Balancing Act

Bhutan, despite its considerable economic links to India through trade, is taking cautious steps towards democratic consolidation and mild globalization.

By Gulnaz Nawaz | January 2023

Despite China’s proximity to its northern border, Bhutan has maintained an apolitical stance toward the country for many decades. It also has closer ties with India, whose states border it to the west, east, and south. However, several events over the last two decades have prompted Bhutan to finally settle its boundary disputes with China and open up to its neighbor. In addition to geopolitical changes like China›s economic and military expansion, these factors include generational shifts and internet exposure. The country›s economy and its government›s transition from absolute monarchy to democracy played an important role.

Bhutan›s history is replete with instances when it was stuck between the two colonial powers that were at odds with each other. It has become a politically stable country despite having to deal with a dangerous political landscape. But Bhutan is facing new problems because of rising political tensions around the world, which affect its international trade and the way global economies are linked. China and India still trade a lot with each other, even though they have political differences. This puts Bhutan “asymmetrically between” two huge and resource-hungry neighbours. Bhutan has always been close to India. This is because of how the British ruled the area when it was a colony. Because of problems with both India and China, Bhutan can›t enjoy the benefits of being so close to both of them. When looking at Bhutan›s international relations, economic reasons, bilateral ties with India, and threats from China are often the first things that come to mind. But this approach put too much emphasis on how similar China and India›s positions were and not enough on Bhutan›s diplomatic efforts.

There is a long and strong history of “friendship” between Bhutan and India, which plays an important role in Bhutan›s diplomatic relations with India. The country has deliberately chosen to have cordial ties with its neighbours. Hydropower, counterinsurgency coordination, physical connectivity, and commemorations of past encounters between the leaders of the two countries are all ways in which Bhutan and India are linked. During a review of the Friendship Treaty in 2007, a clause from the colonial era that said the two countries had to ask India for advice was taken out. This was a big step forward in recognizing Bhutan›s right to manage its international affairs on its own terms.

In China and Bhutan›s relationship, Bhutan has said that it will abide by the “One China” policy and has refrained from taking any measures that may upset China. Bhutanese diplomacy, as shown by the 2017 Doklam conflict, gives silence a lot of weight as a way to ease tensions. Bhutan has been able to keep good relations with both of its neighbours by avoiding controversial public announcements that stir up nationalist feelings and divide politics at home. Bhutan often talks about its role as a provider of network security in a region where tensions could otherwise flare up quickly.

Bhutan has had noteworthy political upheavals in the twenty-first century. After general elections, there have been three different political parties in power, and there is disagreement about whether India or China has more power in Bhutan. Also, the treaty the kingdom had with India was changed to get rid of a clause that would have made it hard for the kingdom to talk to other countries. India sees the disputed territory as important to its national security, and Bhutan still can›t have full diplomatic relations with China or solve the border problem without resolving the issue.

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