Asia in Review Archive

Bhutan

Date of AiR edition

News summary

21 July 2020

India-Bhutan: New trade route opened

(ls) India and Bhutan have launched a new trade route between Jaigaon in West Bengal and Ahllay in Bhutan. It is aimed at facilitating the trade of goods and strengthening the sub-regional cooperation. Bhutan, which is in a border quarrel with China [AiR, No. 28, July/2020, 2], is a key buffer state between India and China and critical for India’s security in the region. [Economic Times]

14 July 2020

China expands scope of border disputes, stoking another with neighbouring Bhutan

(lm) Earlier this month, the Chinese government for the first time publicly put on record that is has a border dispute with Bhutan over the country`s eastern sector saying to a newspaper that “[t]here have been disputes over the eastern, central and western sectors for a long time”. In a tangential reference to India, the Foreign Ministry added that “a third party should not point fingers” in the Sino-Bhutan border dispute. [Hindustan Times] [The Straits Times]

Beijing`s assertion follows attempts at a virtual meeting of the Global Environment Facility (GEF) in late June to stop the funding for the Sakteng Wildlife Sanctuary (SWS) in eastern Bhutan’s Trashigang district, claiming that the location was “disputed”. Bhutan objected to the claim over the sanctuary, issuing a demarche to Beijing’s embassy in New Delhi. The Global Environmental Facility council later passed the project for funding. [The Hindu 1]

Between 1984 and 2016, Bhutan and China have held 24 rounds of talks to resolve their border dispute. According to discussions in the Bhutanese parliament and other public records of these meetings, the discussions hitherto have only been limited to three areas of dispute in the western and central sections of the boundary. Talks have been frozen, however, since the last round in 2016, partly due to the heightened tensions that erupted during the 2017 Doklam standoff. Back then, India supported Bhutan’s claims as the area is also strategically close to India’s Silliguri Corridor, a narrow stretch of land that connects the country’s north-east to the mainland. The issue ended inconclusively when both India and China agreed to withdraw from the plateau in August 2017. [AiR 29. December 2017]

Observers believe the addition of the eastern sector to be not so much a contest over territory as it is of Beijing’s desire to punish Bhutan for allying with its regional rival India. China seems determined to complicate the special relationship between India and Bhutan by creating a wedge between the two South Asian neighbours. In late June, India and Bhutan signed a pact for their first-ever joint venture hydropower project. [The Diplomat] [The Hindu 2]

As the wildlife sanctuary borders the Indian state of Arunachal Pradesh, which China claims in its entirety as part of “south Tibet”, the development will likely be seen as coercive by India. Partly in response to China`s new claims on the eastern region, New Delhi last week already dusted off proposals over the construction of a road that would allow India to mobilise its troops across the disputed boundary with Beijing in Arunachal Pradesh, but also towards the eastern region of Bhutan. [Deccan Herald] [The Economic Times]

28 January 2020

Bhutan: Nationwide Goods and Service Tax introduced

(jk) Bhutan’s Ministry of Finance has introduced a 7 percent Goods and Service Taxes (GST), replacing other multiple sales and customs taxes. The tax will apply nationwide. [Tax Scan]

15 October 2019

Are China and Bhutan close to striking a Doklam deal?

(jk) [The Print], citing a “top government official” claims that “China and Bhutan are working out something with regard to their dispute in the Doklam plateau. The status quo is being maintained and both sides (India and China) are holding on their positions as per the de-escalation move,” which, if true, would mean that China were to keep the territory it has “claimed” since the Doklam stand-off two years ago.

In 2017, China moved into Bhutanese territory and began building a road in a strategically dangerous location for India. Indian forces then stepped in and physically prevented the road building to continue. After about two months, Chinese agreed to stop building the road and retreated a couple of hundred metres. This “holding line” could now become the “working boundary.” 

Date of AiR edition

News summary

Web links

11 June 2019

Bhutan decriminalizes gay sex

(ls) Bhutan’s lower house overwhelmingly voted last Friday to repeal two sections of the 2004 criminal code which made “unnatural sex” illegal. The law had never been used, but Finance Minister Namgay Tshering, who submitted the recommendation to repeal sections 213 and 214, said they had become “a stain” on the country’s reputation. Especially in Bhutan’s rural areas, transgender people still face discrimination. [Channel News Asia]

23 October 2018

Power Shift in Bhutan that might favour India

(jk) In the third elections after democracy has been introduced to the Himalayan Kingdom in 2008, voters decided for a power shift to the centre-left party (Druk Nyamrup Tshogpa – DNT) which has won 30 seats in the 47-member National Assembly, the lower house of the Bhutanese parliament. All other seats are held by one opposition party which is intended by the Constitution according to which only two parties with the highest votes in the primary round qualify for the final round. Voter turnout was relatively high at 71 percent of registered voters and Bhutan’s next prime minister will be 50-year-old surgeon Lotay Tshering from DNT. [Economic Times]

The elections have been watched closely by both China and India who vow for influence in the small kingdom. India has long been a traditional partner and plays a significant role in Bhutan’s development. China has been making inroads though through its Belt and Road initiative and Bhutan has been the location of stand-offs between India and China before, most recently in last year’s “Doklam” dispute [Washington Times]. 

Due to the sensitivities, foreign policy was kept out of the election campaign. During the 2013 campaign, fearing that Bhutan was moving too close to China, India withdrew certain subsidies in an alleged attempt to influence a change of government. Relations with India remain sensitive and some candidates and activists were fined for sending statements on relations with India. Under the new government India’s position as a special partner will remain secured. [SCMP]

2 October 2018

Bhutan & Nepal: Readjusting priorities between China and India?

(ls) India’s neighbor Bhutan approaches the third general election in the country’s history on 18 October 2018. In September, voters had unexpectedly ousted the ruling People’s Democratic Party in the primary, along with it the pro-India Prime Minister Tshering Tobgay. That has awakened concerns over how the new government will manage its relations with China and India. In July 2017, geopolitical tensions surfaced when China began building a road along the sensitive Doklam Plateau on the Bhutan-Tibet border, which China claims as its own, without informing the Bhutanese capital of Thimpu. [Asia Sentinel]

Observers have held that a change in guard at Thimphu does not necessarily mean a pro-China tilt, however, it could lead to Bhutan trying to pursue a more equated relationship with both India and China. The Chinese may offer greater funding than India can afford. However, Bhutan may not be looking for huge investments. [DailyO]

Nepal’s quest for an alternate transit country with a view to reducing its dependence on India succeeded with the finalization of the text for the Protocol of Transit Transport Agreement with China on 7 September 2018. As per this text, China formally agreed to provide seven transit points – four sea ports (Tianjin (Xingang), Shenzhen, Lianyungang, Zhanjiang) and three land ports (Lanzhou, Lhasa, Xigatse) – to Nepal for trade with third countries. Nepal’s move towards China was sparked by India’s 2015-16 limitation of cargo movements through major India-Nepal border points. An analysis of the agreement has been published by the Institute for Defence Studies and Analyses (IDSA) in New Delhi. [IDSA]

24 July 2018

China-Buthan relations: Border talks resumed

(dql/am) A year after the Doklam standoff between China and India, Chinese Vice Foreign Minister Kong Xuanyou made a three-days visit to Bhutan to resume discussions on border issues centred on the Doklam plateau claimed by both China and Bhutan. In 1996 China proposed a deal under which Bhutan would obtain approximately 764 square kilometers of land in the middle and western sector of the border in exchange of 100 square kilometers land in the strategically important Doklam plateau, which serves as a tri-junction of China, Bhutan and India. [Sputnik News]

Meanwhile, India’s Border Roads Organisation (BRO) has finished the construction of a strategically important road in Bhutan, connecting one of Bhutan’s border towns with its capital Thimphu. The 30-km long road is one of several India-funded infrastructure projects in Bhutan, which is strategically important for India due to its location and border with China. [The Times of India]

20 May 2018

Political parties’ take on the state of democracy in Bhutan

(am) As Bhutan completes 10 years of being a democratic constitutional monarchy, representatives from various political parties gathered to discuss the current state of democracy in Bhutan.

The forum aimed at giving people and political parties a much-needed open space in the election year for healthy discussions on political issues. [Kuensel]

29 December 2017

India-China relations: Talks and questions of intent in border dispute

(kg) Chinese state media reported this week that China and India have reached agreement to “properly handle” border disputes. The 20th round of talks between Chinese and Indian special representatives on boundary issues took place in New Delhi Friday. During the talks, both sides “agreed to strengthen strategic communication and boost strategic mutual trust” [Xinhua]. Just how far that “strategic mutual trust” goes remains to be seen, though, and the Doklam standoff is being closely monitored by all nations of the region.

Some are watching to determine if India will continue to support Bhutan against China. Southeast Asian nations are watching China’s reactions to India’s resistance, as a possible lesson to resolving their own border disputes in the future. What is likely, according to the author of this piece, is that China will try something different soon: it has a number of options to intimidate Bhutan and to impose costs on India as a result of its recent increase in force structure and infrastructure in the region. India, says the author, should be wary, and cannot expect China to make the same mistakes it has made in its recent gambits there [Eurasia Review].