Home Contact Us  

Peace & Conflict Database - Articles

Print Bookmark Email Facebook Subscribe
#5306, 21 June 2017

Three Years of the Modi Government

India-Bhutan: Furthering Common Interests
VP Haran
Former Indian Ambassador to Bhutan

Bhutan, like other neighbours, watched with interest and some anxiety as National Democratic Alliance (NDA) swept the polls in May 2014. Indian Prime Minister (PM) Narendra Modi was an enigma to them. They were unsure of what the Modi government's foreign policy would be. Bhutan was no exception. The invitation to South Asian leaders for the swearing in ceremony was a reassuring message from the new government that it attaches the highest priority to strengthening relations with neighbours. Bhutanese PM Tshering Tobgay's visit to Delhi and his meeting with PM Modi reassured him about the continuity of India’s policy towards Bhutan.

To give practical effect to the ‘neighborhood first’ policy, Modi chose Bhutan for his first foreign visit as prime minister, less than a month after taking office. On the eve of the visit, PM Modi said he was looking forward to his "first ever visit to Bhutan and to nurturing and further strengthening India’s special relations with Bhutan. The visit, arranged at very short notice, went off smoothly and achieved the objective. PM Modi laid the foundation stone for the 600 MW Kholongchu HEP; announced that India would set up a national level digital library in Bhutan; and that there would be no embargo on export of essential items like rice, wheat, milk powder etc to Bhutan. By the time visit was over, Bhutan was confident that India’s policy towards Bhutan would continue. Subsequent developments have proved this assessment right. Meaningful progress has been achieved in the ongoing development projects, security cooperation and in the decisions announced during the visit.

Cooperation on mutual security concerns has been progressing satisfactorily in the interest of both the countries. Law enforcement agencies on both sides of the border have stepped up sharing of intelligence to keep a tab on terrorist and other anti-social activities along the border. Infrastructure for the promised National Digital Library of Bhutan has been put in place and steps are underway to make the library operational soon. India-assisted development cooperation projects are proceeding well and Bhutan should be able to meet the targets for the 11th Plan which ends by June 2018. Continuing high-level exchanges with Bhutan, Indian President Pranab Mukherjee paid a successful visit to Bhutan in November 2014.

Bhutan has shown keen interest in opening a consulate in Guwahati. Recalling the historical ties of cooperation and friendship, Bhutan's PM Tshering Tobgay said in the inaugural ceremony of Namami Brahmaputra festival in Assam in April 2017 that he has asked the Indian government to allow opening of Bhutan's consulate in Guwahati. People on both sides of the border have had close contacts for several centuries and have economic and cultural exchanges on a daily basis, taking advantage of the open border. India has decided to accept Bhutan’s proposal to open the consulate. This would be welcome news to Bhutan.

Hydro power is the most important area of India-Bhutan bilateral economic cooperation. During his visit, PM Modi said hydropower cooperation with Bhutan "is a classic example of win-win cooperation and a model for the entire region." Three India assisted HEPs – Chukha, Kurichu and Tala – with a total capacity of 1416 MW are presently operational. They account for 13 per cent of Bhutan’s GDP and a third of its exports and have contributed immensely to Bhutan's development. India buys all the surplus power from these projects. At Bhutan’s request, in 2008, the then Indian PM Manmohan Singh during his visit to Bhutan agreed to India working with Bhutan to set up additional 10,000 MW of generating capacity by 2020. This commitment was reiterated during PM Modi’s visit. This target of 2020 was unrealistic even when conceived, as injection of massive funds for these projects would have overheated the Bhutanese economy. Implementation would need to be stretched out and this is understood by both sides.

Presently, four projects are under execution. Of these, the 720 MW Mangdechu is expected to be commissioned on schedule in 2018. The 1200 MW Punatsangchu 1 and 1020 MW Punatsangchu 2 have fallen way behind schedule, due mainly to geological surprises encountered during construction. Commencement of work on the Kholongchu project, for which PM Modi laid the foundation stone, has got delayed and needs to be sped up. Unlike earlier projects that are inter-governmental, Kholongchu and three other projects are to be executed as joint ventures (JVs) between Bhutan and Indian public sector undertakings (PSUs). Progress on the other three could build on the model developed for Kholongchu. The national transmission grid being implemented with Indian assistance is progressing well.

Bhutan does not favour entry of private companies in the energy sector. Reports on privatisation of Indian PSUs is causing some anxiety in the context of PSU involvement in JVs, as Bhutan does not want to end up having to deal with private companies a few years later. Reassurance regarding PSUs involved in JVs would help clear the air. Progress is necessary on the other projects identified as part of the 10,000 MW programme, even if implementation is taken up later. 

Tariff for power supplied by Bhutan is considered low by some Bhutanese who see reports in Indian media about the high cost of power generated in India and the cost at which India exports power to Bangladesh and Nepal. Tariff is fixed as per a mutually agreed formula based on cost of generation, agreed rate of return, increase in tariff in adjoining region of India, etc. Policymakers in Bhutan recognise the importance of an assured market at an agreed tariff and would not like to leave power trade to the vagaries of market fluctuations.

Bangladesh has also shown interest in setting up a major HEP in Bhutan, with the aim of importing power generated from the project. This will be possible only if power is allowed to be transmitted through India. India has responded positively to the proposal, making both Bhutan and Bangladesh happy.

India has announced draft guidelines for cross-border trade in electricity. Since it involves trade in power with India's neighbours, it would be useful to consult them. Regulations should facilitate trade on commercial lines and provide for transmission of power across India by Bangladesh, Bhutan and Nepal, its BBIN Initiative partners. This would be in accordance with India's desire for greater economic integration with its neighbours.

Focus is required on some long pending bilateral issues/projects like problems faced by Indian traders, the integrated check post at the Jaigaon/Phuentshoeling border, indiscriminate and unscientific mining of Dolomite in Bhutan causing serious problems in northern West Bengal, etc.

In overall terms, India and Bhutan have worked together closely over the past three years to further their common interests. "Bhutan and India share a very special relationship that has stood the test of time," PM Modi said in Bhutan. The positive developments since his visit testify to his statement.

Print Bookmark Email Facebook Subscribe
IPCS Columnists
Af-Pak Diary
D Suba Chandran
Resetting Kabul-Islamabad Relations: Three Key Issues
Can Pakistan Reset its Relations with Afghanistan?
The New Afghanistan: Four Major Challenges for President Ghani
Big Picture
Prof Varun Sahni
Understanding Democracy and Diversity in J&K
When Xi Met Modi: Juxtaposing China and India
Pakistan?s Tactical Nuclear Weapons: The Inevitability of Instability

Dateline Colombo

Asanga Abeyagoonasekera.
Sri Lanka: Moving Towards a Higher Collective Outcome
The Importance of Electing the Best to our Nation's Parliament
Sri Lanka: Toward a Diaspora Re-Engagement Plan
Dateline Islamabad
Salma Malik
Pakistan's Hurt Locker: What Next?
IPCS Forecast: Pakistan in 2015
India-Pakistan Relations in 2015: Through a Looking Glass
Dhaka Discourse
Prof Delwar Hossain
IPCS Forecast: Bangladesh in 2015
18th SAARC Summit: A Perspective from Bangladesh
Bangladesh in Global Forums: Diplomacy vs. Domestic Politics
Eagle Eye
Prof Chintamani Mahapatra
India-US: Significance of the Second Modi-Obama Meet
Has President Obama Turned Lame Duck?
Modi-Obama Summit: Criticism for Criticism?s Sake?

East Asia Compass
Dr Sandip Mishra
India-Japan-US Trilateral: India?s Policy for the Indo-Pacific
China-South Korea Ties: Implications for the US Pivot to Asia
Many ?Pivots to Asia?: What Does It Mean For Regional Stability?
Himalayan Frontier
Pramod Jaiswal
Nepal?s New Constitution: Instrument towards Peace or Catalyst to Conflict?
IPCS Forecast: Nepal in 2015
Constitution-making: Will Nepal Miss its Second Deadline?

Prof Shankari Sundararaman
IPCS Forecast: Southeast Asia in 2015
Indonesia's Pacific Identity: What Jakarta Must Do in West Papua
Modi in Myanmar: From ?Look East? to ?Act East?
Sushant Sareen
IPCS Forecast: Pakistan in 2015
Islamic State: Prospects in Pakistan
Pakistan: The Futility of Internationalising Kashmir

Looking East
Wasbir Hussain
Myanmar in New Delhi's Naga Riddle
China: ?Peaceful? Display of Military Might
Naga Peace Accord: Need to Reserve Euphoria
Maritime Matters
Vijay Sakhuja
Indian Ocean: Modi on a Maritime Pilgrimage
Indian Ocean: Exploring Maritime Domain Awareness
IPCS Forecast: The Indian Ocean in 2015

Nuke Street
Amb Sheelkant Sharma
US-Russia and Global Nuclear Security: Under a Frosty Spell?
India's Nuclear Capable Cruise Missile: The Nirbhay Test
India-Australia Nuclear Agreement: Bespeaking of a New Age
Red Affairs
Bibhu Prasad
Countering Left Wing Extremism: Failures within Successes
Return of the Native: CPI-Maoist in Kerala
The Rising Civilian Costs of the State-Vs-Extremists Conflict

Regional Economy
Amita Batra
India and the APEC
IPCS Forecast: South Asian Regional Integration
South Asia: Rupee Regionalisation and Intra-regional Trade Enhancement
South Asian Dialectic
PR Chari
Resuming the Indo-Pak Dialogue: Evolving a New Focus
Defence Management in India: An Agenda for Parrikar
Pakistani Taliban and Al Qaeda in Afghanistan: Implications for Asian Security

Spotlight West Asia
Amb Ranjit Gupta
Prime Minister Modi Finally Begins His Interaction with West Asia*
A Potential Indian Role in West Asia?
US-GCC Summit: More Hype than Substance
Strategic Space
Manpreet Sethi
India-Russia Nuclear Vision Statement: See that it Delivers
Global Nuclear Disarmament: The Humanitarian Consequences Route
Nasr: Dangers of Pakistan's Short Range Ballistic Missile

The Strategist
Vice Admiral Vijay Shankar
Jihadi Aggression and Nuclear Deterrence
The Blight of Ambiguity
Falun Gong: The Fear Within

OTHER REGULAR contributors
Gurmeet Kanwal
Harun ur Rashid
N Manoharan
Wasbir Hussain
Rana Banerji
N Manoharan

Ruhee Neog
Teshu Singh
Aparupa Bhattacherjee
Roomana Hukil
Aparupa Bhattacherjee


Browse by Publications

Issue Briefs 
Special Reports 
Research Papers 
Seminar Reports 
Conference Reports 

Browse by Region/Countries

East Asia 
South Asia 
Southeast Asia 
US & South Asia 

Browse by Issues

India & the world  
Naxalite Violence 
Suicide Terrorism 
Peace & Conflict Database 
Article by same Author
Understanding the Tri-Junction Question

A Brief History

Withdrawing the MFN Status to Pakistan: Legality and Implications

India-Syria Linkages: Yesterday and Today

Y! MyWeb
Print Bookmark Email Facebook Subscribe
Year 2018
 January  February
 2017  2016  2015  2014  2013  2012  2011  2010
 2009  2008  2007  2006  2005  2004  2003  2002
 2001  2000  1999  1998  1997

The Institute of Peace and Conflict Studies (IPCS) is the premier South Asian think tank which conducts independent research on and provides an in depth analysis of conventional and non-conventional issues related to national and South Asian security including nuclear issues, disarmament, non-proliferation, weapons of mass destruction, the war on terrorism, counter terrorism , strategies security sector reforms, and armed conflict and peace processes in the region.

For those in South Asia and elsewhere, the IPCS website provides a comprehensive analysis of the happenings within India with a special focus on Jammu and Kashmir and Naxalite Violence. Our research promotes greater understanding of India's foreign policy especially India-China relations, India's relations with SAARC countries and South East Asia.

Through close interaction with leading strategic thinkers, former members of the Indian Administrative Service, the Foreign Service and the three wings of the Armed Forces - the Indian Army, Indian Navy, and Indian Air Force, - the academic community as well as the media, the IPCS has contributed considerably to the strategic discourse in India.

Subscribe to Newswire | Site Map
18, Link Road, Jungpura Extension, New Delhi 110014, INDIA.

Tel: 91-11-4100-1902    Email: officemail@ipcs.org

© Copyright 2018, Institute of Peace and Conflict Studies.