New Delhi: Prime Minister Narendra Modi’s visit to Bhutan, scheduled from November 11 to 12, will aim at strengthening India’s trade and investment ties with the Himalayan Kingdom.
India’s unique trade relations with Bhutan are governed by the 2007 India-Bhutan Friendship Treaty and the 2016 India-Bhutan Agreement on Trade, Commerce and Transit, which establishes a free trade regime between the two countries and also provides Bhutan duty free transit of goods to and from third countries.
India has consistently been Bhutan’s top trading partner -- both as an import source and as an export destination. India’s share of Bhutan’s total trade grew from 79.17 per cent in 2023 to 79.88 per cent in 2024.
In value terms, in 2024 (January-December), India's bilateral trade with Bhutan was Rs 12,669 crore, of which India's exports to Bhutan amounted to Rs 9,538 crore and India's imports from Bhutan were Rs 3,131 crore.
India has provided special exemption from any restrictions or prohibitions on export of essential commodities to Bhutan. At the request of Bhutan, a number of trade points routes have been approved for facilitating Bhutan’s exports to India and also to third countries. Recently, a B2B agreement for supply of various fertilisers to Bhutan was signed.
Further enhancing connectivity between the two countries is a priority for both the countries. This includes establishing cross-border rail links, strengthening road connectivity, establishing Integrated Check Posts and trade routes, new immigration points, multi-modal trade routes and digital connectivity.
On September 29, 2025, an intergovernmental MoU for the establishment of railway links between India and Bhutan was signed in New Delhi. Under the MoU, two rail links -- Kokrajhar-Gelephu (69 km) and -- Banarhat-Samtse (20 km) will be implemented with a total estimated cost of Rs 4,033.34 crore.
To facilitate the movement of people, including third country nationals, an Immigration Check Post was inaugurated at Darranga, Assam on November 7, 2024. The Jogigopha Inland Waterway Terminal inaugurated in January 2025 in presence of the Minister of Industry, Commerce and Employment of Bhutan will further enhance regional trade connectivity.
The two countries also enjoy long-standing and mutually-beneficial cooperation in the hydropower sector. Till date, India has jointly developed five major hydro-electric projects (HEPs) in Bhutan totaling 3156 MW, including 336 MW Chukha HEP, 60 MW Kurichhu HEP, 1020 MW Tala HEP, 720 MW Mangdechhu HEP, and the recently completed (August 2025) 1020 MW Punatsangchhu-II HEP.
A 1200 MW Punatsangchhu-I HEP is under construction. India has also been facilitating market access for Bhutan’s power sale in India, such as Basochhu and Nikachhu HEPs to trade their energy in Indian Energy Exchange (IEX).
Space cooperation is a new area of bilateral cooperation. In 2019, Prime Minister Modi and then Prime Minister, Dr. Lotay Tshering, jointly inaugurated the Ground Earth Station of the South Asia Satellite in Thimphu. Subsequently, the two sides jointly developed the India-Bhutan SAT, which was launched on November 26, 2022 by ISRO. The Indian government has been extending capacity building opportunities to Bhutanese engineers in the space sector.
Fintech is another domain of collaboration between India and Bhutan. The RuPay Card was launched in Bhutan in two phases -- Phase I (2019) and Phase-II (2020), to enable cross-border payments using RuPay cards. In 2021, India’s BHIM UPI application was launched in Bhutan. The usage of the RuPay cards and BHIM UPI has increased since their launch.
India has also supported Bhutan’s initiatives such as the Gyalsung National Service Programme (one year mandatory training for all Bhutanese youth attaining the age of 18 years). New Delhi extended grant assistance of Rs 200 Crore to the Gyalsung Project, and through a concessionary loan of Rs 1,500 crore to build the infrastructure for the Gyalsung academies. The two sides have also been engaged in training programmes for Gyalsung.
Besides, India has conveyed full support to Bhutan’s Gelephu Mindfulness City project (GMC), which is an initiative of the King of Bhutan.
(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
