A Meeting of Interests

Emerging regional dynamics require India to transform its relations with Bhutan

Mahendra P. LamaMahendra P. Lama

India-Bhutan relations have steadily moved from dependence to domain of interdependence. This firmly established newer relations matrix is rooted in four traditional matrices of sharing of natural resources, common cultural heritage, pilgrimage and connectivity linkages. Another four non-traditional variables are collective security platform, liberal economic assistance, newer trade contents and institution building.

These matrices have strong inbuilt elements of confidence and trust, remarkable trajectory of consistency and accommodation; deeper appreciation of sovereignty and identity and proven sensitivity related to clarity in future direction. The consultative and institutional mechanism, informal recognition of each other’s diverse national interest and acceptance of Bhutanese reassertion on certain national domain by India (like ‘no go’ signal to implementation of BBIN Motor Vehicles Agreement of 2015 by the ‘Tshogdu’ Bhutanese National Assembly) have facilitated this gradual entry into interdependence domain. It is largely because of these matrices of interdependence that Bhutan stood by India and vice versa in most trying and complex bilateral, regional and global circumstances. The most recent example is that of the deft and peaceful handling of the Doklam crisis in 2017.

The India-Bhutan Treaty of Perpetual Peace and Friendship of 1949 has been the corner stone of relationship in the post-Independence period. This Treaty stipulated that India would have a role in guiding Bhutan’s foreign policy. Article II of this Treaty stated that ‘The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part, the Government of Bhutan agrees to be guided by the advice of the Government of India in its external relations.’

Significant amendments have been made to the 1949 Treaty which was replaced by a new Indian-Bhutan Friendship Treaty signed in 2007. Article 2 of this new Treaty states that ‘in keeping with the abiding ties of close friendship and cooperation between Bhutan and India, the Government of the Kingdom of Bhutan and the Government of the Republic of India shall cooperate closely with each other on issues relating to their national interests. Neither Government shall allow the use of its territory for activities harmful to the national security and interest of the other.’

Similarly, key provisions on free trade and commerce (Article 3) and arms imports ‘as may be required or desired for the strength and welfare of Bhutan’ (Article 4); as well as guarantees that ‘Bhutanese subjects residing in Indian territories shall have equal justice with Indian subjects, and that Indian subjects residing in Bhutan shall have equal justice with the subjects of the Government of Bhutan.’ (Article 5) have been kept intact. Bhutan acts as a buffer state between India and China wherein Bhutan has border of 699km with India, and 470km with China. Bhutan and China continue to have border disputes, as documented in the Bhutan-China agreement of 1998.

Prime Minister Lotay Tshering with Prime Minister Narendra Modi during the latter’s August 2019 visit


Evolving Democracy

Bhutan is an evolving democracy. The third national assembly election held in 2018 since it adopted a democratic constitution in 2008 once again brought a new party to the Himalayan Kingdom. The Druk Nyamrup Tshogpa (DNT) led by a medical surgeon and present Prime Minister Lotay Tshering won 30 out of the total 47 National Assembly seats. The Druk Phuensum Tshogpa which had won 45 out of 47 seats in the first national assembly election in 2008 was wiped out in 2013 election. It now got resurrected with 17 seats to be the only opposition party. As per the Bhutanese constitution only two top winning parties that won the primary election can contest the final election. In the process, the incumbent party People’s Democratic Party stood a poor third in the September 2018 primary election and withdrew from the election process. The DNT, a ‘people-centred and pragmatic party’ governed by the principles of social democracy was initiated in 2013 and rose to sweep the entire crucial south, south west and western Bhutan seats in 2018 election.

Bhutanese elections are fought on largely development issues. Despite the Doklam imbroglio involving India and China in 2017, wherein the Bhutanese national identity and sovereignty was the core issue, political parties are literally silent on issues of foreign policy and national security. This unique feature has been the quintessence in their election manifestoes. DNT made simple yet touching; and imaginative all encompassing election promises. These were addressed to a yak herder in mountainous Haa and inspired a young entrepreneur in a plains land border town of Phuntsholing.

For instance, it promised access to specialist services like endoscopy, ultrasound and blood test at gewog levels; additional generation of 5,200MW of hydropower, establish employment and livelihood corporation; procure farm produce from farmers at a price announced a year ahead; narrow the digital divide, establish free Wi-Fi access points; review Class X cut-off point to enable financially challenged students to continue until Class XII; build a southern east-west highway; provide six-month maternity leave and free sanitary pad to all girl-students in schools. The size of constituency and the very character of the Gross National Happiness (GNH) oriented society make elected representatives increasingly accountable.

Bhutan has come a long way from a nation strongly based on a politico-religious ethos TSA-WA-SUM (the country, the people and the King) where the Monarchy continues to remain the most decisive and core actor in both the domestic and foreign affairs. In the whole of 1990s, the country was embroiled in a global embarrassment triggered by refugee exodus mostly Nepali-speaking Lhotsampas from the southern Bhutan. For almost two decades, they lived in several refugees camps in Eastern Nepal. Most of them have now been provided the third country settlement including in US, Europe and Canada. India maintained absolute neutrality in the protracted bilateral negotiation between Nepal and Bhutan. However, the inclusion of and victory of Nepali speaking Bhutanese from southern Bhutanese districts like Tsirang, Samtse, Sarpang and Phuentosoling town does indicate the remarkable reconciliation process set in by both the Monarchy and democratic process.


Hydro Diplomacy

India-Bhutan cooperation in developing hydel power projects is a successful model. Installed hydropower capacity of 1,615MW in Bhutan constitutes less than six per cent of total potential of 30,000MW. Considered as the backbone and instrument to achieve self-sufficiency, most of these projects have been built with Indian support initially on an economic assistance basis which now has much higher loan content.

Its own peak demand is hardly 360MW (2017). Over 75 per cent of total generation is exported to India (5,180 million GWh in 2014) generating over Rs 10.69 billion in 2014, contributing over one-third of government revenues; over nine percent of the country’s GDP and over 10 per cent in its total export basket. Bhutan, with the highest per capita consumption of 2,800 kWh in South Asia, has a target of generating 10,000MW by 2020.

Bhutan has achieved 100 per cent accessibility to electricity in both urban and rural areas. Adequate power availability has started showing some crucial results in Bhutan. For instance, among the agro, forest and mineral-based categories of industries, Chukha (where a major power project is located) has the largest concentration (60 per cent, 52 per cent and 28 per cent respectively).

A recent study by CUTS found that around the hydel project sites in Tala in Bhutan, 61 per cent of households in the surveyed districts have access to mobile phones and 95 per cent in the villages of Chukha district had access to improved sanitation. Literacy rate also has been recorded as significantly high (63 per cent in Chukha district). With access to electricity, enrolment of girls increased sharply, reduced the burden of household chores including cooking as they used electric rice cookers, and other electric appliances. In Chukha district some even used electric fencing to guard their crops from the wild animals; and shifted to commercial crops (from maize as traditional crop) like ginger and cardamom and dairy products.

‘Bhutan syndrome’ where India-Bhutan cooperation on hydel power generation and power trading since 1980s stood out to be beneficial-replicable idea, has now gripped other countries in the region like Bangladesh, Pakistan, Afghanistan, Nepal and Myanmar. However, Bhutan is wary about huge debt mostly incurred in the hydro projects and wants to move away from ‘goodwill tariff’ offered by India to ‘commercial tariff’ triggered by market forces in projects like 720 MW Mangdechu commissioned very recently. Some Bhutanese professionals do argue that India’s offer of Rs 3.50 per Kw unit is in sharp contrast to what its domestic consumers pay (Rs 7) even in next door districts of West Bengal. Bhutan is keen to come out of the India-centric one country buyer model and diversify its export market partners in South and South East Asia.

This is where India’s latest Cross Border Energy Trading (CBET) Guidelines issued in 2018 could be considered as a far reaching initiative. India’s Central Electricity Regulatory Commission (CERC) has, for the first time, designed and floated the Guidelines for Import/ Export (Cross Border) of Electricity. This emerged out of a protracted discussion on the earlier draft of CBET Regulations 2017.

All the three affected countries Bangladesh, Bhutan and Nepal had expressed reservations and raised questions on the eligibility conditions imposed on participating entities, as mentioned in this draft. Certain conditions, such as the requirement that power projects in countries like Bangladesh, Bhutan and Nepal be at least 51 per cent owned or funded by Indian investors in order to be eligible to export power to India had put severe restrictions on power-generating countries that are trying to attract investment from multiple private, regional and global sources with the aim of exporting power to India and other neighbouring countries.

The revised 2018 policy document dispelled all these apprehensions. These guidelines mention four crucial objectives as to i) facilitate import/ export of electricity between India and neighbouring countries; ii) evolve a dynamic and robust electricity infrastructure for import/ export of electricity; iii) promote transparency, consistency and predictability in regulatory mechanism pertaining to import/ export of electricity in the country; and ensure iv) reliable grid operation and transmission of electricity for import/ export.

The very fact that such a framework is now in place inspires a range of stakeholders that are keen on power generation and its cross border transmission and distribution. Initiatives taken by Bangladesh government in engaging with their counterparts in Bhutan and Nepal do indicate that there is a strong possibility and acceptance on the part of India to permit the use of its grids for trans-multiple border energy flow and exchanges.

SSB troops patrolling the Indo-Bhutan border


Modernising Bhutan

A modernising Bhutan is reflected in many ways including the way various statistics are now collected, collated and published. Even two decades back statistics were in shambles, highly scattered and questionable. Today, there are volumes of documents that could become feast for scholars, analysts and policy-makers.

Bhutan is primarily an agrarian economy with a long backdrop of mountain agriculture practices and heritage. Agriculture, livestock and forest contribute about 17 per cent of its gross domestic product which stood at USD 2.53 billion in 2017. Out of the total country area of 3.84 million hectare, agriculture land constitutes over 13 per cent in which arable land would be hardly 8 per cent and irrigated land 3 per cent. Hardly 10 per cent of the total country area comes under altitude of less than 600 metres. Over 58 per cent of the population are dependent on agriculture. The highest concentration of farming population is found in Trashigang, Samtse, Monggar and Wangdue and the lowest in Gasa, Thimphu, Bumthang and Haa. Though the agriculture sector is of prime importance for ensuring food security and reducing poverty and regional disparity, the annual budgetary allocations have sharply gone down in relative terms over various plan periods from 44 per cent (4th Plan), 33 per cent (5th Plan), 5.5 per cent (10th Plan) and 6.40 per cent (Nu 126.08 billion 11th Plan 2013-2018). Bhutanese currency Ngultrum (Nu) is valued at par with Indian Rupees.

With over 80 per cent of the total population living in rural location subsistence farming has been the standard practice in Bhutan. However in recent years, there has been steady movement towards cash crops like apples, oranges, areca nut, cardamom, chillies and vegetables. Total food crops production stood at 176.76 thousand metric tonnes (TMT) in 2016 in which paddy constituted 48 per cent, maize 46 per cent and buckwheat 2.1 per cent.

There are some interesting statistical revelations. For instance, in 2016 alone farmers retained over 1.2 TMT of paddy, 1.46 TMT of maize, 67 TMT of pulses, 82 TMT of barley, 9 TMT of potatoes and 2.5 TMT of ginger for seeds purpose. This in a way indicates that the traditional seed conservation practice is still widely alive in this mountain Kingdom.

Similarly, while demonstrating that the rural population are still dependent on the age-old practice of drinking home-made alcohol, the farmers set aside 5.7 TMT of maize, 556 MT of paddy, 613 MT of wheat, 383 MT of bitter buckwheat, 253 MT of barley and 302 MT of finger millet for brewing alcoholic beverages. This Gross National Happiness enhancing healthy trend is in contrast with drugs, psychotropic substances and fatal chemical-based alcohol that pervade a huge topography of the highlands of the Eastern Himalayas including Sikkim, Darjeeling, Manipur, Meghalaya and Arunachal Pradesh and eastern parts of Nepal. Notably in 2016, medicinal aromatic plants and herbs fetched these farmers Rs 39 million and Cordyceps (yarsha gunba: caterpillar fungus) Rs 138 million. Cordyceps also called ‘Himalayan Viagra’ is widely used in China and South East Asian countries as a key ingredient in their traditional medicine system.

A survey related to the proportion of farming households by self-sufficiency of food in 2016 found that 34 per cent of the farmers stated that they did not produce enough food for the entire year and the worst-affected dzongkhags were Gasa, Samtse, Thimphu, Tsirang and Dagana. Most of them reported that they faced the highest food shortage during May and August every year and they used sale of livestock, off farm activities, borrowing from neighbours, cash remittances from employed members and daily wages as coping mechanism.


Foreign Trade and Industry

During last seven decades or so, Bhutan’s overwhelming trade has been with India. Out of its total trade of Rs 49.6 billion in 2007, India constituted 76 per cent (81 percent of exports and 69 per cent of imports). By 2016, Bhutan’s total trade more than doubled to Rs 102.62 billion wherein India constituted 85 per cent (91 per cent of Bhutan’s exports and 82 per cent of imports). This means hardly 15 per cent of Bhutan’s trade is with countries other than India. Other export destinations include Bangladesh, USA, Nepal, Germany, Hong Kong, China and others.

Chinese President Xi Jinping

Bhutan’s trade with India is deeply characterised by protracted trade deficit where imports from India have far exceeded exports to India. In 2007, this trade deficit with India was Rs 7.62 billion which sharply increased to Rs 23.23 billion (72 percent of the total trade deficit of Bhutan). Over the years, Bhutan’s export items have shown some diversification. In 2016, among the top ten export items, ferro silicon constituted over 44 per cent of its total export value followed by Portland Pozzolona cement (10.4 per cent) and cardamom (8.72 per cent.

Other export items include semi-finished products of iron, calcium, dolomite and silicon. Similarly, among the top ten import items, light oils and preparations (Diesel) constituted 26.94 per cent followed by Parts, including regulators (Hydraulic turbines and water wheels) 18.71 per cent, Parts (electric motors, generator and rotary converters) 10.97 per cent.

An ADB study stated that ‘while the expansion of the hydropower sector has helped propel Bhutan’s economic growth and development, the heavy reliance on the sector has had a deleterious effect on the country’s current account deficit. The sector’s requirements for imported capital equipment and skilled manpower as well as servicing of its short-term debts have swelled the current account deficit and put pressure on international reserves. Rapid growth in the power sector further spilled over into the other sectors of the economy, creating additional demand for imported goods and services from main trading partner, India.’

This report suggests that ‘active trade policy can be one of the most effective tools in improving the GNH. Although Bhutan has limitations in international trade, there is a room for joining global supply chain and expanding trade. Active trade policy can be a basis for improving business climate in services including ecotourism.’

Therefore, regional trade-investment exchanges are of critical importance to Bhutan because of its (i) poor industrial base, (ii) narrow export base, and (iii) endemic structural weakness.

Industrial activities have started gradually picking up in Bhutan. Out of the total industrial units of 20,093 in 2017, cottage industries constituted almost 70 per cent followed by small industries (20 per cent), medium (8 per cent) and large (2.4 per cent). Thimphu has the highest concentration of industries (35 per cent). Even in the category of large industries, Thimphu constituted almost 48 per cent concentration. Privately-owned industries are overwhelmingly dominant and in some cases they have collaborated with the foreign companies. In the broad type of industries, services constituted the highest (73 per cent) followed by contracts (17 per cent) production and manufacturing (9 per cent).

Bhutan Chamber of Commerce and Industry in one of its reports has opined that ‘private sector’s contribution to economic growth in Bhutan is very limited. This is due to strict government control over private sector business activities, lack of access to credit, limited entrepreneurial skills, and an inefficient government-controlled financial system that does not meet private sector credit needs. Also, Bhutan’s financial system is heavily burdened with nonperforming loans that, on average across all financial institutions, were close to 40 per cent. It was therefore imperative to strengthen the financial institutions in many basic ways, to move toward a market-based system as distinct from a centrally administered system, and to establish an effective banking supervision system.’

In the next line of support, India could assist in making private sector friendly policies, address skills shortages, work on trade restrictions, tariff and non-tariff barriers to exports and provide finance on affordable terms. It could facilitate building ‘hard’ infrastructure (transport, telecommunications, water, power systems, and fixed assets needed to provide education, health and sanitation) and ‘soft’ infrastructure (legal and regulatory frameworks, payments clearance and settlement systems, financial intermediaries and capital markets, collateral registries, and skills development).


Foreign Policy Dynamics

The centrality of India in Bhutan’s foreign policy has been historically well established. In its party’s objectives, the present DNT makes an emphatic mention to ‘maintain close and harmonious relations with all our neighbours, especially safeguarding and nurturing Indo-Bhutan friendship, in keeping with Bhutan’s historical tradition.’ This is aptly described as ‘gauravshali’ (prideful), ‘aashajanak’ (optimistic) and ‘anokha’ model (unparalleled) by Prime Minister Narendra Modi in his very recent visit to Bhutan. It is in this context only that the ground earth station for use of South Asia Satellite, Ru-Pay card payment facility, currency swap, national knowledge network all launched during Prime Minister Modi’s visit are of critical importance.

India has effectively used the economic assistance as a major instrument of its foreign policy in Bhutan. Up to 1989-90, India dispersed about Rs 20 billion as its total foreign economic assistance. In the following decade, India dispersed another Rs 33 billion as foreign economic assistance to developing countries where again Bhutan was the overwhelming recipient. India contributed almost 100 per cent of Bhutan’s First Plan (1961-66) outlay of Rs 107.2 million and 98 per cent of its Second Plan (1966-71) of Rs 202.2 million. However, over the years, percentage share contribution gradually went down. In the Eleventh Plan (2013-18) it hit a low of 23 per cent in the total plan outlay of Rs 213 billion and in the Twelfth Plan (2018-2023) India committed an assistance of Rs 45 billion which was 14.5 per cent of the total plan outlay of Rs 310 billion.

Will India be able to reorient and integrate its economic assistance with newer issues like institution building, good governance, reforms, science and technology, climate change impact management, youth employment, trade/ investment and non-traditional security threats including terrorism, trafficking of small arms, narcotics and even human being? This is where India could enter into new partnership with the DNT government.

National Museum of Bhutan © wikipedia-Bernard Gagnon


No One Wants War

The stand-off in Doklam between India and China triggered by the incident in the tri-junction of Bhutan, China and India propped up a range of debate, controversy and even a situation of potential conflict. Instigating voices, inciting minds and belligerent statements had dominated media discourse in both India and China. All these in a way hinted at impending conflict and inevitability of war. India clearly stated that it is through negotiation it wanted to end the Doklam imbroglio. China officially circulated a 15-page document laying its version of the imbroglio.

People at large however, do not want any kind of conflict that will have deleterious impact on economies, societies and civilians on both sides of the border. Besides its futility, any armed conflict will derail and dislocate the hard-earned process of normalisation of relationship between India and China since 1989. It took full 26 years after the 1962 war to restart some meaningful forward movement. Since then, primarily to refrain from any armed conflict, these two countries have signed six major agreements that include Maintenance of Peace and Tranquillity along the Line of Actual Control (LAC) 1993; Confidence Building Measures (CBMs) in the Military Field along the LAC in 1996; Protocol on Modalities for the Implementation of CBMs in 2005; Establishment of a Working Mechanism for Consultation and Coordination on India-China Border Affairs 2012 and the Border Defence Cooperation Agreement in 2013.

Even today India-China borders remain largely undemarcated and disputed. In the absence of a geometric line, borders remain notional and subject to respective national interpretation and imaginative construction. In such a situation, there have been national prejudices, claims and counter-claims, intrusions and withdrawals in the past. However, despite the Sumdorong Chu incident in 1986 and Depsang in 2013, the issues have been resolved in a harmonious and peaceful manner. So far 21 Special Representatives meeting of India and China on border dispute settlement have been held indicating protracted negotiations.

India’s former foreign secretary and national security advisor Shivshankar Menon, in his book Choices: Inside the Making of India’s Foreign Policy mentions that ‘With China, the LAC is a concept; neither the LAC nor the boundary is agreed upon by the two countries, let alone delineated on a map or demarcated on the ground. Yet this is probably India’s most peaceful border in the last thirty years, with no terrorists or cross border firing. The last death on the border was in October 1975 at Tulungla, and that was by accident’.

In fact the historic 1993 Agreement has provided the fundamental orientation and key direction to the negotiating process. Its Article I states that ‘India-China boundary question shall be resolved through peaceful and friendly consultations. Neither side shall use or threaten to use force against the other by any means. Pending an ultimate solution to the boundary question between the two countries, the two sides shall strictly respect and observe the line of actual control between the two sides. No activities of either side shall overstep the Line of Actual Control.’

The 1996 agreement reflected the urge and compulsions for these countries in moving towards a ‘No War Pact’ as it very specifically pointed out details of reduction in deployment of both forces and major categories of armaments like combat tanks, infantry combat vehicles, guns with 75mm or bigger calibre, mortars with 120 mm or bigger calibre, surface-to-surface missiles, surface-to-air missiles.

Besides the bilateral commitment to maintain the status quo on the border, these agreements ‘effectively delinked settlement of the boundary from the rest of the relationship and delinked it also from the maintenance of peace on the border. Both countries also formally renounced the use of force to settle the issue.’

The 2013 agreement moved another step forward in delineating comprehensive border defence cooperation including in joint combating of smuggling of arms, wildlife articles and other contrabands and also natural disasters or infectious diseases. Besides conducting joint military training exercises, India and China agreed that ‘in case a doubtful situation arises with reference to any activity by either side in border areas where there is no common understanding of the Line of Actual Control, either side has the right to seek a clarification from the other side.’

Doklam had to be treated in this perspective. Amidst all kinds of wild speculations, in actual practice, established systems and tested mechanism have already been in place for addressing any contentious issues between these countries. Instead of media, diplomacy had to play its full game.

Since 1984, Bhutan and China have held 24 rounds of Boundary Talks. They also have a comprehensive agreement on border areas signed in December 1998. Under Article 3 both sides agreed ‘that prior to the ultimate solution of the boundary issues, peace and tranquillity along the border should be maintained and the status quo of the boundary prior to March 1959 should be upheld, and not to resort to unilateral action to alter the status quo of the border.’

Beyond Doklam, India-China relations have made unprecedented progress and staggering jumps in all fronts. These deepening relationships range from trade and investment to people to people contacts including pilgrimage to Kailash Mansarovar, tourism, films, yoga, professional exchanges and technology transfers. India-China trade galloped from a mere USD 49 million in 1990 to over USD 90 billion today. There are over 12,000 medical and other students studying in China and a huge variety of technologies including in renewable energy and communications are sourced by India.

Opening of border trade routes in Shipkila in Himachal Pradesh, Lipulekh in Uttarakhand and Nathu la in Sikkim in India with Tibet Autonomous Region in China have made the border softer and friendly and revived the historical connections once again. Their partnership in global negotiations including in climate change; fruitful participation in new regional initiatives like BRICS, BCIM and SCO and setting up of global new order institutions like China-led AIIB and BRICS-led New Development Bank are fast leading to new narratives.

What is critical for these two Asian giants in a fragile country like Bhutan is to move from a competitive rivalry framework to cooperation and integration dynamics. Bhutan has developed a substantive inter-dependence matrix with India which is widely recognised and accepted by other South Asian countries and the global institutions too. This has to be consolidated. An avoidable issue like Doklam could only bring instability and disharmony in otherwise peaceful Eastern Himalayan region.


Agenda for India

India-Bhutan relations are now at a crossroad. Three emerging policies of India remain critically juxtaposed in these deeply institutionalised bilateral exchanges. Firstly, the sub-region of Bangladesh, Bhutan, India and Nepal (BBIN) incorporates India’s 10 eastern-north eastern provinces. This sub-regional entity have rich endowments, varying from bio-diversity to water, cultural ecology to mineral resources, established historical connectivity from trade routes and pilgrimages and traditional medicinal practices to agricultural heritage.

The relatively quicker and tangible progress made by other sub-regional groupings influenced this sub-region too. India’s Act East Policy is core to this sub-regionalism initiative. It rebuilds the post-partition disruptions and defunct connections and provides a potential path to economic revival to the entire sub-region. Multimodal connectivity through Asian Highways and ADB’s far reaching interventions like South Asian Sub-regional Economic Cooperation has resurrected a variety of stakeholders to act and participate in these ventures. Bhutanese young entrepreneurs can also invest in the adjoining Northeast under the highly attractive North East Industrial Development Scheme of 2018 of India. This will provide Bhutan a first ladder of opportunity to diversify its export basket.

Could Nepal, Bhutan and Bangladesh be included as partners in India’s Act East policy so that a Bhutanese trader could use the India-Myanmar and Thailand trilateral highway and ports like Sittwe in Myanmar and Chittagong in Bangladesh? This way the protracted ‘official’ deliberations in the India-ASEAN Summit, BIMSTEC and BBIN could be transformed into real ground breaking actions. The protocols and frameworks already exist.

Secondly, there are major climate change related vulnerabilities that have increasingly affected Bhutan and the entire eastern Himalayas in terms of ensuring food security, traditional livelihood, hydrological flows in its rivers and natural disasters. The 16th SAARC summit in Thimphu in 2010 issued a far-reaching statement on climate change and collectively decided to face the dual challenge of addressing the negative impacts of climate change. As part of its Plan of Action on Climate Change, it constituted an inter-governmental expert group to develop a clear policy direction and guidance. In order to comply with the provisions of the Paris Agreement at the 21st Conference of Parties (COP), both Bhutan and India avowedly declared Intended Nationally Determined Contributions. This is likely to trigger tangible changes in the future energy mix. Bhutan plans to remain carbon neutral in keeping with its transition in 2009 and is committed to keeping 60 per cent of its territory forested.

India and Bhutan can now establish the first Mountain Port focussing on a state of the art climate change centre in Bhutan. This will address agricultural heritage to glaciology melt, wildlife protection to animal husbandry, new genres of diseases and disasters to migration of transhumance and livelihood to genetic degeneration and piracy. This core institute in entire Himalayan region will facilitate institutional linkages, sharing of knowledge, information and ensure capacity building and commission initiatives on mountain ecosystems.

And thirdly, allowing Bhutan a much larger playing field in terms of its electricity production and exports. A recent study done by Jakarta-based Economic Research Institute for ASEAN and East Asia, emphatically states the high potential of both electricity trading and economic integration with Bhutan as the central actor in the South Asia’s eastern periphery. As the most robust exporter of clean energy it is ready to grapple with the market reality, that by 2020, South Asia is expected to host five of the world’s 11 megacities. And by 2040 the urban population is likely to be 48.6 per cent of the total population as against 38.3 per cent in 2010.

It is in this context, India has to increasingly recognise its third trident in its tri-dimensional role as power producer, exporter and transit provider. Both the SAARC Framework Agreement for Energy Cooperation signed in Kathmandu SAARC Summit in 2014 and India’s much-awaited Guidelines for Import/ Export (Cross Border) of Electricity-2018 now make the electricity trading in the BBIN sub-region a core issue. It makes India a pivot as a transit provider. This could actually trigger grid harmonisation, grid code and security, investment and finance, reforms and regulatory framework and tariff negotiations where India’s Northeast region could emerge as power pool. This inevitable role of India as a transit country, very much fits in the sub-regional dynamics like BBIN.

(The author is a senior professor in the School of International Studies in Jawaharlal Nehru University, New Delhi. Until very recently he was a high-end expert at the Institute of South Asian Studies in Sichuan University, Chengdu, China. He is considered as the architect of reopening of the Nathu la trade route between Sikkim in India and Tibet in China in 2006. His most recent publications are two co-authored books India China: Rethinking Borders and Security published by Michigan University Press, US, 2016 and Energising Connectivity between Northeast India and its Neighbours, published by Economic Research Institute for ASEAN and East Asia, Jakarta, 2019)


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