India's Bilateral Relationships: Bhutan

• During British India :

Bhutan became a protectorate of British India after signing a treaty in 1910 allowing the British to "guide" its foreign affairs and defence.

• What is a Pretectorate?

A protectorate, in international law, is an autonomous territory that is protected diplomatically or militarily against third parties by a stronger state or entity. In exchange for this, the protectorate usually accepts specified obligations, which may vary greatly, depending on the real nature of their relationship. However, it retains sufficient measure of sovereignty and remains a state under international law.

• Indo Bhutan Border:

India shares a 605 kilometres (376 miles) border with Bhutan and is its largest trading partner, accounting for 98 percent of its exports and 90 percent of its imports

• Treaty of Friendship 1949:

Treaty of Friendship and Cooperation between India and Bhutan was signed on August 8, 1949. This treaty governs the basic framework of bilateral relations between the two countries. The Treaty provides for, among other things, perpetual peace and friendship, free trade and commerce and equal justice to each other's citizens. The treaty also established free trade and extradition protocols.
The counterparts of this treaty were Government of India and His Highness the Druk Gyalpo's Government in Bhutan. India was represented by Sri Harishwar Dayal and His Highness the Druk Gyalpo's Government in Bhutan by Deb Zimpon Sonam Tobgye Dorji, Yang-Lop Sonam, Chho-Zim Thondup, Rin-Zim Tandin and Ha Drung Jigmie Palden Dorji. The full text of this treaty is here.

• Renegotiation of the Treaty

February 8, 2007, became a historic moment as Bhutan and India embarked on a new epoch of friendship and economic cooperation by revising the India-Bhutan Friendship Treaty 1949. India renegotiated the 1949 treaty with Bhutan and signed a new treaty of friendship in 2007. The treaty was signed by His Majesty Jigme Khesar at New Delhi.

The new treaty replaced the provision requiring Bhutan to take India's guidance on foreign policy with broader sovereignty and not require Bhutan to obtain India's permission over arms imports.

• In 2008, Indian Prime Minister Dr. Manmohan Singh visited Bhutan and expressed strong support for Bhutan's move towards democracy.
• India allows 16 entry and exit points for Bhutanese trade with other countries with exception only being the PRC, and has agreed to import a minimum of 5,000 megawatts of electricity from Bhutan by 2020.

Trade Relationships:
India is the largest trade partner of Bhutan. During 2005, imports from India were of the order of Rs.12.80 billion (Rs. 3.62 billion in 1998) and constituted 75.1% of Bhutan’s total imports . Bhutan’s exports to India in 2005 inclusive of electricity amounted to Rs. 9.97 billion (Rs. 4.17 billion in 1998) and constituted 87.5% of its total exports. Bilateral trade registered an increase of 26.85 per cent as compared to the year 2004.

• Latest Trade Data: During the April December Quarter of 2009

1. India's exports to Bhutan were : Rs. 36,198.21 Lakh ($ 80.92 Million)
2. India's Imports from Bhutan were : Rs. 53,276.20 Lakh ($ 119.10 Million)

The above data comes from : Ministry of Commerce & Industry databank

• What does India Exports to Bhutan?

Machinery and mechanical appliances, Mineral products, Base metal and base metal products, cereals, fruits, nuts, coffee, prepared food stuffs, transport equipment, chemical products, animal products, vegetable oil, plastic and rubber products, textiles, wood and wood products have been traditionally India's main exports to Bhutan. Besides high speed diesel oil , polyester motor spirit (including aviation spirit), mineral products, base metals, machinery and mechanical appliances and transport vehicles formed major part. Indian vehicles dominate the automobile market and have captured more than 80% of the market in Bhutan.

• What India Imports from Bhutan?

Besides electricity, calcium carbide, gypsum, ferro-silicon, particle board and Portland cement are the main imports from Bhutan.

• Project DANTAK:

Project DANTAK of the Border Roads Organization was raised in May, 1961. It is headquartered at Simtokha, near Thimphu under a Chief Engineer. Project DANTAK has constructed, under GOI funding, over 1500 km of roads through very difficult mountainous terrain in Bhutan.

Under funding from Government of India , Project Dantak has built all the major highways such as the East-West highway (548 km) and Thimphu-Phuentsholing highway (181 km), airfields at Paro and Yangphula and airport terminal at Paro, a number of helipads, the Indo-Bhutan microwave link, Bhutan Broadcasting Station, India House Complex, Chukha Hydroelectric Housing Complex, Power sub-stations, river training works, and several important buildings (including SAARC Convention Centre).

Project DANTAK is also constructing infrastructure works for the Tala Hydro-electric project, besides maintaining some important highways such as Eastern and Western highways and other roads.

Project Dantak would be taking up Pasakha-Manitar road, double laning of Thimphu-Phuentsholing road, Gyelpozhing-Nanglam road, Extension/Resurfacing of runway at Paro airfield under GOI funding in the 9th plan of Bhutan.

• Geological Survey of India:

GSI initiated exploration of Bhutan's mineral resources in 1960. It prepared the first geo-scientific database of Bhutan, which was presented to the World Scientific Community at the 22nd International Geological Congress held in New Delhi in 1964. This database helped in identifying several cement-grade limestone, dolomite, coal and gypsum deposits in Bhutan.

GSI Bhutan Unit has its headquarters at Samtse and it has made a major contribution to the development of cement industry in Bhutan. GSI Bhutan Unit has wound up operations in Bhutan from March 2003.

• Central water Commission:

Central Water Commission (CWC) of India started its Bhutan Investigation Division in Phuentsholing in 1961 for investigation of Hydro Power Schemes. The CWC has been closely associated with the investigation of Chukha Hydroelectric Project on river Wangchu. Its activities have expanded, over the years, to meet the demands of mutually beneficial cooperation between India and Bhutan.

• India's Amassador to Bhutan :

Writer-diplomat Pavan K Varma was in February 2009 appointed India’s next Ambassador to Bhutan, succeeding Sudhir Vyas. Varma.

• Government of India's assiatance to Bhutan:

Serious developmental efforts in Bhutan began in early 1960s when India started extending financial assistance. Out of the 10 Five year plans of Bhutan, (10th is going on) , the first two of which were totally financed by India.

• Projects taken in Bhutan's 8th Plan:

Indian contribution to Bhutan’s 8th Five Year Plan (1997-2002) is Rs 10500 million, comprising Rs 4000 million as development subsidy and Rs 6500 million as project-tied assistance.

1. Pasakha-Manitar By-pass Road
2. Punakha Dzong Renovation
3. Rehabilitation of Educational Infrastructure
4. Eastern Grid Transmission line : Project to evacuate the power generated by the Kurichu Hydroelectric Project
5. JDWNR Hospital - a 350-bed hospital (Jigme Dorji Wangchuck Hospital ) at Thimpu
6. Regional Referral Hospital at Mongar
7. Punakha Dzong (Cultural Project)

• Projects in 9th Five year plan of Bhutan:

The estimated cost of the project taken up during the 9th Plan is about Rs./Nu. 7338 million.

1. Expansion & upgradation of JDWNR Hospital
2. Malaria Control programme
3. Expansion/upgradation of Mongar Hospital
4. Gyelposhing-Ngalam Rd (25km + 3 bridges)
5. Pasakha Manitar Road
6. Chuzom - Paro Highway( Double laning)
7. Babesa- Phuentsholing Highway(Double laning)

Complete list of India's projects in Bhutan is here:

• India's Projects in 10th Plan and Current Status:

Government officials from Bhutan met with the delegates from India led by Joint secretary (North) of India, Satish C Metha, on October 31, 2009 to hold the Bhutan-India Development Cooperation Talks to review the GoI’s assistance to Bhutan’s 10th Plan. The Indian government’s response to the requests and proposals from Bhutan government regarding the implementation of the 10th five-year plan is positive.

1. Bhutan put up proposals in the areas of fund releases, energy, roads, total solutions projects and small development projects. A few issues under the Project Tied Assistance that required immediate attention were discussed during the meeting.
2. Of the total of Nu 2951.875 million requested during the financial periods 2008-09 and 2009-10, Bhutan received only Nu 1322.203 million till date.
3. To achieve a target production of 10,000 MW of electricity by 2020, an Empowered Joint Group (EJG) was formed between the two governments to accelerate the process.
4. Bunakha reservoir, Wangchu reservoir, Amochu reservoir and Kuri Gongri projects were identified to replace the earlier projects of Rotpashong and Chamkharchhu for inclusion under the 10,000MW scheme.
5. The preparation of the Detailed Project Report (DPR) for the projects needs to be included under the PTA. The government also requested on the inclusion of the access roads of Semtokha- Wangdue Highway improvement and Tingtibu- Praling road construction for the achievement of 10000 MW. These roads were important for access to hydropower projects approved by the EJG.
6. Besides the royal government, for easy transportation of heavy machineries and equipments through the Gelephu- Wangdue Highway to Punatshangchu project site, requested the GoI to improve the bad conditioned Santhalbari-Gelephu road which is the access point to the highway.
7. Bhutan has initiated the Total Solutions Projects with the NIIT of India with a view to turn Bhutan into a knowledge bases society.
8. On the earthquake recovery front, Bhutan Government requested the Indian government to support and assist in the earthquake recovery for the reconstruction works will have a serious impact on the 10th plan without the assistance of the developing partners.
9. An agreement on the outcome of the meeting was also signed in October 2009.
10. The GoI is Bhutan’s largest development partner with a total commitment of Nu 34 billion in the 10th plan outlay.

Sources of Info: wikipedia, Indian Embassy in Bhutan, Bhutan Observer, Bhutan 2008, Press Information Bureau, Ministry of commerce Government of India, Image comes via Bhutan2008.bt