All of India’s neighbours, except Bhutan, have joined Chinese President Xi Jinping’s dream Belt and Road Initiative (BRI), even though China is constantly luring the Himalayan Kingdom to become part of this ambitious plan. China’s vice foreign minister visited Bhutan after the Doklam standoff in 2017 and, after narrating the advantages of BRI, urged Bhutan to join it.
China and Bhutan share 470 km of unfenced, contiguous borders but do not have official diplomatic relations. Both countries have territorial disputes and have had about 25 meetings to resolve their border issues. In 1959, after the Tibetan rebellion, about 6000 Tibetans took refuge in Bhutan, enraging Beijing. The Chinese map of 1961 claimed Bhutanese territories and there were regular intrusions by Chinese soldiers. The four major areas of dispute between Bhutan and China include Doklam, Gamochen to Batangla, Singhela and Amo Chhu.
The Bhutanese feel that China is an expansionist country which wants to annex Bhutan; hence India and Bhutan signed the Treaty of Perpetual Peace and Friendship in 1949, which was later replaced by a Treaty of Friendship in 2007. In 1971, India sponsored Bhutan’s membership in the United Nations. Analysts claim that Bhutan rejected China’s offer to relinquish its claim on Jakarlung and Pasamlung areas in lieu of Doklam under Indian pressure. Hydropower is another irritant: Bhutan exports 70 per cent power to India, forming about 20 per cent of Bhutan’s gross domestic product (GDP).
Although bilateral trade between India and Bhutan is $516 million, much more than with China, with which Bhutan’s trade is just $10 million, Bhutan’s trade deficit with India is of $150 million. India accounts for 90 per cent of Bhutan’s exports and 79 per cent of its imports. India financed Bhutan’s hydropower sector, which generates 27 percent of its revenue. India is Bhutan’s principal aid donor and its five-year economic plans have been largely financed by India.
India assisted Bhutan during the Doklam military crisis. The Border Roads Organisation has created a network of roads in Bhutan under Project Dantak.
But the number of Chinese tourists in Bhutan is swelling and they are now only second to Indian visitors. China is also exporting cement, machinery, electrical appliances, toys and so on and has emerged as the third biggest exporter to the tiny Himalayan nation. China has also enhanced religious, cultural and sports ties and is also offering numerous scholarships to Bhutanese students.
India should impress upon Bhutan that the BRI, a key pillar of Chinese foreign policy, is a debt trap under which it builds large infrastructure projects in smaller countries which have to give contracts to Chinese firms at inflated rates. All men and material used in these projects are Chinese and the countries have to take exploitative loans from China. When these countries fail to repay their debt, the Chinese occupy these projects. Sri Lanka lost Hambantota port, Malaysia cancelled several BRI projects, while Maldives is analysing the feasibility of these projects and is likely to cancel a few.
Islamabad, which is passing through a deep economic crisis cannot annoy China, as it has promised about $60 billion in investments in Pakistan. However, it appears that China intends to exploit the mineral resources of Balochistan and arable land of Gilgit and Baltistan.
China, with deep pockets, is trying to woo Bhutan and wants to start a diplomatic mission there, but India understands that these moves have strategic implications and will weaken India’s influence. The Chumbi Valley is an important tri-junction between India, China and Bhutan as it is just 500 km from the Siliguri corridor which connects India with its northeastern states.
Bhutan alleges that India created a fuel crisis in 2013, by slashing subsidies on kerosene and cooking gas when Bhutan was strengthening its relations with China. Youth unemployment is touching 10.6 percent; hence it wants to develop economy at a faster pace. The foreign debt, which was 108.6 percent of GDP in 2017, is increasing rapidly.
Several pro-Chinese elements in Bhutan criticise Delhi and allege that India’s attitude is hegemonistic. Bhutanese businessmen want Chinese investments so that the country can achieve faster economic progress. The younger generation also alleges that India is exploiting Bhutan’s hydropower and purchasing electricity at a low rate. They also want to chart an independent foreign policy as they say India is undermining Bhutanese sovereignty. Now Bhutan wants to settle its territorial disputes with China and establish diplomatic relations with Beijing.
India should be careful as Chinese influence will enhance manifold if diplomatic and economic ties are established between China and Bhutan. Beijing, which considers Delhi as its strategic adversary, that seemingly wants to encircle India, has already established close relations with India’s neighbours and will try to win over Thimphu also. If Bhutan joins BRI and falls into a debt trap, China will try to grab strategically important areas from Bhutan, Hence India should be vigilant.
(The author is a New Delhi-based strategic analyst. He can be contacted at firstname.lastname@example.org)