On January 10, Bhutan elected the People’s Democratic Party (PDP) to victory in its National Assembly. These were significant polls. Economic recovery, more than foreign policy, was the key electoral issue during the campaign. The outgoing Druk Nyamrup Tshogpa (DNT) party, which had increased the frequency of boundary talks with China, failed to qualify for the final round, and the final contest was between the PDP and the Bhutan Tendrel Party (BTP).
Of course, foreign policy did matter in the election debates. All the four main parties underlined the importance of cooperation with India, especially in the hydropower sector and trade ties. The fourth party, Druk Phuensum Tshogpa (DPT), specifically referred to India in its manifesto, stressing the need for closer ties with New Delhi.
The elections were fought against the backdrop of the recently concluded 25th round of boundary talks with China, during which the two countries agreed to push forward with implementing all the steps of the Three-Step Roadmap.
Bhutan has traditionally had to balance relations with both its large neighbours. Relations with China became tense when China annexed Tibet and the Dalai Lama fled Tibet in 1959 to India. Bhutan closed its border to China, and China claimed and occupied Bhutanese border territories. The country has since sought to establish ties with China. In 1983, Bhutanese Foreign Minister Dawa Tshering held talks with Chinese Foreign Minister Wu Xueqian in New York to establish bilateral relations. The boundary discussion began in 1984 and has continued to be held since then.[1] In 1998, at the 12th boundary meeting, the two countries signed a bilateral agreement on their border disputes in which China reaffirmed its respect for Bhutan’s sovereignty and territorial integrity. The two sides also proposed the Five Principles of Peaceful Coexistence. However, by the 2000s China began asserting itself once again along the border and claimed land in the disputed area in the north.
Pressure mounted on Bhutan as Tibet became the focus of China’s connectivity projects in the 2000s. Railways to Lhasa (2006) and to Shigatse (2014) flattened the plateau, leading to a massive economic and infrastructure build-up. The launch of the ‘Xiokang’ or well-off village model in 2006[2] added to this. In 2012, Bhutan’s first democratically-elected Prime Minister, Jigme Thinley reached out to China, and met Premier Wen Jiabao on the sidelines of the UN Sustainable Development summit in Rio de Janeiro, Brazil.
Bhutan and India, on the other hand, share a unique bilateral relationship, characterized by utmost trust, goodwill, and mutual understanding. The bilateral is based on the Treaty of Friendship and Cooperation signed in 1949 between the two countries and revised in February 2007. Both countries celebrated the Golden Jubilee of the establishment of formal diplomatic relations in 2018, and the bilateral has been sustained by regular high-level visits and dialogues.
The government of India has consistently supported the socio-economic development of Bhutan. Hydro-power cooperation between the two countries is an important example. To date, India has constructed four major hydropower projects of 2,136 MW in Bhutan, and two more of 2,200 MW are under construction. Prime Minister Lotay Tshering secured an aid package of about 4,500 crores ($54 million) for Bhutan’s 12th five-year plan in his first visit to India in November 2018.[3]
At the same time, Bhutan’s relations with China have also intensified. The 2017 Doklam standoff was a turning point in Bhutan-China boundary talks, following which the Chinese Vice-Foreign Minister paid a visit to Thimphu in July 2018.[4] The DNT, which came to power in 2018, did so with an agenda of enhancing Bhutan’s diplomatic outreach. Beijing instead broadened its territorial claims in 2020, this time in the east by showing Bhutan’s Sakteng Wildlife Sanctuary as its own.
Although the then-Prime Minister Lotay Tshering was quick to dismiss the media report of China’s claim[5], the following year, the government sped up the negotiation process with China by signing a Memorandum of Understanding on the “Three-Step Roadmap” for expediting the boundary negotiation through video platform. The details of the roadmap were not made public. Curiously, even the frequency of “Expert Group” meetings was increased. Three meetings held in 2023 culminated in the 25th Round of Talks in October 2023 that produced a MoU on the “Responsibilities and Functions of the Joint Technical Team (JTT) on the Delimitation and Demarcation of the Boundary.”
No concrete result is visible for now, though the optics is high. Bhutanese Foreign Minister Tandi Dorji’s reception in Beijing by a Political Bureau member of the CPC Central Committee was dubbed as a diplomatic milestone and a historical landmark for the Bhutan-China bilateral. Netizens paid their gratitude to the King and thanked India for not scuttling the process. They see a new trilateral relationship evolving, with Bhutan playing the bridge role.
On the face of it, it amounted to DNT proving its foreign policy credentials in the run-up to the 2023-24 national elections, this time with the hope to win another term. Thimphu may have also drawn a possible scenario of a change of guard in New Delhi, for it is also aware that a Congress-led government would make things harder to normalize ties with Beijing as it did in 2013 when it withdrew fuel subsidies to Bhutan leading to strained India-Bhutan ties.
One intrinsic aspect, the Bhutanese threat perceptions vis-à-vis China, are not the same as that of India’s. For Bhutan, the issue at stake is not the territory, but the fear of herders from the north swamping its remote hinterlands.[6] Therefore, in the absence of a defined boundary, the Bhutanese stand to lose more land to China. In 1996, China proposed a “package” deal: it would swap 495 sq. km. in Pasamlung and Jakarlung area in the north in exchange for Bhutan conceding 269 sq. km. in the west at the Doklam trijunction (which has direct security implications for India). Bhutan spurned the offer then. However, economic pressure from China has increased significantly since then. Its use of myriad sub-threshold warfare tactics such as cultural and demographic influence have also mounted the pressure and threatened Bhutan’s security and the security of India’s own Himalayan belt.
So far, Bhutan has restrained itself from moving further with the border issue, mainly due to its sensitivity to India’s security concerns, which essentially views China’s threat from a conventional warfare-centric topographic lens to restrict PLA’s access to the mountainous Himalayan trijunction. It is this limited and linear thinking in India, which may have allowed China to escalate its influence operations to alter the Himalayan defense lines in its favor.
The possible opening of a Chinese embassy in Thimphu will cause a dilemma, if not actual discomfort, to New Delhi, for the Chinese tend to focus more on creating a favorable operational environment rather than achieving any immediate goals.
As for the future, and whether Bhutan will go ahead with détente with China, the answer would be yes, but not without making several amendments. The possibility of a new PDP government changing the course of border talks with China remains unlikely but the pace of negotiation might slow down. The possibility of Beijing dragging out the talks until Bhutan concedes to China’s 1996 “package proposal,” also remains high.
With India, meanwhile, much of the future agenda for bilateral relations had been set during the visit of Bhutan King Jigme Khesar Namgyel Wangchuk in November 2023.
Better India-Bhutan connectivity is finally finding precedence. Bhutan is set to create the first-ever rail connection between Bhutan’s Gelephu with Assam’s Kokrajhar.[7] The railway project is bound to reshape the regional landscape by fostering greater connectivity, trade, and economic cooperation. The project aims to boost the Bhutanese economy and address the unemployment issue that was the major agenda of the election campaign.
The key direction for the future is Bhutan’s desire to attract investments from India to develop infrastructure and industry. During the same visit, His Majesty Jigme Khesar Namgyel Wangchuck visited Mumbai and interacted with Indian business leaders to explore new avenues for expanding economic and commercial ties between India and Bhutan.
India has agreed to extend a Standby Credit Facility at a reduced interest rate and extended settlement period, and to provide an additional currency swap support of $200 million to Bhutan that will benefit the incoming government in Thimphu.
Hydropower cooperation is likely to remain the cornerstone of the India-Bhutan bilateral economic partnership. It helps Bhutan earn steady revenue from the sale of power. India has recently handed over 720 MW Mangdechhu hydroelectric power project (HEP) to Druk Green Power Corp in Bhutan in December 2022. Several of the other ongoing projects such as Punatsangchhu-I HEP, and Punatshangchhu-II HEP, will be commissioned in the coming years.
To further expand bilateral cooperation on trade, technology, cross-border connectivity, and mutual investments, the two sides have agreed to
I. work on long-term sustainable arrangements for the export of agricultural commodities from Bhutan and import of essential agricultural commodities from India, and
II. explore long-term bilateral arrangements for the assured supply of critical commodities to Bhutan such as petroleum, fertilizers, and coal.
Significantly, the two countries considered setting up the first Integrated Check Post along the India-Bhutan border near Jaigaon and Phuntsholing, the busiest trading point between India and Bhutan.
Technology is a focus, in operations and training. Both have agreed to expedite the operationalization of the Third International Internet Gateway for Bhutan, for which the government of India is extending a concessional rate to lower the operating costs. The additional areas of partnership include cooperation in the new frontiers of space, startups, and STEM education. The results are already visible in 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.
The newly-elected Tobgay government, too, will seek to build on this momentum. During his last term from 2013 to 2018, Tshering Tobgay secured Rs.45 billion for Bhutan’s 11th Five-Year Plan. An additional Rs. 5 billion was also earmarked as part of India’s “Economic stimulus package” for Bhutan’s slowing economy. No doubt, the Tobgay government will seek more funds from India under the 13th Five Year Plan to ensure the smooth and uninterrupted progress of projects under the 12th Five Year Plan, with about 90% of India’s committed plan assistance to Bhutan already released. Bhutan’s relations with India will be pursued in a guided manner.
Ambassador Phunchok Stobdan was India’s former ambassador to Kyrgyzstan.
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References
[1] China and Bhutan’s border dispute points are mainly in the north near the sacred Gang-khar Puensum Mountains. Disputes in the west are in the Chumbi Valley near the Doklam plateau, considered to be economically important for the people of Bhutan’s Haa Valley. So far, 45 years of boundary negotiation, 25 rounds of talks, and 13 Expert Group meetings have failed to demarcate the 477 km. long common border.
[2] Jayadev Ranade, ‘China’s Xiaokang (well-off) Border Defence Villages in the Tibet Autonomous Region,’ Vivekananda International Foundation, 24 September 2019, https://www.vifindia.org/article/2019/september/24/china-s-xiaokang-border-defence-villages-in-the-tibet-autonomous-region
[3] ‘India-Bhutan relations,’ Embassy of India, Thimpu, https://www.indembthimphu.gov.in/pages/NTU
[4] Much of the groundwork on the boundary may have begun even earlier when the two countries agreed to conduct a Joint Technical Field Survey of Borders in 2010. The survey report of the northern border was placed before the 2013 meeting in Wutai Shan (in Inner Mongolia), and the survey of the western sector was completed in 2016. The 2017 Doklam stand-off, in a way, reflected the ground position but fell short of a demarcation line. Bhutan though accused China of unilaterally changing the status quo.
[5] Bhutan’s envoy in New Delhi at the time also speedily denied the reports of China building its ‘Pangda’ village inside Bhutan in 2020.
[6] Historically, Bhutan as a nation came into existence in 1616 after fighting several wars against the political hegemony, not of China but of Tibet in the north. Even after the People’s Republic of China (PRC) took control of Tibet in the 1950s, pressure and coercion from the north continued, as did frequent incursions by Tibetan herdsmen. Over 6,000 Tibetan migrants – which grew to 10,000 by 1987 – faced accusations of interfering in Bhutan’s internal affairs, including palace intrigue. Many were quickly deported to India in the late 1970s for their lack of allegiance. The frequent People’s Liberation Army (PLA) and Tibetan herders’ intrusions throughout the 1960s to early 1980s forced Bhutan to shun all contact with its northern neighbor and instead opened its door to India.
[7] King Jigme Khesar Namgyel Wangchuck highlighted this groundbreaking railway project in his National Day address on 17 December 2023 and discussed it with Indian Prime Minister Narendra Modi during his visit to Delhi a month earlier in November.