RECORD AID FOR BHUTAN SEEN AS STRATEGIC MOVE
Modi’s visit in election season despite potential rule violation highlights desire to deepen ties with Thimphu amid rising Chinese clout, analysts say
Indian Prime Minister Narendra Modi’s recently concluded visit to Bhutan where he unveiled a billion-dollar aid package for the South Asian country is seen as a move to counter China’s growing influence in the region.
Modi’s visit from March 22-23 was significant as he had taken a break from hustings ahead of India’s parliamentary elections beginning next month despite potentially violating pre-election rules, political analysts say.
“Given that Bhutan is currently facing economic challenges, India understands its needs and ambitions,” said Aditya Gowdara Shivamurthy, an associate fellow of the strategic studies programme at the Observer Research Foundation (ORF).
The visit underscores India’s eagerness to deepen ties with Bhutan, particularly against the backdrop of Beijing’s rising financial and diplomatic clout.
Questions have been raised about Modi’s visit given the limitations on the incumbent government imposed by the Election Commission. A ruling government in India is deemed an interim administration during the election season until results are announced on June 4.
During the pre-announcement election period, leaders were obliged not to unveil major policy decisions or make official overseas visits, analysts said.
During the visit, Modi pledged aid of 100 billion rupees (HK$9.4 billion) to Bhutan over the next five years, double the amount of the country’s previous five-year plan. Modi’s trip came just a week after Bhutanese Prime Minister Tshering Tobgay held talks in Delhi with top Indian leaders.
A highlight of the Bhutan trip was when King Jigme Khesar Namgyel Wangchuck conferred upon Modi the country’s highest civilian award, the Order of the Druk Gyalpo. Modi is the first foreign national to receive this honour. The Bhutanese royal family also held a dinner for Modi, the first Indian prime minister to be hosted at the palace.
Situated in the eastern Himalayas, landlocked Bhutan holds strategic importance for India since both countries established diplomatic ties in 1968.
Bhutan is arguably the only regional country that remains under Delhi’s orbit of influence while ties with Nepal, the Maldives, and Sri Lanka have cooled under Modi’s tenure.
“Bhutan holds an extremely important position in India’s neighbourhood policy,” said Smruti Pattanaik, a research fellow at the Delhi-based think tank Manohar Parrikar Institute for Defence Studies and Analyses.
“Bhutan receives the largest development fund that India gives. India had funded the first two five-year plans [of its neighbour]. Several infrastructure projects are coming up,” she added.
During the visit, Modi attended the inauguration of a women’s and children’s hospital in the Bhutanese capital Thimphu. He also promised to build an airport and two rail lines in Bhutan to meet its economic and transport needs.
ORF’s Shivamurthy noted the Bhutanese community was expected to benefit from India’s funding through projects such as a green economic zone in the town of Gelephu bordering India’s Assam state that would create jobs and a Gyalsung training programme targeting Bhutanese youths.
Bhutan is the only South Asian country that does not have diplomatic ties with China. But with its sizeable economy, China is wellplaced to provide financial assistance to Bhutan, analysts say.
However, China’s encroachment into Bhutan’s territory will complicate its attempt to foster closer economic ties with the country.
Rajneesh Singh, a security analyst who is a former army officer, noted China had been making claims on Bhutanese territory in the Beyul and the Menchuma Valleys in recent decades, including redrawing its maps and sending Tibetan herders to occupy the areas.
Trade between India and Bhutan surged to US$1.4 billion in 2021-22, or 80 per cent of Bhutan’s total trade, according to data from India’s embassy in Thimphu.
Meanwhile, in a report by the state-run Global Times last December, an analyst claimed that China’s trade with Bhutan had risen to a quarter of the South Asian country’s total trade, without providing any data.