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Prime Minister Narendra Modi’s two-day visit to Bhutan over the last weekend  has had the tiny Himalayan kingdom promised a launch into the digital world and global connectivity along with a renewed power purchase agreement that would boost its economy.

Through ten memoranda of understanding (MOUs) signed during the visit, India laid out details of projects in several areas from LPG to space technology to mark efforts to take India-Bhutan relationship beyond hydro-power.

Increasing clean fuel supply, launch of Rupay card, foreign currency swap arrangement and enhancing cooperation in science and education sectors were among the major assistance announced that are aimed to widen the ambit of relationship were detailed at a joint press meet Modi held with his counterpart Lotay Tshering.

Fuel is crucial for Bhutan. India has promised to increase the supply of LPG from 700 Metric Tonnes (MT) to 1000 Metric Tonnes (MT) per month in order to meet the requirement of the ordinary citizens.

Modi underlined the importance of continued cooperation in the hydro-power sector with the joint inauguration of Rs 5,012-crore Mangdechhu hydro-power project.

He also inaugurated Rs 7-crore ground station built by India’s space agency to allow Bhutan to use South Asian Satellite for communication, public broadcast and disaster management.

India, he assured the Bhutanese, was committed to Bhutan’s growth in space technology and will also make available extra bandwidth and transponder for its use. Both the countries will cooperate for creating small satellite and use of space technology.

He also announced linking Bhutanese students and researchers to Indian universities. Royal University of Bhutan and IITs will cooperate under this programme and five Post Graduate scholarships for Bhutanese students will be provided by the Nalanda University in Bihar for five-years.

In more financial cooperation, Modi said India was positive about increasing the currency swap limit for Bhutan under the SAARC Currency Swap Framework. “An additional $100 M will be made available to meet Bhutan’s foreign currency requirement in the interim.”

India’s assistance to Bhutan through the five-year-plans will continue, PM said adding that the “focus and priorities” for the five-year- plans will be determined by Bhutanese people’s “desire.

Stating that it was a ‘privilege’ to have Bhutan as a friend, Modi said “who would not want to have Bhutan as a friend?”

Bhutan, it must be stressed, was Modi’s first foreign destination when he took office in 2014 as part of his “neighbourhood first” policy. On his re-election this year, his new External Affairs Minister S. Jaishankar began with his first foreign visit to Bhutan. The duo is happily, but belatedly, tackling the China factor in relations with Bhutan.

All the right words were said during the meeting with King Jigme Khesar Wangchuck to reinforce an ancient relationship. But it needs to be stressed that the visit did not come a day too soon. India is in furious competition to woo the tiny Himalayan kingdom and needs to fend off China’s deep overtures helped by deep pockets that have engulfed South Asia and beyond.

Bhutan’s unique quest for increasing its gross domestic happiness (GDH) is now being increasingly tampered by quest for modernity and material happiness as well, especially among its young. They see India’s dominant presence as dampening their aspirations and find the Chinese overtures too attractive to ignore.

There is a growing interest in Bhutan for diplomatic relations with China. The issue has now become a part of the public debate and the government is facing pressures from the private sector to establish economic relations with China. Bhutan would like to benefit from the growing Chinese ties in the region as well.

New Delhi’s dilemma is that Bhutan is crucial to both, India’s security and ties with China. Just two years ago, India jumped to Bhutan’s defence when Chinese troops started building a road in Doklam plateau, a territory claimed by both China and Bhutan. The tense eyeball-to-eyeball confrontation lasted 72 days before the Indian and Chinese armies pulled back. It strained India’s relations with China till Modi later met President Xi Jinping at Wuhan.

By-passing and competing with India as it does in nations across the Indian Ocean region, China is constantly seeking to mend relations and extend a hand of friendship to Bhutan  as well — with money to offer in the other hand, despite the two having no diplomatic relations.

Chinese shipments have shot up in the past decade, with goods from machinery and cement to electrical appliances and toys making Beijing the third largest source of foreign products to heavily import-dependent Bhutan Chinese products and tourists have been arriving in ever greater numbers in Bhutan over the past decade.

India’s ties with Bhutan have always been good, but the older generation that looked to India with gratitude is passing. The young look to China as an alternative. The current Bhutanese government faces major challenges with respect to rising unemployment and rising foreign debt to India.

Bhutan generates power with India’s help and investment and sells it to India, earning 14 percent of its GDP. But now there are murmurs that the terms are heavily in India’s favour. If the agreement signed last Saturday assuages Bhutanese complaints is not clear.

To put it bluntly, Bhutan could at some time in future go the Nepal way and seek to keep equi-distance between Beijing and New Delhi. If upset by any overture to China by any of them, India could in the past lean on these landlocked neighbours choking their supplies. The new geopolitical situation, getting firmed with each passing day, is such that India can no longer do so. It needs to be sensitive to aspirations of smaller neighbours who have discovered, with rying success though, an alternative in China.

 Modi told the Royal Bhutan University students that India had gone “beyond traditional avenues” explore new frontiers with Bhutan like space technology, judicial reforms and disaster management.” However, India’s past record at implementing MOUs is a mixed bag. It is to be hoped that given the urgency of staying ahead of China (that is faster in investing and implementing what it commits); the MOUs will see action on the ground, to be implemented diligently and on time. (Ends)   By Mahendra Ved

Prime Minister Narendra Modi’s two-day visit to Bhutan over the last weekend  has had the tiny Himalayan kingdom promised a launch into the digital world and global connectivity along with a renewed power purchase agreement that would boost its economy.

Through ten memoranda of understanding (MOUs) signed during the visit, India laid out details of projects in several areas from LPG to space technology to mark efforts to take India-Bhutan relationship beyond hydro-power.

Increasing clean fuel supply, launch of Rupay card, foreign currency swap arrangement and enhancing cooperation in science and education sectors were among the major assistance announced that are aimed to widen the ambit of relationship were detailed at a joint press meet Modi held with his counterpart Lotay Tshering.

Fuel is crucial for Bhutan. India has promised to increase the supply of LPG from 700 Metric Tonnes (MT) to 1000 Metric Tonnes (MT) per month in order to meet the requirement of the ordinary citizens.

Modi underlined the importance of continued cooperation in the hydro-power sector with the joint inauguration of Rs 5,012-crore Mangdechhu hydro-power project.

He also inaugurated Rs 7-crore ground station built by India’s space agency to allow Bhutan to use South Asian Satellite for communication, public broadcast and disaster management.

India, he assured the Bhutanese, was committed to Bhutan’s growth in space technology and will also make available extra bandwidth and transponder for its use. Both the countries will cooperate for creating small satellite and use of space technology.

He also announced linking Bhutanese students and researchers to Indian universities. Royal University of Bhutan and IITs will cooperate under this programme and five Post Graduate scholarships for Bhutanese students will be provided by the Nalanda University in Bihar for five-years.

In more financial cooperation, Modi said India was positive about increasing the currency swap limit for Bhutan under the SAARC Currency Swap Framework. “An additional $100 M will be made available to meet Bhutan’s foreign currency requirement in the interim.”

India’s assistance to Bhutan through the five-year-plans will continue, PM said adding that the “focus and priorities” for the five-year- plans will be determined by Bhutanese people’s “desire.

Stating that it was a ‘privilege’ to have Bhutan as a friend, Modi said “who would not want to have Bhutan as a friend?”

Bhutan, it must be stressed, was Modi’s first foreign destination when he took office in 2014 as part of his “neighbourhood first” policy. On his re-election this year, his new External Affairs Minister S. Jaishankar began with his first foreign visit to Bhutan. The duo is happily, but belatedly, tackling the China factor in relations with Bhutan.

All the right words were said during the meeting with King Jigme Khesar Wangchuck to reinforce an ancient relationship. But it needs to be stressed that the visit did not come a day too soon. India is in furious competition to woo the tiny Himalayan kingdom and needs to fend off China’s deep overtures helped by deep pockets that have engulfed South Asia and beyond.

Bhutan’s unique quest for increasing its gross domestic happiness (GDH) is now being increasingly tampered by quest for modernity and material happiness as well, especially among its young. They see India’s dominant presence as dampening their aspirations and find the Chinese overtures too attractive to ignore.

There is a growing interest in Bhutan for diplomatic relations with China. The issue has now become a part of the public debate and the government is facing pressures from the private sector to establish economic relations with China. Bhutan would like to benefit from the growing Chinese ties in the region as well.

New Delhi’s dilemma is that Bhutan is crucial to both, India’s security and ties with China. Just two years ago, India jumped to Bhutan’s defence when Chinese troops started building a road in Doklam plateau, a territory claimed by both China and Bhutan. The tense eyeball-to-eyeball confrontation lasted 72 days before the Indian and Chinese armies pulled back. It strained India’s relations with China till Modi later met President Xi Jinping at Wuhan.

By-passing and competing with India as it does in nations across the Indian Ocean region, China is constantly seeking to mend relations and extend a hand of friendship to Bhutan  as well — with money to offer in the other hand, despite the two having no diplomatic relations.

Chinese shipments have shot up in the past decade, with goods from machinery and cement to electrical appliances and toys making Beijing the third largest source of foreign products to heavily import-dependent Bhutan Chinese products and tourists have been arriving in ever greater numbers in Bhutan over the past decade.

India’s ties with Bhutan have always been good, but the older generation that looked to India with gratitude is passing. The young look to China as an alternative. The current Bhutanese government faces major challenges with respect to rising unemployment and rising foreign debt to India.

Bhutan generates power with India’s help and investment and sells it to India, earning 14 percent of its GDP. But now there are murmurs that the terms are heavily in India’s favour. If the agreement signed last Saturday assuages Bhutanese complaints is not clear.

To put it bluntly, Bhutan could at some time in future go the Nepal way and seek to keep equi-distance between Beijing and New Delhi. If upset by any overture to China by any of them, India could in the past lean on these landlocked neighbours choking their supplies. The new geopolitical situation, getting firmed with each passing day, is such that India can no longer do so. It needs to be sensitive to aspirations of smaller neighbours who have discovered, with rying success though, an alternative in China.

 Modi told the Royal Bhutan University students that India had gone “beyond traditional avenues” explore new frontiers with Bhutan like space technology, judicial reforms and disaster management.” However, India’s past record at implementing MOUs is a mixed bag. It is to be hoped that given the urgency of staying ahead of China (that is faster in investing and implementing what it commits); the MOUs will see action on the ground, to be implemented diligently and on time.

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