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The relationship between India and Bhutan is historic and the new government is committed to make it even stronger. A strong and stable India is needed to make sure that we can help our neighbors with their problems. The stronger India will be, the better it will be for Bhutan and the SAARC nations. If India was to face economic problems then how can it look after its neighbors, he said. Praising the Bhutan royals for protecting people’s rights, Modi said Bhutan has established democracy among its people through awareness and strong democratic traditions. Enthusiasm visible in voters of Bhutan is very important for a vibrant democratic environment. The most important quality for maintaining democracy is self-reliance.
When the world was moving for centralization of power, Bhutan strengthened democracy. In many parts of the world when there is politics of expansionism, democratic principles were strengthened in Bhutan, adding that the smooth transition from monarchy to democracy shows maturity in governance in Bhutan.Bhutan is working hard not only for the present but also for the happiness of further generations. Mutually beneficial economic linkages between India and Bhutan have been an important element in our bilateral relations. India continues to be the largest trade and development partner of Bhutan. Planned development efforts in Bhutan began in the early 1960s.
Hydro-power is one of the main pillars of bilateral cooperation. Three hydro-electric projects (HEPs) totaling 1416 MW, (336 MW Chukha HEP, the 60 MW Kurichu HEP, and the 1020 MW Tala HEP), are already exporting electricity to India. Two identified hydro-power projects of Kuri-Gongri (2640MW) and Sankosh (2560MW), will be implemented under the IG model. Cooperation in the hydro-power sector between our two countries is a true example of mutually beneficial relationship.Power is an important sector of Bhutanese economy.It contributes 12% to the GDP.It is the most important export item contributing 32% (Nu 9.7 billion) of Bhutan’s total exports (Nu 2970 crore). Druk Green Power Corporation, which controls all electricity generation plants of the country, is the highest tax payer of the country.
Trade with India
India is Bhutan’s largest trading partner. A free trade regime exists between India and Bhutan. The India-Bhutan Trade and Commerce Agreement was first signed in 1972. It was last renewed 2006 for a period of 10 years; it comes up for review next in 2016. The Agreement also provides for duty free transit of Bhutanese merchandise for trade with third countries.
Major items of exports from Bhutan to India are electricity, ferro-alloys, carbides, Bar & rods, Copper wire, Dolomite, Gypsum, Agri products (oranges, cardamom, potatoes).Major exports from India to Bhutan are High Speed Diesel, ferrous products, Motor Spirit including aviation spirit (petrol), Copper wire, Rice, Wheat Flour, Wood Charcoal, Hydraulic turbines, machinery items, Coke and semi coke of coal, soyabean oil, milk Powder etc. Several important economic and commercial conferences and trade fairs and exhibitions have been held in Bhutan and in India to further bilateral economic and commercial relations. Bhutan is facing high unemployment Rate and national debt and this could give the necessary opening to China to exert more influence in that country, something which will not leave India in a happy state of mind. Modi’s effort was a sincere one to convey a message to Thimpu that despite India’s growing importance in the world stage, the significance of its immediate neighborhood hasn’t diminished.