Modi Strengthens Energy and Connectivity Ties During Bhutan Visit

Prime Minister Narendra Modi is concluding a two-day official visit to Bhutan, focusing on enhancing energy cooperation, connectivity, and cultural partnerships between the two nations. The visit has seen significant outcomes, including the signing of seven key agreements aimed at boosting Bhutan’s energy sector and infrastructure.

Strengthening Energy Cooperation

During a press briefing, India’s Ambassador to Bhutan, Sandeep Arya, highlighted the importance of the energy partnership, stating, “Energy partnership was another very important feature of the discussions.” He noted that the foundation of hydroelectric collaboration was established in the 1970s during the reign of Bhutan’s fourth King. This collaboration has evolved into a successful model, with substantial achievements over the years.

Among the agreements signed, India pledged a concessional line of credit amounting to Rs 4,000 crore (approximately $480 million) to support Bhutan’s energy initiatives. Arya elaborated, “At the same meeting, there was an announcement of a line of credit of Indian rupees 4,000, which translates into null from 40 billion, which has been kind of extended.” The two countries also formalized a memorandum of understanding (MoU) on renewable energy, which encompasses various areas, including solar, wind, biomass, and battery storage. Arya characterized this as “a very substantive memorandum of understanding,” indicating a joint commitment to developing energy projects.

The visit also included the inauguration of the Punatsangchhu-II Hydroelectric Project, a 1,020 MW facility developed under a bilateral agreement, which Prime Minister Modi stated has increased Bhutan’s total hydropower capacity by 40 percent. Details on the project’s tariff arrangements are expected to be revealed shortly.

Cultural Tributes and Connectivity Initiatives

Prime Minister Modi paid tribute to Bhutan’s former King, Jigme Singye Wangchuck, during a gathering at Thimphu’s Changlimithang Stadium, commemorating his 70th birth anniversary. Modi praised the former monarch for his contributions to regional stability and the concept of “Gross National Happiness,” which has become a global benchmark for development. He emphasized that nation-building transcends mere economic metrics, highlighting the importance of societal well-being.

In addition to energy discussions, connectivity emerged as a vital theme. The two nations announced the launch of India-funded railway projects connecting Assam’s Kokrajhar with Bhutan’s Gelephu, and West Bengal’s Banarhat with Samtse. These projects, spanning a total of 89 km and approved by India’s Union Cabinet in September, represent the initial rail links between India and Bhutan, with an estimated cost of Rs 4,033 crore (around $490 million). Modi emphasized that such infrastructure developments will enhance access for Bhutanese industries and farmers to Indian markets.

Further commitments include the establishment of an immigration checkpoint near Gelephu, aimed at facilitating travel for visitors and investors. The Prime Minister reaffirmed India’s partnership in Bhutan’s development, stating, “India last year announced a contribution of Rs 10,000 crore for Bhutan’s Five-Year Plan.”

This visit marks an important step in solidifying the historical and cultural ties between the two countries, with Modi recalling that his first foreign trip as Prime Minister in 2014 was to Bhutan. He also noted ongoing efforts to enable Bhutanese citizens to utilize India’s Unified Payments Interface (UPI) system when visiting India, further integrating the two economies.

As the visit concludes, both nations look forward to a strengthened partnership, emphasizing sustainable development and shared prosperity.