This handout photograph released by India's Ministry of External Affairs on July 5, 2018, shows Indian Foreign Minister Sushma Swaraj meeting with Bhutan's then-prime minister Tshering Tobgay in New Delhi. Photo: AFP / Handout
This handout photograph released by India's Ministry of External Affairs on July 5, 2018, shows Indian Foreign Minister Sushma Swaraj meeting with Bhutan's then-prime minister Tshering Tobgay in New Delhi. Photo: AFP / Handout

It is essential at this time to reanalyze India-Bhutan relations in the backdrop of the Chinese inroads in South Asia. The recently concluded elections in Bhutan point to a wave of change in its domestic politics as the people of the landlocked country have voted a new party into power. How the new party defines and directs foreign policy will be closely watched by both India and China – Bhutan’s neighbors.

It appears that the new government of Druk Nyamrup Tshogpa (DNT) under Dr Lotay Tshering will be looking at ways to overhaul the domestic economy while trying to balance India’s concerns. DNT’s election agenda was focused on economic developments and not on foreign policy. The increase in youth unemployment is a major issue for the new government. In addition to this, the government will have to look for ways to correct the levels of debt Bhutan owes to India.

Bhutan and India share a unique relationship but the latter needs to wake up to the changing reality of its neighborhood. The year 2018 marked 50 years of establishment of the two countries’ diplomatic relations. During Indian External Affairs Minister Sushma Swaraj’s visit to Bhutan to mark the event, the relationship was described as “exemplary ties.”

If India wants to continue its “warm” relations with Bhutan it needs to acknowledge the demands of Bhutan and its people and undertake efforts to fulfill them. In the words of S D Muni, a former diplomat and professor emeritus at Jawaharlal Nehru University, “If they move away from hydropower, the economic content of [the] India-Bhutan relationship will change. They would then want us to get into other areas. If the Chinese develop diplomatic ties with Bhutan, they would be able to help Bhutan diversify much faster.”

The demonetization and goods and services tax (GST) introduced by the government of Indian Prime Minister Narendra Modi hurt the Bhutanese economy. India will have to look for ways to stay true to its economic commitments toward its neighbors. However, the lax attitude of the Indian government toward meeting its promises has been a major catalyst in helping Chinese ambitions.

In recent years China has been undertaking every possible route to woo Thimphu. Bhutan shares diplomatic relations with just about 50 countries and is aware that in the highly globalized economy it will need new friends to help it develop.

Even though New Delhi came to Bhutan’s defense during the 73-day Doklam standoff, there is a growing sense of unease toward India. Some in Bhutan feel that the Indian embrace is becoming stifling and controlling. There has been an increase in discussion among citizens of Bhutan whether it needs new friends (other than India) to meet its development needs. After the Doklam standoff, there has been a rise in opinion in Bhutan supporting the option of normalizing relations with China and also reducing dependency on India.

The inflow of money from China to the other South Asian nations can also be a driving factor. Bhutan is in need of better infrastructure and new industries to garner employment, and China does appear keen on providing both.

China has started working toward improving its ties with Bhutan. This is apparent from the increase in Chinese imports in the form of cement, toys, and technical equipment. The number of Chinese tourists visiting Bhutan has also increased in the last few years. Bhutanese scholars are also arguing that tourism can be an important link in developing ties.

China is keen to open an embassy in Bhutan and also normalize relations. However, the major requirement for that will be settling of their boundary issues. Bhutan and China have concluded around 24 rounds of boundary talks without reaching any consensus. The 25th round of talks was postponed because of the Doklam standoff and is yet to be concluded.

The visit by Chinese Vice-Foreign Minister Kong Xuanyou to Bhutan in July underscored the Chinese push for wooing Bhutan. During the visit, the two sides discussed the boundary issue and worked out dates for the next round of boundary talks in Beijing.

The inflow of Chinese goods to Bhutan has been on the rise and Beijing is extending fellowships to Bhutanese students and also pushing for Bhutan to join the Belt and Road Initiative (BRI). Before the Doklam incident, Chinese media were flush with articles arguing that China and Bhutan are unable to resolve their boundary dispute because of India. China has always argued that it is because of India that Beijing and Thimphu have not managed to have normal bilateral ties.

Even if Bhutan and China want to settle their border dispute, doing so will be highly unlikely without India’s involvement. The disputed tri-junction directly affects the security of India’s northeastern region, and it will be keenly watching the developments.

India and Bhutan have had long-standing historical and cultural relations. Bhutan may lean toward China with the hope of gaining access to funds but it will be no surprise that it will also be extra-cautious, keeping in mind the Sri Lankan and Maldives examples. Bhutan is aware that Chinese friendship comes with strings attached.

India will also need to be practical and cautious in its approach toward China-Bhutan relations. New Delhi needs to adopt new policies keeping in mind the new demands. If India is not proactive now, Beijing may succeed in swaying Bhutan.

Gunjan Singh is a research associate at the Institute of Chinese Studies (ICS), New Delhi.

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