Doklam, GST to dominate India-Bhutan talks

India and Bhutan will have a plethora of issues to discuss ranging from the Doklam standoff and Chinese influence in the region to export of electricity when Prime Minister Narendra Modi meets the Bhutanese King Jigme Khesar Namgyel Wangchuck here on Wednesday.

The Bhutanese King’s visit assumes importance especially as it comes soon after India’s bitter military stand-off with Chinese forces that took place in the Doklam plateau region in Bhutan, which is close to the India-China-Bhutan tri-junction.

While India will be keen to understand whether the Doklam incident has created an impact in the ‘special’ relationship that the country enjoys with the Himalayan Kingdom, the Bhutanese King will be focussing more on Indian economic policies that impact ordinary people there, according to sources.

During his four-day visit, Bhutan’s King will also be meeting Finance Minister Arun Jaitley and Defence Minister Nirmala Sitharaman.

“The elephant in the room is definitely going to be China when the King meets the Prime Minister. Both sides need to have serious discussions on how to counter China and its President Xi Jinping’s increasingly expansionist policies that have a bearing on all countries in Asia,” a top official told BusinessLine.

It may be noted that Bhutan’s King is visiting India days after Chinese President Xi got a second five-year term as the General Secretary of the Communist Party. Hence, it will be all the more crucial for the government to understand Bhutan’s strategy of dealing with China.

“There is also an American angle to it that should not be overlooked. The US has made it quite clear that it is looking at Bhutan with strategic interest, even as it partners with India to counter China,” said Rajiv Bhatia, former Indian Ambassador to Myanmar, now Distinguished Fellow at Gateway House, a Mumbai-based foreign policy think-tank.

On the other side, economic issues are set to dominate the King’s agenda when he meets the Indian political leadership.

Apart from demonetisation that had hit Bhutan hard as they do a lot of business transactions in Indian rupee, the Himalayan Kingdom is also concerned over the implication of the Goods and Services Tax (GST) on India-Bhutan trade. In addition, Bhutan has also been seeking India’s permission to export electricity to other countries through India, sources said.

Earlier this year, Bhutan had walked away from the India-led connectivity initiative Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles pact.

“Bhutan is more concerned with some of the economic decisions being taken by India, such as demonetisation and GST. This is affecting the common man in Bhutan. They want to sell electricity, which India is not allowing. They also want the SAARC to resume,” said Phunchok Stobdan, a former diplomat.