A Framework for Expanded India-Bhutan Partnership
At the invitation of the President of India, Smt. Droupadi Murmu, The King of Bhutan, His Majesty Jigme Khesar Namgyel Wangchuck paid an official visit to India from 03-05 April, 2023. His Majesty was accompanied by H.E. Lyonpo Dr. Tandi Dorji, Minister of Foreign Affairs and External Trade, and senior officials of the Royal Government of Bhutan.
2. During the visit, His Majesty The King of Bhutan met with the President of India Smt. Droupadi Murmu and held talks with the Prime Minister Shri Narendra Modi. The External Affairs Minister Dr. S. Jaishankar and senior officials called on His Majesty The King of Bhutan.
3. India and Bhutan share an exemplary bilateral relationship characterized by trust, goodwill and mutual understanding at all levels, strong bonds of friendship and close people-to-people contacts. During the visit, His Majesty The King of Bhutan and Prime Minister of India held discussions on the entire gamut of bilateral cooperation and on regional and global issues of mutual interest. The two leaders expressed satisfaction on the manner in which India and Bhutan assisted each other in the fight against the COVID pandemic. They agreed to closely work together for progress and development in the region as economies recover from the pandemic.
4. His Majesty The King of Bhutan shared valuable perspective and insights on the significant reforms process underway in Bhutan. His Majesty conveyed appreciation for the invaluable support that the Government of India continues to provide for Bhutan's socio-economic development. He expressed satisfaction on Bhutan's expanding partnership with India, including in the new frontiers of Space, Startups and STEM education.
5. In his interaction with His Majesty The King of Bhutan, Prime Minister reaffirmed India's deep commitment to unique ties of friendship and cooperation with Bhutan and reiterated continued and full support to the socio-economic development in Bhutan based on the priorities of the Royal Government and as per the vision of His Majesty.
6. The meeting between His Majesty The King of Bhutan and the President of India was held in a warm and cordial atmosphere, reflecting the spirit of the exceptionally close and friendly ties between India and Bhutan.
7. His Majesty interacted with Indian business leaders and explored new avenues for expanding economic and commercial ties between India and Bhutan.
8. Guided by the philosophy of Gross National Happiness, and in consonance with the priorities of the people and Royal Government of Bhutan, both sides recognized that the long-standing Bhutan-India development partnership, is reflective of strong ties of friendship and cooperation based on trust and mutual understanding.
9. To take this exemplary development partnership forward, the Indian side agreed to step up support for Bhutan’s 13th Five Year Plan which was welcomed by the Bhutanese side.
10. The Bhutanese side also noted with satisfaction the timely flow of funds from GOI to ensure smooth and uninterrupted progress of projects under the 12th Five Year Plan with about 90 percent of India’s committed plan assistance to Bhutan already released.
11. The Bhutanese side expressed appreciation to the Indian side for extending Standby Credit Facility at reduced interest rate and extended settlement period, and for providing an additional currency swap support of USD 200 Million.
12. The Indian side agreed to positively consider Bhutan's request to extend an additional Standby Credit Facility (SCF) for a period of five years.
13. Hydropower cooperation has been the cornerstone of India-Bhutan bilateral economic partnership. It has been a productive arrangement for both countries whereby Bhutan receives steady stream of revenue from the sale of power from hydropower plants which have been jointly developed and India benefits from the assured supply of energy. The role of hydropower projects in helping the Bhutanese economy during the COVID-19 inducted global economic slowdown was noted in this context.
14. Both sides reviewed various elements of bilateral hydropower cooperation and expressed satisfaction that projects totaling 2136 MW, which have been jointly set up, are functioning well. Both sides also welcomed the recent handing over of 720 MW Mangdechhu HEP to Bhutan.
15. In terms of ongoing projects, both sides reiterated their commitment to find a technically sound and cost-effective way forward for Punatsangchhu-I HEP.
16. Both sides expressed satisfaction with the progress in construction of the 1020 MW Punatshangchhu-II HEP and looked forward to its commissioning by early 2024. Both sides noted that the tariff discussions had been initiated and agreed to expeditiously conclude the tariff protocol for this project.
17. On the periodic revision of tariff of Chhukha HEP, the Bhutanese side welcomed India’s offer to revise the tariff to Rs. 3 per unit, which represents a 17% increase over the earlier tariff.
18. The Bhutanese side thanked India for enabling the import of power from India to meet Bhutan’s energy deficit during the winter months. The Indian side agreed to positively consider Bhutan’s request for sale of power into the Indian Energy Exchange from the 64 MW Basochhu HEP.
19. Both sides reiterated the importance of cooperation in hydropower sector and the urgent need to review and finalize modalities for new projects including Sankosh HEP.
20. The Indian side assured consideration on Bhutan’s request for access to financing and market for power sale for new and upcoming hydropower projects in Bhutan.
21. It was also agreed to extend India-Bhutan energy partnership in the area of non-hydro renewables, such as solar and wind as well as in green initiatives for e-mobility. The Indian side assured necessary technical and financial assistance for projects in these areas.
22. On the proposed trilateral hydropower cooperation among Bhutan, Bangladesh and India, both sides expressed their commitment towards greater sub-regional cooperation, including in the energy sector, which would lead to increased inter-linkages between the economies for mutual benefit of all stakeholders.
23. The two sides welcomed the growing strength of bilateral trade and economic ties.
24. To further expand bilateral cooperation on trade, technology, cross-border connectivity, and mutual investments, following was agreed upon:
i. To work on long-term sustainable arrangements for export of agricultural commodities from Bhutan and import of essential agricultural commodities from India.
ii. To explore long-term bilateral arrangements for assured supply of critical commodities to Bhutan such as petroleum, fertilizers, and coal.
iii. To consider setting up the first Integrated Check Post along India-Bhutan border near Jaigaon and Phuntsholing, which is the busiest trading point between India and Bhutan, through GOI support along with development of mirror facilities on the Bhutanese side.
iv. To take forward the project on the proposed cross border rail link connecting Kokrajhar in Assam to Gelephu in Bhutan through GOI support in consultation with the Bhutanese side based on the engineering and technical survey completed by Indian Railways. This will be a historic project as it will be the first ever rail link between India and Bhutan and will enhance the regional connectivity infrastructure as well.
v. To expedite the operationalization of the Third International Internet Gateway for Bhutan, for which, GOI is extending a concessional rate to reduce the cost of operations of the gateway.
vi. To take forward development of inland waterways connectivity to enhance bilateral and regional trade.
vii. To work towards opening of additional Foreigners Check posts between Bhutan and Assam to facilitate the entry and exit of third country nationals between India and Bhutan by land route.
25. In terms of new areas of partnership which now encompass Startups, Space and STEM education, both sides welcomed the exceptional progress made in the space sector cooperation, including the recent launch of the first satellite jointly developed by India and Bhutan and the inauguration of the satellite’s ground earth station in Thimphu, and agreed:
i. To deepen the partnership in the space technology sector by finalizing a Joint Plan of Action expeditiously; and
ii. To strengthen cooperation on skill development and education, keeping the future of youth at the heart of bilateral cooperation.
26. The visit of His Majesty The King of Bhutan reinforced the longstanding tradition of regular high-level exchanges between the two countries. His Majesty’s visit also provided an opportunity for both countries to review the entire gamut of bilateral cooperation and to advance our close bilateral partnership.
April 05, 2023