India Deepens Ties with Bhutan: Pledges ₹1,500 Crore Economic Stimulus

In a significant move to bolster its relationship with Bhutan, India has pledged ₹1,500 crore as part of an Economic Stimulus Programme over the next 18 months. This announcement came at the end of Foreign Secretary Vikram Misri's visit to Bhutan, where he engaged in wide-ranging discussions with the Himalayan nation's leadership. This commitment underscores the strong bond between the two countries, characterized by trust, goodwill, and mutual understanding.

Misri's visit to Bhutan, his first foreign visit since taking office, included meetings with key figures such as Aum Pema Choden, his Bhutanese counterpart, King Jigme Khesar Namgyel Wangchuck, Prime Minister Dasho Tshering Tobgay, and Minister of Foreign Affairs and External Trade D.N. Dhungyel. These interactions emphasized the depth and breadth of the India-Bhutan partnership, covering various areas including development cooperation, energy, trade and investment, connectivity, technology, and people-to-people ties.

The joint press release issued by both governments highlighted the exemplary nature of the India-Bhutan relationship, noting the satisfaction with the implementation of numerous development projects under the previous 12th Five Year Plan (FYP). Misri and Choden co-chaired the third India-Bhutan Development Cooperation Talks, focusing on the 13th FYP, which continues to prioritize developmental cooperation and mutual interests.

As part of the discussions, the Bhutanese side presented proposals for the Project Tied Assistance (PTA), including the first tranche of projects for the 13th FYP. The two sides approved 61 projects amounting to Nu 49.58 billion (₹4,958 crore), spanning sectors such as connectivity, infrastructure, energy, skill development, education, health, and cultural heritage. Additionally, projects related to capacity building, industrial parks, sports, youth exchanges, digital economy, e-mobility, and space technology were also given the green light.

This economic stimulus is part of a larger framework of support that India provides to Bhutan. Earlier in the year, during Prime Minister Narendra Modi's state visit to Bhutan, he announced India's development support of Nu 100 billion (₹10,000 crore) for Bhutan's 13th FYP. The Bhutanese government expressed deep appreciation for this invaluable support, which continues to drive socio-economic development in the country.

The Economic Stimulus Programme is designed to frontload the full amount of ₹1,500 crore within the first 18 months, subject to the progress of implementation proposals. This initiative is expected to provide a significant boost to Bhutan's economy, helping it recover and grow amidst global challenges.

The joint press release also highlighted the virtual inauguration of 19 schools in Bhutan, constructed during the 12th FYP period. This reflects the tangible outcomes of the development partnership, which has brought about significant improvements in various sectors within Bhutan.

In summary, the ₹1,500 crore economic stimulus pledged by India to Bhutan not only strengthens the bilateral relationship but also underscores India's commitment to supporting Bhutan's developmental aspirations. This move is expected to further cement the ties between the two nations, fostering greater cooperation and mutual prosperity.