History

• Diplomatic relations between India and Bhutan were established in 1968 with the establishment of a Special Office of India in Thimphu.
• The basic framework of India- Bhutan bilateral relations has been the Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was revised in February 2007.

Developmental cooperation

• India has also committed towards Transitional Trade Support Facility Tariff Adjustment of Mangdechhu Hydroelectric Power Project.
• The scope of Project tied Assistance projects range from agriculture to irrigation, ICT, health, education, scholarships, labour and human resource development, roads, energy, urban development, judiciary, culture, constitutional offices

Hydro-power cooperation

• Till date the Government of India has constructed four major hydro-electric projects (HEPs) in Bhutan totaling 2136 MW, Chukha HEP, Kurichhu HEP, Tala HEP and the recently commissioned Mangdechhu HEP.
• The 720 MW Mangdechhu Hydroelectric Power Project was handed over by the Mangdechhu Hydroelectric Project Authority to the Royal Government of Bhutan has played a key role in increasing Bhutan’s Hydropower revenue.

Cooperation in New and Emerging Areas

• The Ground Earth Station of the South Asia Satellite (SAS) was inaugurated at Thimphu by both the prime ministers of both the countries
• The two sides collaborated on the India-Bhutan SAT, the first satellite jointly developed by India and Bhutan, was launched from ISRO’s Satish Dhawan Space Centre at Sriharikota. It will provide high resolution images of Earth and, thereby, help Bhutan in natural resources management.
• The RuPay Card was launched in Bhutan in two phases – Phase I was launched in 2019, to enable acceptance of payments in Bhutan using RuPay cards issued by Indian bank.
• In 2021, India’s Bharat Interface for Money (BHIM) application was launched in Bhutan with the objective of promoting cashless payments between the two nations.
• The integration of Bhutan’s DrukRen with India’s National Knowledge Network is a key cooperation in the domain of e-Learning. This integration creates an information highway between the universities, research institutions, libraries, health-care and agricultural institutions of the two nations

Commerce and Trade

• India has consistently been Bhutan’s top trading partner – both as an import source and as an export destination
• India remains the leading source of investments in Bhutan, comprising 50% of the country’s total FDI.
• On November 2022, the Reserve Bank of India (RBI) signed an agreement with the Royal Monetary Authority of Bhutan (RMA) for providing an additional currency swap support to the RMA of up to USD 200 million equivalent in INR (approximately INR 1657 crore).

Cultural and Buddhist links

• A number of Bhutanese pilgrims undertake travels to Bodh Gaya, Rajgir, Nalanda, Sikkim, Udayagiri, and other Buddhist sites in India.

Indian Diaspora in Bhutan

• About 50,000 Indians are presently working in Bhutan in the sectors of Infrastructure Development, Education, Trade and Commerce, Arts, Health and Information Technology, signifying close people to people ties between India and Bhutan.
• In January 2023, Sanjeev Mehta, Professor of Economics at the Royal Thimphu College, Thimphu was awarded the Pravasi Bhartiya Samman Award in recognition of his outstanding achievements in the field of education and three decades of service in Bhutan.

Assistance during the Covid-19 Pandemic

• Bhutan was the first country to receive the Made in India Covishield vaccines under Ministry of External Affairs Vaccine Maitri Initiative.
• A total of 550,000 doses of Covishield were given to Bhutan as a gift.
• The Government of India has delivered total 12 medical consignments to Bhutan containing essential medicines.