Do China-Bhutan Relations play a significant role in India’s foreign policy? The Chinese ambassador Luo Zhaohui visited Thimphu to promote diplomatic relations between China and Bhutan. Bhutan’s new government thinks that Beijing is a potential partner capable of transforming Bhutan’s economy.
Mr Luo will be accompanied by a cultural delegation from China which will perform on the occasion of the Chinese Spring Festival.
Bhutan’s newly elected government under PM Lotay Tshering of the Druk Nyamrup Tshogpa (DNT) party wants to reduce the mountainous country’s excessive reliance on hydropower which it exports to India. In its election manifesto, the DNT had stated the fact that India’s share of trade with Bhutan accounted for 80% of Bhutan’s total trade.
The DNT manifesto said: “We acknowledge the central role of hydropower sector in our economy, however, since it is a climate sensitive sector and considering possible geo-climatic hazards in future, it would be unwise to hinge the country’s economy solely on a single sector.”
In order to explore trading opportunities, China’s vice foreign minister Kong Xuanyou along with Mr. Luo visited Thimphu. Mr kong discussed the boundary issue with Bhutan leaders. He also invited Bhutan to actively participate in the Belt and Road Initiative (BRI) and share China’s “development dividend”. Bhutan is the only Indian neighbour to have resisted the temptation so far to join BRI.
During Tshering’s visit to India last month, his first overseas as PM, his counterpart Narendra Modi had announced that India will provide grant assistance of Rs 4500 crore for Bhutan’s 12th Five Year Plan, and a transitional Trade Support Facility of Rs 400 Crore over a period of five years to strengthen bilateral trade and economic linkages. Tshering had also invited Modi to Bhutan, but the Indian PM is yet to undertake that visit.
India though has to observe how China’s engagement with Bhutan work in the territorial and boundary domain. India’s own ties with China have improved exceptionally since the 2017 Doklam dispute with Luo himself declaring that Sino-Indian ties are currently passing through one of the best phases in history.
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