Strategic Analysis

Strategic Analysis:
A Monthly Journal of the IDSA

April 1999 (Vol. XXIII No. 1)

Indo-Bhutan Relations: Serving Mutual Interests
By Padmaja Murthy *


“...the Indo-Bhutan ties are a model in international relations today. India is a big power and Bhutan is a small land locked kingdom. Still, we get along very well. What can be more satisfying than this model relationship?”

The then Foreign Minister Dawa Tsering of Bhutan in an interview to The Tribune, March 11, 1996.

In a region characterised till not so long ago by the familiar trend of mistrust and suspicion primarily directed towards India, there has been one exception—the Indo-Bhutan relations. Both countries have been able to strike the right note and sustain their friendship. The treaty of 1949 between India and Bhutan is said to be central to the two countries’ relations. However, this cordiality has not come about by freezing relations as they were in 1949. If anything, Bhutan of today has changed in all respects, including its economy and international stature since 1949. The relationship has, thus, been one of dynamism and change.

What are the factors which link the two countries? Are Indo-Bhutan relations really free of tensions? Is the “perpetual peace and friendship” phrase used in the 1949 treaty to describe Indo-Bhutan relations really true for all time to come? Is it a relationship where India as the big power, puts pressure on Bhutan? Does the relationship serve only Indian interests or is it equally beneficial to Bhutan? What are the challenges that the relationship will face in the future in the context of the changing domestic, regional and international environment? Which factors, in spite of the challenges, will keep the two countries together in the face of the choices that they have? This essay attempts to answer these questions to understand the unique relationship that the two countries share.


The Treaty of 1949 and its Working

The Treaty of 1949 provides the basic framework for conducting relations between the two countries. This section examines the Treaty in terms of its provisions and working. (For Text of the treaty see Annexure of this article)

Provisions of the Treaty

The Treaty of 1949 has ten Articles. The very first Article tries to perpetuate Indo-Bhutanese friendship for all time to come by stating, “There shall be perpetual peace and friendship between the Government of India and the Government of Bhutan.” However, the most important provision in the treaty is its Article 2, according to which, “The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part, the Government of Bhutan agrees to be guided by the advice of the Government of India in regard to its external relations.” The point that has provoked some amount of critcism or controversy pertains to the second part of this Article since it tries to qualify Bhutan’s external relations. Other Articles of the treaty deal with the annual payment of Rs. 5 lakh by the Government of India to the Government of Bhutan in continuance of the compensation which was paid by British India. Independent India however, has increased the amount to Rs 5 lakh from Rs 1 lakh earmarked earlier. To mark the friendship between the two countries, India agreed to return to the Government of Bhutan about 32 square miles of territory in the area known as Devangiri and the same was spelt out in the treaty. The treaty also establishes a free trade regime between India and Bhutan. Further, the citizens of both countries residing in each other’s territory will be treated on par with own citizens. The treaty also has provisions for extradition of Indian citizens in Bhutan and of Bhutanese citizens in India when required, and the procedure for the same has been spelt out. The mechanism for settling disputes arising out of differences in interpretation or application of the treaty is also mentioned. It is also stated that the treaty shall continue in perpetuity unless terminated or modified by mutual consent. Another important article is Article 6 of the treaty which refers to Bhutan importing arms and ammunition, machinery, warlike material or stores for the strength and welfare of its country. The clause is qualified by stating that such imports shall be undertaken with the assistance and approval of the Government of India from or through India into Bhutan. The Government of Bhutan, according to the treaty, agrees that there shall be no export of such arms and ammunition, etc. across the frontier of Bhutan either by the Government of Bhutan or by private individuals.

Historical Perspective to the Provisions of the Treaty

Reading and interpreting the treaty of 1949 between India and Bhutan in isolation to the relations and treaties which existed between Bhutan and British India will give an incomplete picture. In this context, the relevant provisions of two important treaties concluded between British India and Bhutan—the Treaty of Sinchula, 1865, 2 and the Treaty of Punakha, 19103 are looked into.

Article 1 of the Treaty of Sinchula reads, “There shall henceforth be perpetual peace and friendship between the British Government and the Government of Bhutoon.” Article 4 goes into details of the reasons for the compensation paid by the British Government to Bhutan. It is in continuance of this Article that India, as spelt out in Article 3 of the 1949 Treaty, till date makes an annual payment of Rs. 5 lakh. Article 6 of the 1865 treaty spells out details on surrender of Bhutanese subjects accused of any crime and taking refuge in British dominions. The various crimes are then mentioned. It is the same for British subjects accused of crimes and taking refuge in Bhutan. Article 9 of the treaty refers to provisions of free trade and commerce between the two governments. Article 8 is very important and it refers to the British government’s arbitration in matters of differences which Bhutan might have with the Rajahs of Sikkim and Cooch Behar, and that the British government’s decision would be abided by. Article 2 of the 1949 Treaty should be read in the background of Article 8 of the Treaty of 1865.

The Treaty of Punakha of 1910 has only two Articles. One deals with increasing the amount of the annual allowance paid to the Government of Bhutan by the British Government. The other deals with revising Article 8 of the 1865 Treaty. The revised Article reads, “The British Government undertakes to exercise no interference in the internal administration of Bhutan. On its part, the Bhutanese Government agrees to be guided by the advice of the British Government in regard to its external relations. In the event of disputes with, or causes of complaint against, the Maharajas of Sikkim and Cooch Behar, such matters will be referred for arbitration to the British government which will settle them in such manner as justice may require and insist upon the observance of its decisions by the Maharaja named.” Article 2 of the 1949 Treaty should be read along with this provision of the 1910 Treaty. It throws light on the continuity of arrangements as existed between Bhutan and British India. It is thus important to note that all the provisions of the 1949 Treaty were not being negotiated for the first time.

At this stage, it is important to mention the circumstances under which the British sought to include Article 8 in the treaty of 1910 by which Bhutan agreed to be guided by the advice of the British government in regard to its external relations. The 1865 Treaty enabled the British government to negotiate the disputes of Bhutan with regard to Sikkim and Cooch Behar. However, with the Chinese forward policy towards Tibet and other Himalayan states, the British became concerned. The Chinese representative in Lhasa sought to liken the union of China, Tibet, Nepal, Bhutan and Sikkim to the blending of the five principal colours which would produce an excellent political model like a beautiful design. The British realised that it was essential to prevent China from encroaching on Bhutan if they wanted peace on the frontier. The British were keen on maintaining Nepal, Bhutan and Sikkim as buffer states. Bhutan however, remained vulnerable to Chinese influence in as much as China claimed suzerainty over Bhutan. It was in such circumstances that it was proposed that in view of the great importance of the British interests at stake, it was necessary for the Government of India to persuade Bhutan to place its foreign relations under British control. For, going by the clauses of the treaty of 1865, the British could not prevent Bhutan from receiving Chinese agents. In return, it was suggested that the British should abstain from interfering in the internal administration of the country. The Treaty of 1910, thus, was an attempt by the British to checkmate China’s ambition to either impose its authority on, or interfere in, Bhutan. Through this, Bhutan was maintained as a buffer state. The clause was thus prompted by the circumstances and postures advocated by China. 4

It is appropriate to note here that the British did not want to control Bhutan. One of the very first British missions to Bhutan advised against it in terms of the inhospitable terrain under which it would be difficult to hold the conquest. The British aim was primarily to find a route to trade with Tibet through Bhutan. 5 Later, there was some controversy over the possession of the fertile and economically valuable duars of Assam and Bengal which was settled through the 1865 Treaty. 6 Most important, even after the 1910 Treaty was signed, (following which Bhutan’s external relations were placed under British India) the British Indian government maintained that there was no departure in its policy of non interference in the states bordering the frontiers of India and the obligations would not go beyond what was stated in the letter of the treaty.

Working of the Treaty of 1949

The major provision which has to be examined is Article 2 of the treaty of 1949. When the controversy regarding Sino-Bhutan boundary arose, Nehru wrote to the Chinese, “Under the treaty relationship with Bhutan, the government of India are the only competent authority to take matters concerning Bhutan’s external relations, and, infact, we have taken up with your government a number of matters on behalf of the Bhutan government.” 7 However since 1984, the government of India has not objected to Bhutan and China having direct bilateral negotiations regarding the border dispute on the northern side of the border. 8 More than ten rounds have been held so far and their differences seem to have narrowed down. One of the factors enabling this was the move towards normalisation of relations between India and China.

Similarly, as Bhutan expands its relations with the outside world, it is interesting to note that the strict implementation of the 1949 Treaty does not take place. In 1971, Bhutan was the second country after India to recognise Bangladesh. 9 The decision was in the interest of the Indian government. However, the important point is not the issue of recognition of Bangladesh by Bhutan but the fact that Bhutan took an independent foreign policy decision—which it could do again on any other issue.

One of the bilateral foreign policy problems presently facing Bhutan is its negotiations with the Nepalese government on the refugee issue. Bhutan’s interactions with Nepal surely come under the realm of Bhutan’s external relations. India’s position, in spite of all that is written in the 1949 Treaty, has been that it will not interfere in the bilateral matter of the two countries. 10

It is not being indicated that India should go in for strict implementation of the Article 2 of the 1949 Treaty and thereby restrict the space Bhutan has to independently conduct its foreign relations. In the present circumstances neither is this feasible nor desirable. The changing regional and international environment and Bhutan’s own desire to assert its independent sovereign status have resulted in not only a flexible interpretation of Article 2 of the Treaty of 1949 but also, in India assisting Bhutan to have an independent identity in the international forum. In fact over time, the treaty has been amended in spirit though not in letter. An important question, which follows, is whether this duality will stand against India’s security interests. It will not be unwise to conclude that if a situation emerges in the near future whereby China makes moves with reference to Bhutan which are inimical to India’s security, the position of India will not be that it is a bilateral issue between China and Bhutan. Would it be possible for India to then selectively apply Article 2 of the treaty with reference to a particular country or to a particular situation?

It is important to emphasise that the aim of Article 2 of the Treaty is not to bind Bhutan but to ensure India’s security interests. At present India and Bhutan share a cordial relationship and the Bhutanese presently do not have any complaints over the provisions of the treaty. However, there have been occasions when there was controversy over its provisions, especially regarding the interpretation of the word ‘guidance’. 11 Thus, in a situation where Article 2 is not strictly implemented, it is being suggested that India should seek an assurance that issues concerning security of India will be respected by Bhutan. This will ensure that future changes in either the regional or international environment will not adversely affect India’s security interests.


Bhutan’s Interests

For Bhutan, its relations with India have been beneficial on three specific fronts: the domestic, international and economic.

Domestic Affairs: Non Interference by India

Even in the period of British India, there was no interference by it in the internal political struggle and civil war that was taking place in Bhutan. The monarchy as we know it today was established only in 1907. 12 British India, by recognising it, gave additional legitimacy to the monarchy and contributed to stability. Later, in 1910, the Treaty of Punakha, by incorporating the clause that there would be no interference in the internal affairs of Bhutan, ensured the primacy of the new regime. This continued after the withdrawal of the British from India. With a democratic India as its neighbour, it was feared that monarchy in Bhutan could face problems. However, this was not to be. Presently, even as Bhutan is witnessing a movement for change and democracy from certain quarters, India has continued to adhere to the clause of non interference in its internal affairs. It seems to believe that whatever changes take place, should be from within and not from outside.

In the past Bhutan had fears that following Sikkim’s incorporation into India, it too would be affected. 13 But India assured it that its territorial integrity would be respected. Bhutan also feared that like in Sikkim where the minorities were overtaken by the Nepali population, in Bhutan too the Nepalese would overtake the locals. Bhutan’s problems at present revolve around the concept of “Greater Nepal.” To this is linked the problem of refugees from southern Bhutan who are of Nepalese origin. 14 There are a large number of Nepalese in India and the movement for Gorkhaland and the consequent autonomous council have made Bhutan concerned about its people of Nepalese origin and their intentions. India’s official position of non-interference has ensured Bhutan a free hand to deal with its centrifugal tendencies in a manner as it feels is right.

International Relations: Coming out of Isolation

Bhutan has followed a policy of isolation from the beginning—it did not trust the British too. Following the threat from China, it was the aim of the British that Bhutan should come out of its isolation. It was slightly successful but the consequent World War II and later the British withdrawal in 1947 sent it into isolation again. To begin with, Bhutan was suspicious of independent India’s intentions after the Chinese occupation of Tibet in 1950. However, following the Chinese action of 1958-59 it slowly realised that it needed to come out of isolation for its own survival. During this time when its territorial integrity was in danger, India ensured it security though there was no provision in the treaty of 1949 for the defence of Bhutan by India. 15 Since then, Bhutan has tried to assert its sovereign existence at every forum. India has made it clear that Bhutan’s quest for an international role does not contradict with the provision of Article 2 of the 1949 Treaty. 16 Its international journey began with becoming a member of the Colombo Plan in 1963. Bhutan’s membership of the Colombo Plan was sponsored by India. Bhutan said that its admission to the Colombo Plan had considerable bearing on its sovereign and modern status and registered its first entry into a regional group of sovereign states. As a result of its membership, Bhutan received technical assistance from Japan, Australia, India, Canada , New Zealand and England. Later, in 1969, Bhutan’s entry into the Universal Postal Union was sponsored by India. In 1971, Bhutan was admitted to the United Nations with the full assistance of India. In 1972 Bhutan became a member of Economic and Social Council for Asia and Pacific (ESCAP). 17 The process thus continued and in 1985, Bhutan became a member of the South Asian Association for Regional Cooperation (SAARC), providing it another forum to expand and conduct its foreign relations and this time more effectively since SAARC is a grouping of only seven countries.

After Bhutan became a member of the UN, it was opined by many that India had renounced its right to look after Bhutan’s foreign relations which it had been enjoined to do under the Treaty of 1949. Surely India would have been aware that an independent international role and strict implementation of the 1949 Treaty would be contradictory. However, an independent Bhutan recognised by the international community ensured that its territorial integrity could not be easily violated and that Bhutan remained a buffer state. Further, in the changing regional and international context had India not taken into consideration the aspirations of Bhutan, some other country would have. Such a move would have been detrimental to India’s long term interests. Presently, Bhutan has diplomatic and non diplomatic relations with many countries.

Bhutan’s Economic Concerns and India

Bhutan is not only a landlocked country but also extremely backward. Having decided to come out of isolationism, India helped it by completely financing the first two five- year plans. Presently, the Indian government is involved in many projects, which include hydropower plants, cement plants, roads, etc. 40 per cent of the external revenue that Bhutan gets is presently from the sale of electricity to India. In this sense, Bhutan has benefited immensely from assistance by India. Most important, of the total aid given by India to other developing countries in 1996-97, the share of Bhutan was 52 per cent, which amounts to Rs. 181 crore. There is a free trade regime between India and Bhutan not requiring even customs posts on the Indian side of the border. Being a landlocked country, India provides it with about 13 transit routes. 18 Presently, Bhutan is very keen on sub-regional cooperation through the growth quadrangle which encompasses Bangladesh, Nepal and the north eastern parts of India. It is emphasising on the economic content in its relations with the SAARC member countries.

The China Factor

The China factor has been very important in defining the nature of relationship between India and Bhutan. In fact, it is this which gives Bhutan the geostrategic importance with respect to Indian interests. It is interesting to note that to begin with, the British were primarily interested in Bhutan for facilitating a trade route to access Tibet, that is to say, the aims were purely economic in nature. It was only later when China started laying claims to the territory of Bhutan that the clause enabling British India to guide the foreign relations of Bhutan was incorporated in the Treaty of 1910. Later, independent India too included this clause in the Treaty of 1949. The Chinese occupation of Tibet and later the uprisings in Tibet following the Chinese action there, made Bhutan think seriously about coming out of its isolationist policy. This later led to the close involvement of India in Bhutan’s economic development. In 1958, China had not only claimed Indian territory, its maps also showed 200 sq miles of Bhutanese territory as part of Tibet. It was at this defining moment that Nehru said in the Parliament that any attack on Bhutan would be considered an attack on India. 19 Later, India’s defeat against China in the 1962 War, made Bhutan skeptical about the capability of India to look after its defence. But confidence was restored following the Indian victory in 1971. The process of normalisation of relations between India and China, made it possible for Bhutan to have direct bilateral talks with China on the boundary question, thus, providing Bhutan an extra space to conduct its foreign policy.

It is seen that the attitude of China towards Tibet has played a major role in shaping Bhutan’s attitude towards India. Bhutan has many historical links with Tibet. 20 The experience of the Tibetan refugees has made it apprehensive of developing close ties with China. In fact, the desire of Bhutan to gain recognition in the international arena has a lot to do with the attitude of China. The fear that Bhutan will go into China’s fold seems unlikely with regard to the current state of beneficial relations Bhutan has with India and its past experience with China. Bhutan’s experience with China has not been all smooth sailing and, in fact Bhutan itself follows a restrictive policy with regard to its interaction with China. The then Foreign Minister Tsering said in an interview that Bhutan had “correct relations” with Beijing. He added that there was not much trade or economic interaction. Bhutan was conducting negotiations with China on the 500-km-long border and the area under dispute was small, according to the minister. 21


India’s Interests

Bhutan has immense security imperatives for India. 22 A stable, independent Bhutan is essential for it to be an effective buffer state. India does not have any imperial or colonial agenda while dealing with Bhutan. 23 Prime Minister Nehru said in 1958 in the most categorical terms that though Bhutan is a small country, it should remain independent in choosing its own way of life. This policy enunciated by Nehru was continued by the succeeding governments in India, which has played an active role in Bhutan getting the international recognition that it deserves. While initially the economic aid given by India can be said to have been influenced by security concerns in enabling Bhutan to have the essential infrastructure, in later years this has not been so. It presently follows a policy of mutual benefit from the projects which are being undertaken in Bhutan. The market for these projects will be India and in this manner it also ensures the development of the north-east part of India. While Bhutan is a small country and its wants are limited, with time they are sure to grow. Any amount of Indian aid would then not be able to meet the required needs. However, through the approach being presently followed, India ensures the sustainable development of Bhutan. The 336MW Chukha Hydel project ensures power supply to parts of West Bengal and Assam. This one project provides nearly 40 per cent of Bhutan’s national revenue. The 1020MW Tala project is under way and once it is commissioned, the revenue Bhutan can earn will be substantial. On the Indian side, with such projects the power shortage problem will be partially resolved.

The goodwill India is able to generate through its activities are likely to ensure that whatever changes might come in the future in the political structures in Bhutan, the attitude towards it will not change. Bhutan will see it in its own interest to be friendly with India for it is beneficial to it economically and in the international arena.

India’s major concerns with Bhutan presently are those relating to the disturbed situation in the north-east. It is reported that insurgents have established camps in the border areas of Bhutan, and without Bhutan’s help, it will not be possible to combat the insurgency. India and Bhutan have concluded an extradition agreement in 1996. 24 Though the 1949 Treaty mentions extradition, the present agreement is aimed at simplifying the procedure and making it more effective to deal with cross border terrorism and organised crime. Bhutan is not in any way assisting these insurgents, but its police forces are limited to meet such contingencies. Important questions thus arise about implementation of the extradition treaty. India is spending crores of rupees on combating insurgency in the North East. By setting camps in Bhutan, these insurgents are able to escape from the Indian authorities. In days to come the problem may assume serious dimensions. There is also the danger that if Bhutan were to take stern action against them, then the militants would disturb the peace and harmony there. There are as yet no confirmed reports that the two governments have taken a joint action or conducted joint raids against the hideouts of these insurgents, but both are closely cooperating and this issue remains on the top of the agenda.


Looking Ahead: Possible Future Scenarios

In the light of the above analysis, some of the possible future scenarios need to be considered so that appropriate policies may be formulated by India.

In a first scenario, it is possible that the present cordial relations continue and eventhough Bhutan expands its interactions with the external world it remains equally sensitive to India’s security concerns and to that extent, follows a restrictive policy. However, in the light of recent developments (the challenge arising out of camps set up in Bhutan by insurgents from north eastern parts of India as has already been discussed in the previous section), it is possible that non state actors, either from India or Bhutan or any third country, can establish camps in Bhutan given the geophysical terrain. With the access they have to modern arms and equipment, it is probable that they could undertake activities which might pose a grave danger to India’s security.

In another possibility, it could be that with the spread of education and economic development, democratic changes take place in Bhutan whereby people become assertive of their rights and of the place of their country in the international arena. Though they presently acknowledge India’s contribution to Bhutan in the economic and other spheres, it is possible that they might develop close friendly relations with China or other countries which may have implications for India’s security.

Irrespective of which of the above scenario emerges in the future, there are two measures, which are necessary for India to take. First, it should deepen the close economic cooperation already taking place and linking the development of north east India and Bhutan. Secondly, it should arrive at an understanding with Bhutan that while Bhutan conducts its foreign relations, it should not impinge on India’s security interests. This would remove the ambiguity, which presently marks the relations between the two countries with reference to Article 2 of the Treaty of 1949 and equip India to face the future challenges.



Proximity links both India and Bhutan as it does two neighbouring countries anywhere in the world. However the geo-strategic position of Bhutan has transformed the relation into one of vital importance to both the countries. There is no doubt that the security imperatives are at the core of the close relationship, not only for India but Bhutan too in terms of its security interests and territorial integrity.

India being the big power, had two choices: it could either have thrust its security concerns on Bhutan by force or it could have worked towards making Bhutan understand and appreciate India’s security concerns and how its own (i.e. Bhutan’s) security too is linked with India. India chose the second route. It, however, did not allow the relationship to be limited to a single point security agenda. It first expanded it to include the economic agenda and secondly, helped Bhutan find its rightful place in the international comity of nations. The relationship has its share of tensions revolving around Article 2 of the Treaty of 1949. It has been interpreted by some, including those in Bhutan, as limiting the sovereignty of Bhutan.

With time this criticism has, however, come down seeing the manner in which the treaty has been implemented. India wholeheartedly assisted Bhutan in getting membership of the UNO. Bhutan itself follows a restrictive policy as regards its relations with China and has come to appreciate the immense benefits of close ties with India. The above analysis has shown that Indo-Bhutan relations have not been static and have served the mutual interests of both countries. One can thus make the following observations:

l The clauses in the 1949 Treaty do not reflect India’s desire to dominate Bhutan but the concerns of India relate to the security not only of itself but of Bhutan too. India has not stuck to the strict implementation of the clauses and in practice there is a lot of flexibility.

l Bhutan has gained immensely from the special relations it has had with India in all aspects of its development as a nation. It has grown in international stature and its sovereignty is fully recognised. Economically, India has helped in its all round development. Further, India has adhered to the clause that it will not interfere in the internal affairs of Bhutan.

l While security concerns dominate the relationship, it is important to note that presently the security concerns facing the two countries emanate from activities within their borders and not due to the activities of a third country. The insurgents in India taking refuge in Bhutan and their possible linkages with the dissidents in Bhutan is a matter of great concern to both the countries.

l The incorporation of a free trade regime in the Treaty of 1949 was not prompted by the Indian desire to ensure compliance of its security concerns by Bhutan. In fact, it was a continuation of the arrangements that existed during the British period

It is necessary to project the immense benefits which Bhutan has had from its association with India. Generally, India has to bear the brunt of being termed hegemonic and accused of reducing the freedom of, and interfering in, the other country’s activities. It is necessary that the record be set straight. Historical circumstances guided the development of Indo-Bhutan relationship along unique lines. Geographically juxtaposed into a close proximity, the two countries have sought and obtained what they have needed from one another.



Treaty Between India and Bhutan, 1949

The Government of India on the one part, and His Highness the Druk Gyalpo’s Government on the other part, equally animated by the desire to regulate in a friendly manner and upon a solid and durable basis the state of affairs caused by the termination of the British Government’s authority in India, and to promote and foster the relations of friendship and neighbourliness so necessary for the well-being of their peoples, have resolved to conclude the following Treaty, and have for this purpose, named their representatives, that is to say Sri Harishwar Dayal representing the Government of India, who has full powers to agree to the said Treaty on behalf of the Government of India, and Deb Zimpon Sonam Tobgye Dorji, Yang-Lop Sonam, Chho-Zim Thondup, Rin-Zim Tandin and Ha Drung Jigmie, Palden Dorji, representating the Government of His Highness the Druk Gyalpo, Maharaja of Bhutan, who have full powers to agree to the same on behalf of the Government of Bhutan.

Article 1:   There shall be perpetual peace and friendship between the Government of India and the Government of Bhutan.
Article 2:   The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part the Government of Bhutan agrees to be guided by the advice of the Government of India in regard to its external relations.
Article 3:   In place of the compensation granted to the Government of Bhutan under Article 4 of the Treaty of Sinchula and enhanced by the Treaty of the eighth day of January, 1910 and the temporary subsidy of Rupees one lakh per annum granted in 1942, the Government of India agrees to make an annual payment of Rupees five Lakhs to the Government of Bhutan. And it is further hereby agreed that the said annual payment shall be made on the tenth day of January every year, the first payment being made on the tenth of January, 1950. This payment shall continue so long as this Treaty remains in force and its terms are duly observed.
Article 4:   Further to mark the frienship existing and continuing between the said Governments, the Government of India shall, within one year from the date of signature of this treaty return to the Government of Bhutan about thirty-two square miles of territory in the area known as Dewangiri. The Government of India shall appoint a competent officer or officers to mark out the area so returned to the Government of Bhutan.
Article 5:   There shall, heretofore, be free trade and commerce between the territories of the Government of India and of the Government of Bhutan; and the Government of India agrees to grant the Government of Bhutan every facility for the carriage, by land and water, of its produce throughout the territory of the Government of India, including the right to use such forest roads as may be specified by mutual agreement from time to time.
Article 6:   The Government of India agrees that the Government of Bhutan shall be free to import with the assistance and approval of the Government of India, from or through India into Bhutan, whaever arms, ammunition, machinery, warlike material or stores may be required or desired for the strength and welfare of Bhutan, and that this arrangement shall hold good for all time as long as the Government of India is satisfied that the intentions of the Government of Bhutan are friendly and that there is no danger to India from such importations. The Government of Bhutan, on the other hand, agrees that there shall be no export of such arms, ammunition, etc., across the frontier of Bhutan either by the Government of Bhutan or by private individuals.
Article 7:   The Government of India and the Government of Bhutan agree that Bhutanese subjects residing in Indian territories shall have equal justice with Indian subjects, and that Indian subjects residing in Bhutan shall have equal justice with the subjects of the Government of Bhutan.
Article 8:  
  1. The Government of India shall, on demand being duly made in writing by the Government of Bhutan, take proceedings in accordance with the provisions of the Indian Extradition Act, 1903 (of which a copy shall be furnished to the Government of Bhutan), for the surrender of all Bhutanese subjects accused of any of the crimes specified in the first schedule of the said Act who may take refuge in Indian territory.
  2. The Government of Bhutan shall, on requisition being duly made by the Government of India, or by any officer authorised by the Government of India in this behalf, surrender any Indian subjects, or subjects of a foreign Power, whose extradition may be required in pursuance of any agreement or arrangements made by the Government of India with the said Power, accused of any of the crimes, specified in the First Schedule of Act XV of 1903, who may take refuge in the territory under the jurisdiction of the Government of Bhutan, and also any Bhutanese subjects who, after committing any of the crimes referred to in Indian territory, shall flee into Bhutan, on such evidence of either guilt being produced as shall satisfy the local court of the district in which the offence may have been committed.

Article 9:   Any differences and disputes arising in the application or interpretation of this Treaty shall in first instance be settled by negotiation. If within three months of the start of negotiations no settlement is arrived at, then the matter shall be referred to the Arbitration of three arbitrators, who shall be nationals of either India or Bhutan, chosen in the following manner:
  1. One person nominated by the Government of India;
  2. One person nominated by the Government of Bhutan;
  3. A Judge of the Federal Court, or of a High Court in India, to be chosen by the Government of Bhutan, who shall be Chairman.
The judgement of this Tribunal shall be final and executed without delay by either party.
Article 10:   This treaty shall continue in force in perpetuity unless terminated or modified by mutual consent.

Done in duplicate at Darjeeling this eighth day of August, one thousand nine hundred and forty-nine, corresponding with the Bhutanese date the fifteenth day of the sixth month of the Earth-Bull year.


Political Officer in Sikkim TOBGYE DORJI






(Source: Verinder Grover ed., Encyclopedia of SAARC Nations, Bhutan, vol. 6, New Delhi: Deep & Deep Publications 1997)



*: Associate Fellow, The Institute for Defence Studies and Analyses.  Back.

Note 1: The Treaty between India and Bhutan, 1949, in Verinder Grover, ed., Encyclopedia of SAARC Nations-Bhutan, vol. 6, (New Delhi: Deep and Deep Publications, 1997).

Note 2: The Treaty of Sinchula, 1865, in Ibid.  Back.

Note 3: The Treaty of Punakha, 1910, in Ibid.

Note 4: For more details on the China factor, prompting the British to revise the Treaty of Sinchula, refer to the chapter, “India, China and Bhutan: 1908-1910,” in Kapileshwar Lab, India and Bhutan, (New Delhi: Sindhu Publications Ltd., 1974).  Back.

Note 5: One of the very first mission was the Boogle Mission which left for Bhutan on May 1774. For details on the aims of the mission which included, “To open a mutual and equal trade communication between inhabitants of Bhutan and report about the condition of the roads between the borders of Bengal and Tibet and between Lhasa and the neighbouring countries,” and its suggestions regarding future British attitude towards Bhutan refer Ibid., pp. 18-20.  Back.

Note 6: For details on the factors leading to the conclusion of the 1865 Treaty refer Ibid., pp. 74-100.  Back.

Note 7: Manorama Kohli, From Dependency to Interdependence A Study of Indo Bhutan Relations, (Vikas Publishing House Limited, 1993), pp. 80-81.  Back.

Note 8: Ravi Verma, India’s Role in the Emergence of Contemporary Bhutan, (Delhi: Capital Publishing House, 1988), p. 225.  Back.

Note 9: Ibid., pp. 225-230.  Back.

Note 10: Refer Smruti S. Pattanaik, “Nepal-Bhutan Bilateral Talks and Repatriation of Bhutanese Refugees” Strategic Analysis, January 1998, vol. xxii, no. 10, pp. 1607-1624.  Back.

Note 11: For details on the controversy regarding the word guidance, refer Ibid., p. 184. For example, when Bhutan expressed the desire to establish foreign relations, Nehru had advised the King against it for it would draw Bhutan into the vortex of power politics. The issue of guidance was debated was debated in the National Assembly of Bhutan. The Bhutanese Parliament took the view that while Bhutan was obliged to agree to Nehru’s advice against estabilishing direct relations with foreign powers, it had a right in theory at least to estabilish relations with other countries even while conducting its foreign relations with Indian guidance. It is interesting to, note that Prime Minister Dorji in reply to a question in 1960, told the National Assembly, “We do not consider ourselves to be the protectorate of India. We consider ourselves independent . But we are not 100 per cent independent because of the 1949 Treaty”. This can be contrasted with the view presently held by the King where he has said that the two countries have a model relationship.  Back.

Note 12: For details, refer n. 4, pp. 149-165.  Back.

Note 13: For some views on Bhutan’s fears refer, “Delhi Test for Bhutan’s Monarch,” Times, December 20, 1974; “Ties With Bhutan,” Statesman, December 20, 1974; “India and Bhutan,” National Herald, December 23, 1974.  Back.

Note 14: Mohan Ram, “Greater Sikkim?” The Pioneer, June 19, 1993.  Back.

Note 15: Refer n. 4, p. 212-213. Nehru declared in the Lok Sabha on August 28, 1959, “The government is responsible for the protection of the borders of Sikkim and Bhutan and of the territorial integrity of these two states and any aggression against Bhutan and Sikkim will be considered as aggression against India.”  Back.

Note 16: Ibid., p. 224.  Back.

Note 17: n. 9, pp. 207-223.  Back.

Note 18: Refer Minstry of External Affairs, Annual Report, 1997-98. Also refer, “Rao’s Bhutan Visit,” The Hindustan Times, August 19, 1993. Also refer n. 9, pp. 60-133 for details on the five year plans of Bhutan and India’s contribution to them.  Back.

Note 19: n. 4, p. 212.  Back.

Note 20: For details on Bhutan’s historical links with Tibet refer, n. 4 and n. 9.  Back.

Note 21: “Setting a New Pace in Indo Bhutan Ties,” The Tribune, March 11, 1996.  Back.

Note 22: Also refer Ravi Verma n. 9, where the author spells out the position of Bhutan in India’s defence strategy. The Chumbi Valley in Tibet, where China has massive troops concentration is adjacent to the north west of Bhutan. A mere 80 mile march southward from the Chumbi valley accross the north west borders of Bhutan would enable the enemy to cut off not only the Bhutanese kingdom but also the northern strip of West Bengal, Assam and the north east of India. Further Bhutan’s northern border is also equally weak. On that side the high mountain wall is broken at five points. The enemy can swoop down upon Central Bhutan through those points even in the bitterest winter. The greatest logistic advantage this position gives to the Chinese is that they will have only to descent from the northern heights to the valleys of Bhutan, while the defenders will have to struggle their way from the plain up the rising ranges to meet the invaders.  Back.

Note 23: Refer n. 9, p. 182. Nehru at a public meeting said, “ Some may think that since India is a great powerful country and Bhutan a small one, the former might wish to exercise pressure on Bhutan. It is, therefore, essential that I make it clear to you that our only wish is that you should remain an independent country , choosing your own way of life and taking the path of progress according to your own will. At the same time we two should live with mutual goodwill. We are members of the same Himalayan Family and should live as friendly neighbours helping each other. Freedom of both Bhutan and India should be safeguarded so that, none from outside can harm it.”  Back.

Note 24: K.P. Nayar, “Indo-Bhutan Talks on Extradition Treaty,” Indian Express, March 7, 1996; Also refer M.K. Dhar, “Indo-Bhutan Talks to Cover Cross Border Terrorism,” The Hindustan Times, March 7, 1996. Accrding to a newspaper report which appeared in Bangladesh Observer, January 3, 1998, India and Bhutan have launced an unprecedented joint military offensive against Indian militants who have estabilished camps in southeast of Bhutan. According to the report this followed an attack by the militants on a Bhutanese army convoy.  Back.