iastoss.in harveersinh@gmail.com Indias Neighborhood: Bhutan, The Trusted Friend 747 A.D.when the great Indian saint Padmasambhava introduced Buddhism in Bhutan, which has since then permeated all aspects of Bhutanese life. Chinas invasion of Tibet (1910-12) and subsequent claims made on Bhutan resulted in the signing of the Treaty of Punakha in 1910 with British India. India sponsored Bhutans application for UN membership in 1971. Major Support: oKholongchu Hydropower Project (600 MW), Inaugurated by PM in June. oThe Chhukha (336MW),oKurichhu (60MW), andoTala (1020MW) Hydro Power Projects;oThe Penden and Dungsam Cement Projects; and the Paro Airport Project. 2013 saw some high level exchanges with the visit of His Majesty Jigme Khesar Namgyal Wangchuck, the King of Bhutan to India as the Chief Guest to the 64th Republic Day celebrations.In the first overseas visit after being elected Prime Minister, Lyonchhen Tshering Tobgay (PMTT) visited India from 30 August to 4 September, 2013 PM of India also chose Bhutan for the first foreign visit. He addressed the joint session of the parliament. India shares a 605 kilometres (376 mi) border with Bhutan and is its largest trading partner, accounting for 98 percent of its exports and 90 percent of its imports. GoI extended a standby credit facility of Rs 1000 crores to RGoB to help Bhutan overcome the rupee liquidity crunch. This Credit Facility was provided at a concessional interest rate of 5% per annum. It is valid for 5 years. The First Five Year Plan (FYP) of Bhutan was launched in 1961. Since then, India has been extending financial assistance to Bhutans FYPs. The 10th FYP ended in June 2013. India's overall assistance to the 10th FYP was a little over Rs. 5000 crores, excluding grants for hydropower projectsThree hydro-electric projects (HEPs) totaling 1416 MW, (336 MW Chukha HEP, the 60 MW Kurichu HEP, and the 1020 MW Tala HEP), are already exporting electricity to India. In 2008 the two governments agreed to further develop a minimum of 10,000 MW hydropower generation capacity by 2020 and identified ten more projects. Of these, three projects totaling 2940 MW (1200 MW Punatsangchu-I, 1020 MW Punatsangchu-II and 720 MW Mangdechu HEPs) are under construction and are scheduled to be commissioned in the last quarter of 2017-2018. There are about 56,000 Indian nationals living in Bhutan, employed mostly in hydro-electric projects and construction and roads industry. In addition, between 8000 and 10,000 day workers come into Bhutan everyday to work in border towns India Bhutan iastoss.in harveersinh@gmail.com Sino-Bhutan Relations Bhutan is the only country in South Asia which does not have diplomatic relations with China Bhutan forms one of the fingers of Chinas five finger policy.China considers Tibet as the palm consisting of five fingers policy namely, Ladakh, Nepal, Sikkim, Bhutan and Arunachal Pradesh.The peripheral policy forms the core of Chinas external strategy. Relations with these countries help to avoid external instabilities that may cause any internal frictions.China needs a peaceful and stable periphery for its Peaceful Development/Rise.The PRC has outlined its plan of extending the railway network from Lhasa to Zangmu on the Nepal border.According to this blueprint, yet another line will branch out midway from the line at Shigatse. This line will move east and go up to Yadong, at the mouth of Chumbi Valley- strategically located at the tri junction of India-China-Bhutan.Bhutan has four disputed areas that stretch from Dhoklam in the west, Charithang, Sinchulimpa and Dramana pasture land. Bhutan has been a strong ally of India and has refrained from establishing relations with China. It was concerned over the takeover of Tibet in 1950 and was anxious that its sovereignty would be compromised because of Chinese claims to Bhutan as part of a greater Tibet. This had led to the closure of the Tibetan-Bhutanese border in the north. Election in BhutanJuly 13, 2013 : the defeat of ruling incumbent Druk Phuensum Tshogpa (DPT)by Peoples Democratic Party (PDP It must be noted that in the National Assemblys primary election held on May 31, DPT got 33 votes as compared to 12 of PDP.Government of India had stopped subsidizing kerosene and cooking gas for Bhutan in the first week of July. Indian government was unhappy with DPT leader and Bhutanese Prime Minister Jigme Y. Thinley because it held that Thinley was arbitrarily running his foreign affairs. Still there are many official and unofficial arrangements that ensure whoever is in power there will have to abide by the interests of India while shaping Bhutans internal and external policies.In Rio de Janeiro Bhutans PM Thinley had an informal chat with the then Chinese Premier. China is Bhutans immediate neighbor other than India despite this was the first meeting between both heads of governments.Bhutans all ten five-year plans till date have been supported by India and many hydel projects too are dependent on Indias aid (benefitting India only) Bhutan procured 15 Chinese buses by Bhutan in particular that invited Indias ire. iastoss.in harveersinh@gmail.com Indian government is aware of Chinese plan to lay rail line up to Chumbi Valley located at the interjection of India (Sikkim)-Bhutan-China (Tibet)The very day this project is completed; Bhutan will become free from the obligation that arises due to its three-sided land locked territory from India.Apart from cutting subsidy on oil and gas to Bhutan, India has also announced nonpayment of excise duty refund and scrapping subsidy on power generated from Chukha hydel project.