India’s Security Concerns and Bhutanese Concerns for Development

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Indian PM Narendra Modi meets with Bhutanese PM Tshering Tobgay

 Dr. Manoj Kumar Mishra, 31 July 2019

Bhutan figures prominently in India’s strategic concerns as was evident from the fact that Prime Minister Narendra Modi chose to visit Bhutan first during his first term in office in 2014. The Indian Prime Minister will visit Bhutan on 17-18 August of this year to underscore the vitality of the bilateral relationship after assuming office for the second term and this time both countries are expected to sign four to five memoranda of understanding and would make some major announcements according to news reports. The Indian side is also expected to focus on assistance for Bhutan’s economic development and cooperation in hydropower. Bhutan’s Prime Minister Lotay Tshering visited India on 30 May, this year, when Prime Minister Modi invited leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) to his swearing-in ceremony.  

The Friendship Treaty of 1949 between India and Bhutan although reflected Indian concerns for security and retained elements of hegemony which stipulated that Bhutan would seek India’s opinions in conducting its foreign relations but the treaty also heralded a new epoch in India-Bhutan relations which mitigated the Bhutanese concerns that the country could emerge as another “princely state” of India. The treaty of 1949 not only guaranteed Bhutan sovereignty to conduct its internal affairs, the Dewathang tract in Assam taken away by the British from the Bhutanese was returned and meager British subsidy was replaced by substantial development assistance from India. However, once Bhutan opened up to other nations and needed more investment, infrastructure and market for development, the country needed more independence to conduct its external relations as well. For instance, the Bhutanese government expresses its willingness seeking a deeper engagement with China in areas of tourism, education, culture, agriculture along with continuing its historical relations with India. Now the challenge for India is how effectively it deals with Bhutan’s craving for independence as well as developmental needs. In this context, to keep the historical relationship sailing, India must contribute to its image as a friendly power rather than a dominating neighbor.   

Historical bonding between India and Bhutan

The historical and special relationship between the countries was underlined on January 24, 2013, when His Majesty the King Jigme Khesar Namgyel Wangchuck quoted His grandfather, His Majesty Jigme Dorji Wangchuck and his father His Majesty Jigme Singye Wangchuck at a banquet hosted in his honor by the President of India:

“The destiny of Bhutan is intimately bound with that of India and it is in our mutual interests to further the bonds of friendship and understanding.” And, many decades later, in a modernizing Bhutan, my father declared, “India is the cornerstone of our foreign policy”. To these profound assertions of intimate bonds, I would like to state, “Indo-Bhutan friendship is indispensable for the future success of Bhutan.”

The historical bonding between India and Bhutan is underlined by the fact Bhutan is the only South Asian country which is not part of the Chinese ‘Belt and Road Initiatives’ (BRI) considered to be vital to keep Indian sensitivities to Chinese strategic ambitions in the neighborhood at bay. Another example of close India-Bhutan strategic ties is the small Himalayan country’s refusal to the Chinese offer of a much larger portion of disputed territory in the north where Bhutan has higher economic stakes, in exchange for the relatively smaller plateau with limited domestic interests- Doklam plateau underlining the Bhutanese sensitivities to India’s security stake in the plateau. Underlining the special relations that India and Bhutan enjoyed, experts like P. Stobdan argue that unlike Nepal, Bhutan has never played the China card against India.

Whereas Bhutan’s cozy relations with India and its location mitigated New Delhi’s concerns as to the way to deal with militants in the North-East and hence played a significant role in maintaining internal stability, India, on its part, established the Indian Military Training Team to train Bhutanese forces. The number of soldiers trained by India kept steadily rising. Both countries set up India-Bhutan Joint Group on Border Management and Security and India also expressed its willingness to extend regular logistic support to the Bhutanese forces.

The Indian government contributed a significant sum of its budget toward aiding Bhutan’s technical and economic development projects such as the hydro-electric power projects. The India-Bhutan Trade and Transit Agreement of 1972 not only boosted trade relations between the two countries, it turned India into Bhutan’s largest trading partner. The agreement facilitated Bhutan as duty free transit point of India’s exports to third countries. Culturally, Buddhism provides the glue that binds the two countries in terms of sharing similar worldviews and maintaining people-to-people contacts. Guru Padmasambhava – a Buddhist saint traversed from India to Bhutan and helped spread Buddhism bringing people of both countries into close cultural association. Historically, people-to-people contacts and Drukpa sect of Tibetan Buddhism characterized close relations between Bhutan and Ladakh – which was earlier Kingdom of Ladakh until 1846 but since then part of India’s Jammu and Kashmir province. The historical bonding is further exemplified by Bhutanese sincerity in opening a consulate in India’s north-eastern city of Guwahati marking the completion of 50 years and the two countries launching a special logo in New Delhi to celebrate their enduring partnership.  

Hitches in bilateral ties

With the revision of 1949 India-Bhutan Friendship Treaty in 2007, Bhutan has not only diversified its diplomatic relations with many countries, New Delhi’s concerns stemmed from slackening of its control over Bhutan’s foreign policy that propelled it to guard cautiously against any Bhutanese move to court China. Indian concerns as regards Chinese influence have prevented Bhutan from allowing a diplomatic presence to China. However, the earlier Prime Minister Jigme Y Thinley’s suspicious move to court China and discuss with the Chinese counterpart on issues allegedly pertaining to formal diplomatic presence and a land-swapping deal involving the strategically located areas in the tri-junction of India-Bhutan and China led India to withdraw subsidies on kerosene and cooking gas as a measure to pile up pressure on Bhutan to force it to change its stance which was subsequently withdrawn and the succeeding Prime Minister Tobgay Tshering maintained close relations with the Indian leadership by putting a pause on diplomatic overtures. However, many experts argue that the territorial confrontation at the Doklam junction has raised Bhutan’s security concerns and many Bhutanese elites as well as many from the public, believe they should settle their border with China rather than be drawn into India-China territorial conflict.

While it argued that the Indian Army’s Eastern Command and the Indian Air Force’s Eastern Command has been instrumental in protecting Bhutan from external threats posed by the Chinese military and to substantiate this how the Indian army stood firm against the Chinese design to build a road at Bhutan’s Doklam plateau in 2017 is provided as a recent example, however, this would be simplistic explanations of India-Bhutan relations. Bhutan occasionally expressed its desire to assert independence in foreign policy making even while the friendship treaty of 1949 with India stipulated New Delhi would guide Thimphu in its external relations. There are instances when Bhutan due to its geographical location between India and China – two large countries required stressing its independence despite the historical bonding with India. Bhutan’s desire for independence was palpable not only when the then Bhutanese king declined to provide base to Indian troops during the Sino-India war in 1962, it was felt in certain quarters within Bhutan that India continued to discourage the small South Asian country from opening diplomatic relations with other countries especially China.  Nevertheless, India supported the country in becoming a member of the Colombo Plan in 1962 and the Universal Postal Union in 1969. However, following securing a UN membership in 1971, Bhutan while maintained special diplomatic relations with India, it was keen to establish diplomatic ties with other nations independent of India’s advice at the same time. In 1979, Jigme Singye Wangchuk, the then Bhutanese king stated that India’s advice on foreign relations was not binding on Bhutan. Of late, Bangladesh, Bhutan India, Nepal (BBIN) sub-regional initiative which was activated following India’s failure to push through the Motor Vehicles Agreement (MVA) in the SAARC Summit held in Kathmandu proved a temporary failure with Bhutan’s withdrawal from the agreement on the ground of environmental concerns.

On 8 February 2007, the Friendship Treaty of 1949 was revised and signed in New Delhi. Article 2 and 6 of the treaty were amended providing Bhutan autonomy to pursue its foreign policy and purchase non-lethal military equipment as long as such decisions did not damage India’s vital strategic interests. This reflected India’s willy-nilly recognition of the Bhutanese desire for autonomy in maintaining foreign relations. The Bhutanese desire to maintain independence and willingness to pursue relations with various national and international actors to forge trade and investment ties were evident in the statement of King Namgyel Wangchuck following the signing of the Treaty when he said: “From a guiding role upon Bhutan’s first step to modernization, we now stand as a close friend and equal partners in the global arena”.  

India would be perceived based on its contribution to Bhutan’s Development

Geopolitics in the Himalayan country suggests that while India would try to preserve its influence and prevent it from drifting towards China as happened during Thinley’s regime, China would try to swing the change away from India’s orbit. Meanwhile, Bhutan would make adept attempts at maintaining a fine balance to preserve its independence in the midst of two big powers. For New Delhi, the task would be to create enough trust and mutual stakes so that the country would not be swayed by Chinese overtures.

Rising national debt in the shape of Indian loans in the hydropower sector would remain as one of the prominent concerns for the current leadership apart from trade imbalance in favor of India. India’s export of a lion share of essential goods in cheaper rates to Bhutan adversely impacted the domestic sectors within the country. It was argued by some experts that India as a much greater neighboring power took advantage of Bhutan’s landlocked location in designing bilateral trade and commerce largely in its favor. Statistics point to the slanted relations – whereas 60 per cent of Bhutan’s expenditure is on imports from India, 90-95 per cent of what Bhutan borrows from India finds its way back to India.

The significance of hydropower to the Bhutanese economy is underlined by the fact that two hydropower stations at Chhuka (1800 MW) and Tala (1400 MW), provide 40 per cent of Bhutan’s government revenue and accounts for a quarter of its GDP. These hydropower projects are financed by India. However, the hydropower projects have been marked by delays in constructing and commissioning in Bhutan by Indian companies, the returns from the collaboration in the hydropower projects have not been satisfactory according to Indian estimates leading to enhanced interest rates and surge in Bhutan’s debts, further these projects have not been viewed favorably by many Bhutanese for their failure to generate adequate employment opportunities and for its damaging impact on the environment. The paradox that Bhutan encountered is while power was generated and made available to people by the government at a much affordable price, significantly lesser number of households (only 66% of Bhutanese households and 39% of its villages) remained electrified indicating that hydropower projects can contribute to Bhutan’s development if India extends its support in infrastructural development which could supply the hydropower resources to people and give them employment as well. The Indian government under Modi’s leadership has been blamed by some commentators for replacing the financing formula which was earlier 60% grant and 40% loans by 30% grant and 70% loans contributing to Bhutanese national debts and interest rates on loans have also been raised.

Concerns have also been expressed as to the Indian government’s plans to convert these government-owned projects in addition to other new projects into joint ventures with Indian companies having major shares. These measures could dilute the original purpose of the hydropower projects in contributing to the development of the Himalayan country. India must not evaluate its assistance to the process of Bhutan’s development in terms of profit. Sustenance of the historical relations between the two countries would depend how India’s power-surplus status and its search for renewable energies like wind and solar power would contribute to Bhutan’s development whereas treating the collaboration in the hydropower sector as burdensome would not be helpful. On the contrary,
India’s offer of aid and trade benefits would only strengthen the perception that it is not the historic relations rather growing Chinese regional influence that led India to offer these benefits.  Further, India must mitigate the Bhutanese concerns pertaining to increasing debts and trade imbalance. India’s assistance to Bhutan must be viewed from the perspective of enabling the small South Asian country in the areas of military, politics as well as economy. India needs to strengthen the Bhutanese private sector and help in building their capacities. In the cultural sphere, compared to China which is capitalizing on Buddhism more effectively in the Himalayan region, India is perceived lukewarm in leveraging its deep religion-cultural links with Bhutan.