India, Bhutan deepen trade ties

India and Bhutan on Saturday deepened their energy partnership with Prime Minister Narendra Modi inaugurating the 720 megawatts (MW) Mangdechhu hydropower project during a two-day visit, which underlined the National Democratic Alliance (NDA) government’s “neighbourhood first" policy, as well as India’s “special relationship" with the strategically located country.

Modi’s trip is his first to Bhutan since the China-India military face-off in 2017, triggered by an intrusion by Chinese troops into territory claimed by Bhutan. It aims to diversify India’s partnership with the kingdom from cooperation in the hydro-power sector to enhanced trade and linkages in space and education. It comes in the backdrop of efforts by Beijing to woo Thimphu as well as calls within sections of the Bhutanese political establishment for stronger diplomatic ties with China and a shift away from its hydel power ties with India.

Bhutan was the first country Modi visited after taking office in 2014, a reflection of the priority accorded to it by New Delhi. After winning the 2019 elections, Modi invited leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, a South and Southeast Asian economic grouping, for his swearing in on 30 May. Tshering was one of those who attended the event in New Delhi. Modi’s visit comes within three months of his taking office for the second term. Foreign minister S. Jaishankar visited Bhutan on his first trip abroad after assuming office in June, while foreign secretary Vijay Gokhale visited Thimphu earlier this month to pave the way for Modi’s visit. Modi is expected to focus on assistance for Bhutan’s economic development and cooperation in hydropower.

On his arrival at Bhutan’s Paro airport on Saturday, Modi was received by his Bhutanese counterpart Lotay Tshering. Speaking to reporters last week, Indian foreign secretary Vijay Gokhale said India was mindful of the need to broaden ties with Bhutan while retaining its role as a developmental partner. As part of these efforts, India will provide ₹400 crore for a trade support facility to encourage Bhutanese exporters, he said. “This is a special focus and a special package is being given in this five-year plan as trade support for companies and manufacturers to incentivise them to export more to India," he had said. India is providing ₹5,000 crore for Bhutan’s 12th five-year plan that began in 2018, the same as the allocation for the previous plan. Hydro-power, however, will continue to be an important sector of cooperation between the two neighbours with the two sides looking to start discussions on the 2,500 MW Sankosh project, Indian officials said.

On Saturday, the two prime ministers inaugurated ₹7-crore ground earth station built by India’s space agency to allow Bhutan to use a transponder on the South Asian Satellite for broadcast services and disaster management.

“PM @narendramodi and @PMBhutan jointly inaugurate the Ground Earth Station & SATCOM network, developed with assistance from @isro, for utilization of South Asia Satellite in Bhutan. This will bring immense benefit to people living in remote areas of Bhutan," said Indian foreign ministry spokesman Raveesh Kumar in a Twitter post.

Modi and Tshering also inaugurated a project that looks at fostering closer collaboration between institutes of pre-eminence between two countries.

Besides this, India also launched its Rupay card in Bhutan which Modi said would boost tourism in the country.

Later on Saturday Modi met the king of Bhutan Jigme Khesar Namgyel Wangchuk. Modi and the king agreed that bonds between the two countries need to be further strengthened and trust and confidence between the two countries deepened, foreign secretary Gokhale said.

The fundamental area of cooperation is the hydro power sector but both sides needed to deepen the relationship in other areas — education health care science and technology, Gokhale said.

On Sunday, Modi is scheduled to address young Bhutanese students at the Royal University of Bhutan against the backdrop of a fall in the numbers of Bhutanese students in India and an ongoing discussion to link universities in the two countries.