This effort aligns with New Delhi’s attempt to bridge the economic gap with the northeastern states of India and attract development partners such as the World Bank and donor countries like Japan to participate in building a “sub-regional hub.”

Recent Developments in Bhutan:

  • Bhutan’s economy has heavily relied on hydropower and tourism revenues, but it has faced challenges from the COVID-19 pandemic and concerns about global warming. Limited opportunities have driven educated youth and professionals to emigrate.
  • To address these issues, the king has proposed the construction of a Special Economic Zone at Bhutan’s southern border with Assam and the development of an airport in Gelephu, which are expected to stimulate growth and investment in the country.
  • Moreover, the Preferential Trade Agreement signed between Bangladesh and Bhutan in 2020 could boost Bhutanese exports of local products and create more markets for Indian and Bangladeshi producers in the sub-region.

Way Forward:

  • The successful and timely implementation of these ambitious plans is crucial. Given India’s challenges with Pakistan and the sanctions imposed on Myanmar after the 2021 coup, which have disrupted trade and land connectivity to the East, collaborating with neighboring countries to establish connectivity, markets, and energy links is the most sustainable way forward.
  • In the long term, geopolitical conflicts and anti-globalization trends are pushing regional groups to become more united, something South Asia has struggled to achieve thus far.


As India concerns itself with China’s expanding influence in South Asian trade, infrastructure projects, and strategic ties, including worries about a Bhutan-China boundary agreement affecting Doklam and the vulnerability of India’s “Chicken Neck” (Siliguri Corridor) route, these ideas offer greater security and prosperity for the countries involved, particularly benefiting Bhutan, which has traditionally been a trusted partner of India in the region.

December 2023