India has agreed to increase its support to Bhutan in its upcoming 13th Five Year Plan and will also extend an additional standby credit facility over and above the two existing ones, Foreign Secretary Vinay Kwatra has said.

In a bilateral meeting between visiting Bhutan King Jigme Khesar Namgyel Wangchuk and Prime Minister Narendra Modi on Monday, the two also discussed about shaping sustainable arrangements for export of agricultural commodities from Bhutan and for a short supply of critical commodities, such as petroleum, fertilisers and coal, to the country. 

“We are also examining and considering setting up the first integrated check post (ICP) along India-Bhutan border, which would be somewhere near Jaigaon. The exact specific location of the ICP is yet to be determined, but the broad location point is known,” Kwatra said at a press briefing on the bilateral meeting between Wangchuk and Modi.

Key areas

The two leaders touched upon a number of issues relating to trade, connectivity and investment cooperation. This included discussions on infrastructure connectivity pertaining to integrated check post, rail connectivity, air connectivity, digital connectivity, people-to-people linkages and  inland waterways, Kwatra said.

For the 12th Five Year Plan, India’s contribution of ₹4,500 crore constituted 73 per cent of Bhutan’s total external grant component, per a government note.

The key areas of focus of India’s assistance included agriculture and irrigation development, ICT, health, industrial development, road transport, energy, civil aviation, urban development, human resource development, capacity building, scholarship, education and culture.

“The specifics of the support (for Bhutan’s 13th FYP), its distribution into different projects, is something which is to be worked out between the two systems going forward,” Kwatra said.

Regional connectivity

India will also try and expedite the proposed `Kokrajhar-Gelephu’ rail link project, being built with its help, in consultation with the Bhutanese side. “This in some ways will be historic because this would be the first ever rail link between India and Bhutan. Naturally it links up well to the rest of the regional connectivity infrastructure in South Asia,” the Secretary said.

Read more: PFC-REC to extend ₹4,058-crore loan to Bhutan hydro project 

In the field of hydro-power, the two have agreed to an upward revision of tariff of the Chhukha hydro-electric project. India will positively consider Bhutan’s request to sell power from its hydro-power project, known as Basochhu hydro-electric project, which could perhaps be done through the energy exchange mechanism of the market, he added.

Also read: India’s waterways to facilitate cheaper transport for Bhutan-Bangladesh trade 

India would extend favourable consideration to Bhutan’s request regarding power trade and access to financing for new and upcoming hydropower projects.