Indian Embassy

Political

India and Bhutan have traditionally enjoyed a warm, cordial and mutually beneficial relationship. The Treaty of Friendship and Cooperation of 1949 governs the basic framework of bilateral relations between the two countries. The Treaty provides for, among other things, perpetual peace and friendship, free trade and commerce and equal justice to each other's citizens.

These relations are further strengthened by regular exchange of high level visits. India and Bhutan have also been cooperating closely at the international fora such as SAARC, UN, etc.

Trade & Economic Relations

India is the largest trade partner of Bhutan. During 2005, imports from India were of the order of Rs.12.80 billion (Rs. 3.62 billion in 1998) and constituted 75.1% of Bhutan’s total imports . Bhutan’s exports to India in 2005 inclusive of electricity amounted to Rs. 9.97 billion (Rs. 4.17 billion in 1998) and constituted 87.5% of its total exports. Bilateral trade registered an increase of 26.85 per cent as compared to the year 2004.

(in Rupees in Billion )

Year	1998	1999	2000	2001	2002	2003	2004	2005
Exports to Bhutan (Imports from India)	3.62	5.84	6.23	6.98	7.58	10.26	10.19	12.80
Imports from Bhutan (Exports to India)	4.17	4.71	4.37	4.70	5.13	5.92	7.76	9.97

Source : Dept of Revenue and Customs, Royal Government of Bhutan

Machinery and mechanical appliances, Mineral products, Base metal and base metal products, cereals, fruits, nuts, coffee, prepared food stuffs, transport equipment, chemical products, animal products, vegetable oil, plastic and rubber products, textiles, wood and wood products have been traditionally India's main exports to Bhutan. Besides electricity, calcium carbide, gypsum, ferro-silicon, particle board and Portland cement are the main imports from Bhutan. In the year 2005, revenues from export of power to India amounted to 30.20% of the total exports and 34.5% of exports to India. Top exports from Bhutan were electrical energy (Nu. 3439 million) followed by standard wire cables (Nu. 769 million), calcium carbide (Nu. 710 million), Ferro-Silicon (Nu. 642 million), Portland cement (Nu. 611 million). In imports from India, high speed diesel oil (Nu, 1275 million), polyester (Nu. 467 million), motor spirit (including aviation spirit) (Nu. 456 million). mineral products, base metals, machinery and mechanical appliances and transport vehicles formed major part. Indian vehicles dominate the automobile market and have captured more than 80% of the market in Bhutan.

Although Bhutan’s economy is inextricably linked with India, efforts towards diversification of markets and products are actively pursued. Import of consumer goods from Bangladesh, Singapore, Thailand, Japan, and South Korea found to be increasing. Due to purchase of aircrafts, Germany was leading in imports from countries other than India (COTI) in the previous year but in the year 2005 Japan topped the list followed by Singapore and Thailand. Popular imports from COTI cover machinery, electronic items, textiles, oil and other food products, plastic/rubber goods. Second largest importer of Bhutanese goods in 2005 was Hong Kong(Nu. 685 m) which included jewellery, silversmithwares, unrecorded media, CDS, cards incorporating magnetic strip, printed materials etc. Bangladesh was third largest importer of Bhutanese products(Nu.561m) which included quartz, dolomite, gypsum, limestone cement and fresh and processed agricultural products.

Indian Agencies in Bhutan

Border Roads Organizations (Project DANTAK)

Project DANTAK of the Border Roads Organization was raised in May, 1961. It is headquartered at Simtokha, near Thimphu under a Chief Engineer.

Project DANTAK has constructed, under GOI funding, over 1500 km of roads through very difficult mountainous terrain in Bhutan. Likewise, under GOI funding, Project Dantak has built all the major highways such as the East-West highway (548 km) and Thimphu-Phuentsholing highway (181 km), airfields at Paro and Yangphula and airport terminal at Paro, a number of helipads, the Indo-Bhutan microwave link, Bhutan Broadcasting Station, India House Complex, Chukha Hydroelectric Housing Complex, Power sub-stations, river training works, and several important buildings (including SAARC Convention Centre).

Project DANTAK is also constructing infrastructure works for the Tala Hydro-electric project, besides maintaining some important highways such as Eastern and Western highways and other roads.

Project Dantak would be taking up Pasakha-Manitar road, double laning of Thimphu-Phuentsholing road, Gyelpozhing-Nanglam road, Extension/Resurfacing of runway at Paro airfield under GOI funding in the 9th plan of Bhutan.

Contact :

Brig. M.S.Pillai

Chief Engineer
Project Dantak, Simtokha
PABX : 00-975-2-351003 / 351088

Geological Survey of India (GSI)

GSI initiated exploration of Bhutan's mineral resources in 1960. Within a short span of four years, it prepared the first geo-scientific database of Bhutan, which was presented to the World Scientific Community at the 22^nd International Geological Congress held in New Delhi in 1964. This database helped in identifying several cement-grade limestone, dolomite, coal and gypsum deposits in Bhutan.

With its headquarters at Samtse, GSI (Bhutan Unit) has made a major contribution to the development of cement industry in Bhutan. GSI (BU)'s exploration of limestone deposits in Samtse led to the setting up of the 300 tpd Penden Cement factory in the early Eighties. GSI (BU) has also provided geological consultancy and advisory services to major Hydroelectric Projects in the country, as well as to Project Dantak in their road construction activity. It has carried out exploration of coal deposits in eastern Bhutan, copper and tungsten in the central and southern Bhutan and gypsum, dolomite and talc in other areas.

An important contribution of GSI (BU) has been the investigation and suggested remedial measures to contain the natural hazards related to lake bursts in the Lunana area of northern Bhutan.

GSI Bhutan Unit has wound up operations in Bhutan from March 2003. All assets have been handed over to the RGoB during the visit of Shri A.K Kundra, Secretary, Ministry of Mines, GOI in February 2003.

Central Water Commission

Central Water Commission (CWC) of India started its Bhutan Investigation Division in Phuentsholing in 1961 for investigation of Hydro Power Schemes.

The CWC has been closely associated with the investigation of Chukha Hydroelectric Project on river Wangchu. Its activities have expanded, over the years, to meet the demands of mutually beneficial cooperation between India and Bhutan. Works undertaken/completed by CWC are:

Investigation of Mini/Micro Hydro Schemes.
Construction of Mini/Micro Hydro Project.
Investigation and preparation of Geylegphug Area Development Project Report.
Planning, design and construction of River Training Works for Paro Airport.
Investigation of Sankosh Multipurpose Project.
Providing Consultancy for rehabilitation of Mini Hydro Schemes in Bhutan.
Setting up of Hydro-meteorological and Wireless Stations for Flood Forecasting.

Contact :
Sh.D.K.Tewary, Executive Engineer
Central Water Commission, Phuentsholing 00-975-5-252232