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13 June 2014, Gateway House

India-Bhutan: a unique bond

Narendra Modi has picked Bhutan for his first foreign visit after taking charge, a sign that the neighbourhood is a foreign policy priority for the new government. Bhutan’s economy is closely linked to that of India’s, and despite pressures from powerful countries, Bhutan has always kept Indian interests paramount.

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Like personal friendships, a relationship between two countries is also rooted in positive memories I would like to frame Bhutan-India relations through some of my memories about India and Indians. Others of my generation share these memories, and how people in Bhutan view India can perhaps be gauged from this collective recall A narrative rooted in memory might more accurately reflect people’s views than a foreign policy perspective.The memories are multi-tiered. Older Bhutanese people remember personal friendships with Indian soldiers who built roads in our country. Amongst countless memories animating my thoughts are those about the Dantak (the Indian military’s road building task force) soldiers who came to work in Bhutan in 1961 on behalf  of the Indian government. In the early 1970s, the dirt road-highway that broke through my village of Ura in central Bhutan, where I grew up, was built by the Dantak soldiers. The soldiers burst onto the Bhutanese landscape with spades, picks, shovels, earthmoving machinery and explosives, to pave the way for motorised transport and trade with India

With the exception of  elders who had visited the borderlands of  India and Bhutan, or the eight holy places in the Gangetic plains nobody in my village had seen Indians in such numbers before. Our encounters with the Dantak workers during those days were one of the earliest experiences that shaped our thoughts about Indians and Indian institutions. The Bhutanese people consulted doctors at Dantak camps; travelled in Dantak trucks when that was the only motorised transport in Bhutan; bought household items from Dantak canteens; and made friends with the soldiers In these soldiers, the people of  Bhutan saw not the India of  ancient Buddhist seers or the modern India of  the bureaucratic  elite of  aid administration, but ordinary men who worked in very difficult conditions. In their struggle for livelihood, the soldiers reached out to ordinary Bhutanese engaged in similar struggles.

The encounter was humanising for both sides. The forbearance with which the soldiers battled adverse weather, harsh working conditions and accidental deaths, far away from their homes and families, did not go unnoticed among the villagers. It impressed even the toughest folks. These traits of endurance and resilience among the Dantak soldiers evoked a high regard for Indians in general, which persists to this day. This kind of regard may not count much in the foreign policy calculations of India or Bhutan, but these memories are what people hold in their hearts. Friendship with India would otherwise be an abstract idea for the ordinary Bhutanese.

Strategic and symbolic roads

The roads built by the soldiers were symbolic as well as strategic. Communications and transport linkages between countries are a reflection of their international relations, and the roads between Bhutan and India demonstrate our bilateral relationship. By laying the trunk roads of Bhutan in the 1960s and 70s, the Dantak subserved the broader objectives of the bilateral relationship – to develop and modernise Bhutan and consolidate the sovereignty and security of Bhutan.

Over the last five decades Project Dantak of  the Border Roads Organisation, has built 1,600 kilometres of  roads in Bhutan. The other projects it has completed include airfields, helipads, the telecommunications network, a microwave link, a broadcasting station, 34 hydel sub-stations, river works, schools and colleges.

The road linkages started in the 1960s against a backdrop of tension between India and China. Since then, Bhutan has been cautious not to undermine India’s security interests in the region, while it has waited patiently for a more normal period to demarcate its border with China in places where it is contentious.

The slow process of  normalisation started in 1974 when a Chinese delegation attended the coronation of  the Fourth King of  Bhutan at the invitation of  Bhutan. Xinhua, China’s official news agency, described the visit “as a new page in the friendly contacts between the two countries.”

Discussions between Bhutan and China about the boundaries have been held numerous times since 1984. But the final agreement on border issues is yet to be signed. This may be due to the delay in arriving at a consensus on the demarcation of the so-called trijunction near Chumbi valley, an area where Bhutanese, Indian and Chinese borders meet. The Indian media and security studies make clear Indian sensitivities on this issue.

In 1998, Bhutan and China signed an Agreement on Maintenance of Peace and Tranquillity in the Bhutan-China Border Areas. There is no formal trade along the Sino-Bhutan border, although there were many historic routes to the North. Bhutan imports Chinese goods via India. The web of roads and communications between the main economic centres in Bhutan and neighbouring Indian towns is now dense enough to facilitate the bilateral economic integration that has begun to take centre-stage.

The borders between Bhutan and India are porous and teeming with trade and people. The demographic pressure on the Indian side, in Assam and Bengal, pushes through at many points along the border. Bhutan is greener and emptier, and full of natural resources. Indians living close to the border can and do easily help themselves to fuel wood and timber, and at times the wildlife of Bhutan.

The routes between major towns in eastern and western Bhutan go through Assam. The volatile law and order situation in Assam often results in road closures as a form of protest. The flow of goods and people between eastern and western Bhutan is frequently interrupted due to these strikes. The closures also severely affect the construction of large-scale projects.

Compared to the bustling activities along the Bhutan-India border, the northern side of  Bhutan, towards Tibet, is silent mountainous wilderness, with lonely footpaths trodden by a dwindling number of  yak herds and herdsmen, and occasionally by a small number of  intrepid Bhutanese foot merchants plying between Bhutanese and Tibetan border towns, peddling a few backloads of  Chinese thermos, china cups and rayon-imitation silks. These merchants have to assiduously dodge the border guards of the Royal Bhutan Army, because formal trade, even on horseback, is prohibited. Ordinary Bhutanese merchants wonder at this discouragement, for on the other side of the border there are cheaper goods. They wonder what harm such petty trade on horseback could do.

As all this would indicate, for Bhutan, access, trade and technological integration are “undivorcably” deep with India. This makes Bhutan more oriented towards South Asia and less towards China. Bhutanese and Indian foreign policies mutually support this orientation. Any other geopolitical orientation for Bhutan is unlikely in the foreseeable future.

Spiritual journeys and connections

My second set of memories is of India as the holy Buddhist land. A family pilgrimage when I was in my teens became the reference point for me. For many Bhutanese not concerned with commercial ties, India  is venerated as the land of  the eight  pithas, with Bodh Gaya as the spiritual centre, and perhaps too idealistically, as “the centre of  the world.” This concept of India might elude foreign policy thinkers in either country, particularly Indian foreign policy makers who are not yet fully conscious of  the potential importance of  the Buddhist heritage of  India for its tourism and foreign policy.

But in the mind of the ordinary Bhutanese, India as a society where Buddhism originated, takes precedence over notions of  India as a superpower known for many achievements such as its software industry, economic size, and the Agni missile. These things matter more among the high-level official strategists of India.

In the high monastic circles of  Bhutan, which are influential among ordinary Bhutanese, India is still regarded as the origin of  Buddhist knowledge and literature, translated and transferred to Tibet and Bhutan. Indo-centric Buddhist practices including Kashmiri and Bengali tantrism continue in remote sites in Bhutan, while they have become relatively eclipsed in India. For the ordinary Bhutanese, whose world view is shaped by Buddhism, classical Indian Buddhist thinkers such as Nagarjuna, Vasubandhu, Dharmakirti, Chandrakirti, Asanga, and Shanti Deva, are still the apogees of intellect that adorn the world.

The geographical reorientation of Bhutan towards India was reinforced by our country’s lost connections with the Tibetan Autonomous Region of  China as the other holy land, as well as the main trading partner, before the 1950s. The routes and passes linking Bhutan and Tibet have been inactive since then. After the turmoil in Tibet resulting from its integration with the People’s Republic of China, Bhutan withdrew its representative from Lhasa and formal cross border transactions came to a standstill.

Some of the Tibetan diaspora found homes in Bhutan, but the majority went to India. In India, the Tibetans founded Buddhist colleges in Dehradun in Uttrakhand, Bhir in Himachal Pradesh, Gangtok in Sikkim, and Byllakuppe in Karnataka. This vigorously renewed the status of India as the land of  Buddhist learning in Tibetan languages. A large number of Bhutanese monks study privately in these monastic colleges, compensating for the loss of academic exchanges with Tibet. In the mandatory once-in-a-lifetime spiritual itineraries of Bhutanese are pilgrimages to the holy sites of the Gangetic plains in India. Among other holy places, tens of thousands of Bhutanese visit Bodh Gaya every winter as part of their journey to the major holy sites in the life cycle of  the Buddha.

In the reverse direction, nearly 33,000 Indian tourists, mostly from Bengal and Bihar, visited Bhutan in 2011, for the more mundane purposes of honeymoons and tourism. It is during these journeys that some of  them shed their vague preconceptions of  the Bhutanese people as being the same as the tribes of  northeast India. They are surprised that Bhutan does not conform to their images of the country. They find the Bhutanese not to be the tribes they imagined, and the beautiful country not the budget destination they expected. The general Bhutanese standards of living in urban areas are comparable to the middle class in India, and food, hotels and taxis are more expensive than the tourists presume.

Tourists from mainland China also visit Bhutan, usually prompted by the idea of Bhutan as the “happiness-country.” Bhutan has become associated in the media abroad with the concept of Gross National Happiness (GNH), authored by the fourth King of  Bhutan, His Majesty Jigme Singye Wangchuck.

The dissemination of the GNH has rebounded positively, with an increase in tourism.In 2011, 2896 tourists from the People’s Republic of  China visited Bhutan according to the Tourism Council of  Bhutan.  The high-end Chinese tourists stay in Indian joint-venture luxury hotels, where they rub shoulders with Indian luxury tourists and Indian hotel management. The government of Bhutan has officially promoted foreign direct investment (FDI) in hotels, while a muted section of modern Bhutanese doubt the wisdom of hosting foreign companies in a wide spectrum of  our small economy.

Cultural and material streams

FDI from India, including in hydro-power projects, is not the only new face of the economic integration of Bhutan. The degree to which the Bhutanese have assimilated Hindi and Indian products into their lifestyle is possibly as reassuring for Indian tourists as it is for geopolitical strategists. The Bhutanese pick up Hindi from Bollywood movies, which were extremely popular until the early 1990s. In the 1970s and 1980s, Bollywood movies were not only a significant leisure activity among the elite; they also influenced the attitudes and behaviour of Bhutanese youth and the early urban settlers who now form the middle class in Bhutan.

In the decades since then, movie tastes have stratified, with the urban middle class watching far less Bollywood, simultaneous with the rise of English as the medium of official discourse and a reorientation of  entertainment needs toward the Anglo-Saxon West.

Bollywood’s influence aside, the presence of  as many as 60,000 Indian workers in Bhutan at any given point of  time, working mostly in the construction and hydro-power sectors, and in other industrial installation projects, forces a large number of  Bhutanese to speak Hindi. Bhutan offers employment at higher daily wages, on average at Rs. 175 for an unskilled worker and Rs. 375 for a mason or carpenter. This is attractive for workers, especially from the neighbouring districts of Assam and north Bengal.

There is also a huge demand for Indian food, fuel (diesel, petrol, aviation fuel, kerosene), iron and steel, plastic and rubber products, base metal, manufactured goods and motor vehicles. Bhutan imported Rs. 30 billion worth of goods in 2011 from India. [5] This excludes the value of  services, mostly related to hydroinstallation and maintenance, imported from India.[6]

Over 90% of Bhutanese exports and imports are with India. Despite an emphasis on diversification, this is proving to be challenging for Bhutan – we are running out of rupee reserves to settle payments in rupees.

Bhutan has four main streams of earning the all-pervasive rupee: development grants from the government of India, earning from exports of electricity, exports of other merchandise, and credit (loans). These four factors determine the size of the rupee inflow from India. The year 2011 showed the highest annual amount of grant inflow, at Rs. 9 billion. The outflow of the rupee depends on imports, debt service payment, remittances of Indian workers, expenditure on education, healthcare, pilgrimages and tourism while in India.

Of late, the rupee reserve has been unable to catch up with the rupee outflow. This imbalance in the Bhutan-India economic flows could worsen. With the emerging imbalances, Bhutan is concerned that the annual grant component may decrease in real terms and the loan component may increase. It is going to be a challenge to balance economic self-reliance and reliance on the Indian government.

Education and assimilation

My third set of memories is from my student life. Many Bhutanese have studied in schools and colleges in India, often with scholarships from the government of India. This is not the case now, with thousands of Bhutanese enrolled privately in Indian colleges, where discipline and academic standards are not so demanding and admissions are easier. Should not the governments of India and Bhutan channel these students into better institutions? The quality of education will reflect on their lives, and on their attitude to the nation where they studied India and Indians were part of the schooling and university experiences of  a large number of  Bhutanese, who today dominate the Bhutanese Parliament, the armed forces, the bureaucracy, the private sector and public sector enterprises. The fact that His Revered Majesty King Jigme Khesar attended a year-long course at the National Defence College in Delhi after his graduation from Oxford University, where he read politics and international relations, shows the importance attached to such experiences in Bhutan at the highest level.

The ease of interaction with Indians in general, and Indian bureaucrats in particular, with whom Bhutanese officials and businessmen later come into contact, comes from their long sojourns in India. The multicultural tolerance of Bhutanese professionals can also be attributed to their sub-conscious assimilation into India. This is of great importance in acquiring values for global citizenship.

On the other hand, their tolerance for inefficiency is also attributed, justly or unjustly, to the same assimilation process in India. In any case, the reputation of Bhutan in India and of India in Bhutan, is disproportionately important and both New Delhi and Thimphu are attentive to this importance.

My fourth set of memories consists of  media reports about the relationship between India and Bhutan. Memories are enhanced by visual representations. The Bhutan-India friendship is memorialised by black and white photographs of  Nehru and the revered Third King His Majesty Jigmi Dorji Wangchuck  (reign: 1952–1972) exchanging khadars (white scarves symbolising goodwill) in 1958, during Nehru’s foot journey to Paro via the Nathula pass and Chumbi valley. In a significant mythic rendering of the event, the temple wall paintings of  Dochula near Thimphu depict Nehru and the Third King horse-riding through a Himalayan meadow.

My childhood memories flash back to these photos, found pasted even on the smoky walls of rural houses. For the old generation of Bhutanese, the arduousness of Nehru’s trek mattered as much as its political significance. Had he come by helicopter, it would be less remembered, and would have resonated less with the older Bhutanese. In the official and political circles of Bhutan the narrative that dominates is that of  Nehru visiting Bhutan and the “friendship” between two men that began a national friendship.In fact, the Bhutan-India relationship as a whole remains unchangingly represented by Nehru and the much-revered Third King of  Bhutan. All the Indian leaders and national figures visiting Bhutan are subsumed in the image of Nehru. Simply put, the memory of Nehru’s visit still frames the subsequent visits of  Indian leaders in the minds of  many Bhutanese. When Nehru’s descendents such as Rajiv, Rahul, or Priyanka visited Bhutan, the framing got even more resonant, with a dynastic perception of India in the minds of Bhutanese.

Electricity and an incipient crisis

Although Tibet and Bhutan shared close and deep relations before the 1950s, how rapidly Bhutan adapted its policies southward towards India when that connection was lost in 1959, is a testimony to the main architects of Bhutan-India friendship – the third and fourth Kings of Bhutan along with successive Indian leaders such as Nehru, Indira Gandhi, Rajiv Gandhi, Morarji Desai, Narasimha Rao and Manmohan Singh, to name a few.

The financing of the five-year development plans of Bhutan was also instrumental in the reorientation of  Bhutan towards India. Although there are numerous other donors, India as the majority donor has become a reference point in the Bhutanese mind.  Hydro-power cooperation is growing in prominence – the government of  India now provides 60% of  the cost as loan at concessional interest rates and 40% as grant. The grant component is mutually beneficial as it is aimed at electricity import (to India) tariff, based on the cost recovery model, which is affordable to Indian bulk customers.

Bhutan exports power to India at a negotiated rate of Rs. 1.98 to Rs. 2 per unit, depending on the agreement specific to a hydro project. India has significant stakes in the Bhutanese hydro-power sector. The energy export is two-way: Bhutan imports fossil fuel from India and, in monetary terms, the size of  fossil fuel import from India is almost equal to the export of  hydro-electricity.

A revision of electricity tariff is under consideration between the two governments, but fuel price increases are transmitted to Bhutan whenever they are revised in India. The same is true of the prices of  all imports from India. This has led to a deterioration in the terms of trade in Bhutan over time. Bhutan’s main export is electricity and if its price per unit does not rise reasonably in line with the inflationary impulse transmitted from India via imports of goods, a financial crisis can develop in Bhutan. A crisis is already incipient, leading to a rupee deficit that was paid for by borrowing at commercial rates from the State Bank of India. This further adds to the rupee debt stockpile. I make this observation with affection for the deep relationship between the two countries. It is not meant as callous criticism of those who

negotiate the price of  electricity.

Gratitude and mutual respect

India’s role has been progressive and dominant in every major review of the five-year plans. It has become reflexive to loudly proclaim gratitude to India in the Bhutanese Parliament hall from time to time, with Indian embassy officials sitting prominently in the gallery. Not many national parliaments pay such tribute to a neighbour. Rituals can be deeply meaningful or trite, and depend entirely on the deeper context. I believe this expression of gratitude remains mostly heartfelt and it should remain so, for it will lose all meaning if it becomes orchestrated among politicians.The history of  Bhutanese foreign policy shows that it has wisely not given in to geopolitical role-playing between India and China. Like any nation-state which is part of  the unavoidable process of  globalisation, Bhutan will cautiously increase its network of  international relationships. But stability and security are our priorities. For 50 years, India has been the primary source of  development aid for Bhutan. The stable and mutually respectful partnership between Bhutan and India has helped the steady progress of  Bhutan and this cannot – and should not – be replaced by any other relationship.

On the other hand, neighbours are not chosen. China is Bhutan’s neighbour too and a good Sino-Bhutanese relationship is absolutely necessary for Bhutan’s long term security. At the forefront of all concerns at this moment are Sino-Bhutanese and Sino-Indian boundaries. Bilateral reconciliations of the boundary issues will help our relationships move on to higher planes of cooperation.

Karma Ura is the President of the Centre for Bhutan Studies, a social science research centre based in Thimphu

This is an extract from the Gateway House publication Neighbourhood Views of India which was brought out to commemorate the 27th SAARC day. 

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