Challenges in Relationship

CHALLENGES IN RELATIONSHIP

There is a growing feeling in Bhutan that India’s development of Bhutan’s hydropower production is driven by self-interest as it is getting Bhutan’s surplus power at relatively cheap rates.

Also, Bhutan wants to increase its export power tariff to India that is complained for being lesser than its cost of production

Bhutan’s concern regarding profitability of its Hydropower projects in the wake of India’s shift to renewable sources of energy like wind, solar etc..

From internal security perspective, illicit establishment of camps by militant outfits in the dense jungles of southeast Bhutan is a cause of concern for both the nations.

The Motor Vehicles Agreement that was signed in 2015 involving Bangladesh, Bhutan, India and Nepal (BBIN) was blocked by Bhutan’s upper house citing environmental concerns.

India has been occasionally complained by Bhutan for meddling in its internal affairs. This has led to negative perception of India in the minds of Bhutanese.

Growing and unsustainable trade imbalance in favour of India. Bhutan’s trade deficit is set to worsen as India’s Good and Services Tax (GST) taxes makes its exports to Bhutan cheaper and imports from Bhutan more expensive.

Bhutan has been taken as safe haven by insurgent elements like National Democratic Front for Bodoland (NDFB), United Liberation Front of Assam (ULFA) militants and Kamtapur Liberation Organization (KLO) that often pose threat to internal peace and security in the northeast region of India.

Issues with Hydropower projects

Bhutan alleged that India wanted greater role in management on Joint venture Hydro projects in Bhutan. Most of the time this compromises the interest of Bhutan.

Cross Border Trade of Electricity (CBTE) issued by power ministry will establish the monopoly of India being Bhutan’s sole power market. It restricts the type of hydro power investments that could be made in Bhutan.