PM Modi in Bhutan: Energy, Connectivity on Top Agenda
In Thimphu, PM Modi Calls Bhutan Relationship of Values, of Emotions
During Prime Minister Narendra Modi’s two-day state visit to Bhutan starting November 11, India extended its first-ever concessional line of credit (LoC) of ₹4,000 crore to the Himalayan nation, India’s Ambassador to Bhutan Sandeep Arya announced at a press briefing on Tuesday. Alongside a roadmap for new rail and road links, the two countries committed to advancing their energy partnership—from hydropower to solar, wind, bioenergy, green hydrogen, and energy storage.
By Ayanangsha Maitra
X: @Ayanangsha
A democratic and constitutional monarchy nestled in the Himalayas, Bhutan mirrors India’s stance of staying away from China’s Belt and Road Initiative (BRI). The SAARC member remains the largest recipient of India’s annual foreign aid allocations under the Indian Technical and Economic Cooperation (ITEC) programme and other development schemes. In its 2025–26 budget, India allocated ₹2,150 crore to Bhutan—the highest to any single country—primarily for infrastructure, hydropower projects, and economic cooperation.
Hydropower Cooperation and King’s Birthday Celebrations
PM Modi attended the 70th birthday celebrations of the Fourth King, Jigme Singye Wangchuck, at the Changlimithang Stadium in Thimphu, alongside the current monarch, King Jigme Khesar Namgyel Wangchuck.
India and Bhutan jointly inaugurated the 1,020 MW Punatsangchhu-II Hydroelectric Project, constructed under a bilateral agreement, and agreed to resume work on the main dam structure of the 1,200 MW Punatsangchhu-I project.
Rail Connectivity: A Landmark Step
Connectivity was a key agenda item during the visit. The two countries are moving ahead with plans to establish Bhutan’s first-ever railway links—connecting Samtse to Banarhat (West Bengal) and Gelephu to Kokrajhar (Assam)—at an estimated cost of ₹4,033 crore, fully funded by India. Both sides emphasised the early completion of these projects.
PM Modi said the Kokrajhar–Gelephu and Banarhat–Samtse rail links will mark Bhutan’s first step into railway connectivity, easing trade and travel between the two nations. He also announced the setting up of an Immigration Check Post at Hatisar, Assam, to facilitate the smooth movement of investors and visitors to Gelephu.
Strategic Friendship and Diplomatic Balance
The Himalayan kingdom, home to fewer than one million people, maintains no diplomatic relations with any of the P5 nations of the UN Security Council, including China. Only a handful of countries—such as India and Kuwait—have diplomatic missions in Thimphu.
A time-tested friend of India, Bhutan was the first country to recognise Bangladesh after its 1971 Liberation War. The India–Bhutan Treaty of Friendship binds the two nations to “cooperate closely with each other on issues relating to their national interests.”
Despite not hosting a U.S. embassy, Bhutan attracts a significant number of American tourists and maintains contact with the United States through its Permanent Mission to the United Nations in New York.
During his visit, PM Modi described India–Bhutan ties as “a relationship of values, of emotions, of peace, of progress — a partnership of trust and development.”
Health and Cultural Cooperation
In the health sector, India and Bhutan signed several Memoranda of Understanding (MoUs) covering skill development, joint research, biotechnology, traditional medicine, and pharmaceuticals.
An MoU between NIMHANS (India’s premier mental health institute) and its Bhutanese counterpart focuses on capacity building and joint research in mental health services.
Additionally, PM Modi announced that the Government of India will provide land for a third Buddhist temple in Varanasi, following a request from the Royal Government of Bhutan.
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Tourism, Trade, and Emerging Economic Opportunities
Despite Bhutan lowering the Sustainable Development Fee (SDF) for Indian tourists to ₹1,200, lower-income travellers from India remain hesitant. The upcoming rail connectivity is expected to significantly boost tourism, trade, and cultural exchanges between the two countries.
Bhutan’s fruit-processing industry is closely linked to Indian markets, but a direct supply chain to major Indian cities across the north and south will expand opportunities for both sides. The country also has significant untapped potential in the wood and timber sectors, which are vital for economic growth.
Emerging joint venture opportunities include manufacturing of musical instruments such as pianos, leveraging Bhutan’s rich timber resources. Both countries also see strong potential for cooperation in youth development, sports, and academic exchange—fostering a vibrant, modern partnership built on shared values and mutual respect.
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