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India Leads Investment in Bhutan, Provides Rs 4500 Cr for 12th Five Year Plan

Bhutan King Jigme Khesar Namgyel's visit to India from April 3 to 5 will deepen the two countries' tight bilateral relationship, including economic and development cooperation. India has historically been Bhutan's top trading partner and is the country's largest source of investment.

Shivam Dwivedi
India Leads Investment in Bhutan, Provides Rs 4500 Cr for 12th Five Year Plan
India Leads Investment in Bhutan, Provides Rs 4500 Cr for 12th Five Year Plan

The Indian government formalized the opening of seven new trade routes for Bhutan's bilateral and transit trade with India in November 2021, new market access was provided for the formal export of 12 Agri-products from Bhutan to India, and various special exceptions/ quotas for export were also provided.

Since the early 1960s, when Bhutan established its Five Year Plans, India has provided economic aid to Bhutan's socioeconomic growth. For the 12th Five Year Plan, India provided Rs 4500 crore to Bhutan for different multi-sectoral project-tied assistance, small development projects, Direct Budgetary Assistance, and so on.

India and Bhutan have special friendship and collaboration connections that are marked by mutual understanding and trust. The core of bilateral economic cooperation is mutually beneficial hydropower collaboration with Bhutan. Hydropower Cooperation provides India with clean energy while also providing Bhutan with a steady stream of revenue that has seen positive growth even during the pandemic. Since the 1980s, Indian aid has installed over 2000 MW of capacity with four mega hydro projects, with two more now under construction.

In accordance with our 'Neighborhood First Policy,' five agri-commodities from Bhutan to India (Areca nut, Mandarin, Apple, Potato, and Ginger) and three commodities from India to Bhutan have gained new market access (Tomato, Onion, and Okra). A tradition of regular high-level visits between the two countries has helped to sustain the special connection. The high-profile trips include Prime Minister Narendra Modi's visit in August 2019 and Foreign Affairs Minister S Jaishankar's visits in 2019 and April 2022. In addition, Foreign Secretary Vinay Kwatra will visit Bhutan in January 2023.

Bhutan's King recently paid a transit visit to India in September 2022, and Bhutan's Prime Minister, Dr Lotay Tshering, visited India in 2018 and 2019. Tandi Dorji, Bhutan's Foreign Minister, visited in 2019, while Pema Choden, Bhutan's Foreign Secretary, visited in August 2022, and so on. Earlier in February 2023, a Bhutanese Legislative Delegation led by Wangchuk Namgyel, Speaker of the National Assembly of Bhutan, paid a visit to President Murmu at Rashtrapati Bhavan.

While welcoming the team, the President stated that India and Bhutan have a varied and unique friendship. The Government of India is committed to extending its great bilateral collaboration with Bhutan in conformity with the people of Bhutan's ambitions and goals. To assist the Royal Government of Bhutan in realizing its vision of prosperity for all, India is expanding bilateral collaboration with Bhutan into new areas such as space cooperation, smart agriculture, youth and sports, start-ups, renewable energy, and digital development.

The President stated that Bhutan will depart from the Least Developed Countries (LDC) group this year and will be on its way to becoming a High Income Economy by 2034. Despite COVID-19-related lockdowns, India provided a continuing supply of trade and critical products to Bhutan in accordance with India-Bhutan unique and special relations. During the pandemic, the country received 13 consignments of medical supplies and was the first to get Covishield Vaccines.

The updated Bilateral Agreement on Trade, Commerce, and Transport between India and Bhutan entered into force in 2017 and will be in effect for ten years. Cooperation in areas other than traditional areas of cooperation, such as new STEM-based initiatives, the establishment of digital infrastructure such as the Third International Internet Gateway, integration of Bhutan's DrukRen with India's National Knowledge Network - key cooperation in the domain of e-Learning, E-library project complementing Bhutan's efforts at digital transformation, e-learning, and so on.

Apart from hydropower collaboration and development, the relationship has expanded into new and emerging fields with the successful completion of the flagship digital project RuPay's full interoperability. Bhutan became the second country to implement India's Bharat Interface for Money (BHIM) app in July 2021, deepening our two countries' financial ties.

The building of a tiny satellite for Bhutan is a new and interesting area of bilateral cooperation and collaboration. The PMs jointly inaugurated the South Asia Satellite (SAS) Ground Earth Station in Thimphu in 2019, which was built with ISRO cooperation. On November 19, 2020, India and Bhutan signed a Memorandum of Understanding on collaboration in the peaceful uses of outer space, and training of domain experts is currently underway. The India-Bhutan SAT was launched into space by ISRO's Polar Satellite Launch Vehicle on November 26, 2022. (PSLV). During the Chairman of ISRO's visit, the Ground Earth Station was inaugurated.

Scholarships, cultural collaboration, and youth-focused projects have also helped to keep people in touch. India is the most popular educational destination for Bhutanese students, with around 4000 Bhutanese students enrolling in Indian universities at any given time, many of whom get government scholarships. The visit would give both parties the opportunity to evaluate the entire scope of bilateral collaboration and to advance the tight bilateral partnership, including economic and development cooperation.

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