India losing grip of Bhutan? China on the edge

It was not much of a surprise when India’s newly appointed External Minister S. Jaishankar chose Bhutan for his maiden bilateral visit, reflecting once again, India’s ever-growing desperation for continued friendship with its neighbour. Similarly orchestrated visits for cooperation, have been common from the Modi government where Bhutan became Modi’s first foreign visit under his “Neighbourhood First Policy” in his previous tenure. Does this necessarily mean that India-Bhutan relations stand as the glorious example of ‘love thy neighbour’? Or does the Indian government simply consider Bhutan a package deal for both economic and strategic dominance in the region?

India and Bhutan celebrated 50 years of diplomatic ties in 2018, refreshing people’s memory about their maturing relationship. Empirically, India has proven to be a great partner for the likes of Bhutan. With Beijing’s assertive claims over the territory of Bhutan, Nepal, and Sikkim from 1910 and further the spread of Chinese suzerainty over Tibet, Bhutan sought to seek partnership and support from British India; subsequently independent India. In 1949, Bhutan, out of desperation, signed the Treaty Of Perpetual Peace and Friendship with India, which provided India an ‘apparent’ advisory role in Bhutan’s foreign relations in exchange of military support against China. As Bhutan welcomed India’s assistance in the military and economic spectrums, it was only inevitable that the greater power would try to dominate the beautiful country, sandwiched between two powerhouses – India and China.

So what’s actually gone wrong? With this booming ‘special relationship’ between the two countries, hydropower became a major area of economic cooperation between the two countries. With the signing of a new treaty in 2007, superseding the one in 1949, strides were made towards the evolving friendship between India and a more sovereign Bhutan by eradicating the advisory role of India and recognizing Bhutan as an essential ally. As Hydro-power is the centrepiece of Bhutan’s economic prosperity, accounting for its 14% GDP, economic relations between India and Bhutan were based on harvesting Bhutan’s potential to generate hydropower for trade and personal usage. India has been an incredible asset for Bhutan by providing a market for three-fourths of Bhutan’s hydropower while at the same time investing in Bhutan to develop it’s export capacity to India from 5000 MW to 10,000 MW by the year 2020. Although the older Bhutanese generations looked to India with gratitude for their assistance as a friend, the newer generation tends to capture the depth of the situation. They recognize India’s involvement in the hydropower sector as exploitative and are concerned about India’s grip on their economic and foreign policy affairs.

“Not only are the terms on which India is financing the hydropower projects unfavourable to Bhutan but also, it is getting electricity from Bhutan at cheap rates,” a Bhutanese official pointed out in anger towards the Indian administration. Further, India has extorted the humility of Bhutan to dominate the foreign relations of the country to an extent that Bhutan, till date, does not engage in diplomatic talks with China. Bhutanese population considers this as a  direct threat to the sovereign character of the country and also a major hindrance to the border settlement between Bhutan and China. India’s strategic interest in the Doklam Plateau to avoid military vulnerability to China has discouraged Thimphu to recognize the border talks and has even escalated the situation between India and China. With a 72 day standoff in the Doklam Plateau over illegal construction by the Chinese troops, both armies reflected how diplomacy had failed in its part and military retaliation was now an alternate approach to the situation. Bhutan was walking on eggshells during the crisis and was seen balancing the two powers, but felt greatly disturbed and suffocated by the dominant pedestrian of India in their friendship.

How is the situation evolving? As Beijing is seeking to mend relations with Bhutan, through the means of soft power diplomacy and promise of a better future, India seems to lose the battle. Tourism stands to be the second greatest economic contributor to Bhutan’s GDP and China has resorted to utilizing the tourist trends as economic leverage. With a significant increase in Chinese tourist waves in Bhutan over the past decade from less than 20 visits in 1996 to 9,220 visits in 2016, the fastest growing industry witnessed a major drop in tourists after the Doklam standoff. This came as a warning to Bhutan about their vulnerability and left them concerned about their progress under India’s umbrella. Further, the current Bhutanese government faces major challenges with respect to rising unemployment and rising foreign debt to India. As the government, seeks to remove the centrality of hydropower from the economic sphere of the country, Chinese investment has caught the attention of the youth and private sector for a better future but India still stands as the major hurdle. In 2012, India’s wrath was unleashed by the act of withdrawing fuel subsidies when Then-Bhutan Prime Minister Jigme Thinley met with his Chinese counterpart, Wen Jiabao, on the side-lines of the Rio+20 Summit. India’s might was deeply resented in Bhutan, as possessiveness and domination took over the respect and trust in the friendship.

There is a growing interest in Bhutan for diplomatic relations with China as the issue has now become a part of the public debate and the government is facing large scale pressure from the private sector to establish economic relations with China. Bhutan would like to benefit from the Chinese ties in the region as well but the pressure from India seems significantly choking for the country today and sovereignty seems like an idea foregone with this friendship.

Kashish Kumar
Kashish Kumar
Kashish Kumar is a student of Social Work at the Australian Catholic University and a graduate of Masters in International Relations from the Australian National University. His interest lies in the Asia-Pacific region and mainly the Indo-Pacific affairs.