Recent Developments
5th India-Bhutan Development Cooperation Talks Co-Chaired by Foreign Secretaries
Foreign Secretary Shri Vikram Misri and Foreign Secretary of Bhutan Dasho Pema Lektup Dorji co-chaired the 5th India-Bhutan Development Cooperation Talks on Bhutan's 13th Five Year Plan today. The meeting reviewed progress and implementation of India-supported projects in diverse fields of development. Bhutan appreciated India's significant support and its contribution to Bhutan's development.
The two Foreign Secretaries virtually inaugurated the Thimphu Ecological Park and Olakha Park constructed under the PTA project "Green Infrastructure and Open Spaces in Thimphu."
Agreement for concessional line of credit of INR/Nu. 40 billion (4000 crores) signed between EXIM Bank of India and Finance Ministry of Bhutan, and MoU for cooperation on health education and research signed between AIIMS India and Khesar Gyalpo University of Medical Sciences, Bhutan (KGUMSB) were exchanged. 45 EV cars were also handed over to the Royal Government of Bhutan on the occasion.
India and Bhutan hold 7th Joint Group of Customs (JGC) meeting in Munnar, Kerala
The 7th Joint Group of Customs (JGC) Meeting between India and Bhutan was held on 20th–21st April 2026 in Munnar, Kerala. The meeting was co-chaired by Mr. Yogendra Garg, Special Secretary and Member (Customs), Central Board of Indirect Taxes and Customs (CBIC), Government of India, and Mr. Sonam Jamtsho, Director General, Department of Revenue and Customs, Ministry of Finance, Royal Government of Bhutan.
India and Bhutan share close and longstanding trade relations, with India being Bhutan's largest trading partner, accounting for nearly 80% of Bhutan's total trade. Bilateral trade between the two countries exceeded $1.9 billion in FY 2024–25, registering a growth of over 46% compared to the previous financial year.
During the meeting, both sides held detailed discussions on a range of priority areas, including Coordinated Border Management (CBM); Memorandum of Understanding (MoU) on pre-arrival exchange of customs data; strengthening of anti-smuggling mechanisms through intelligence sharing and enforcement cooperation; digitization of customs processes; and facilitation of transit cargo movement under the Electronic Cargo Tracking System (ECTS).
Union Minister Shri Manohar Lal Visits Punatsangchhu Hydropower Projects; Participates in Key Milestone Ceremony
The Union Minister of Power and Housing & Urban Affairs, Shri Manohar Lal, on the second day of his visit to Bhutan, visited to the Punatsangchhu-I and Punatsangchhu-II Hydropower Project sites.
At the Punatsangchhu-I project site, the Union Minister attended the ceremony for pour of concrete of the dam, marking a significant milestone in the development of the project. The project, the largest joint hydropower venture between the two countries, is expected to enhance Bhutan's hydropower capacity substantially upon completion.
Shri Manohar Lal then visited the Punatsangchhu-II project, which was jointly inaugurated on 11 November 2025 by Shri Narendra Modi, the Prime Minister of India, and His Majesty Jigme Khesar Namgyel Wangchuck, has since emerged as a significant contributor to Bhutan's energy sector.
Bhutan-India Trade Relations
The Government of India has been associated with Bhutan's planned development since the start of planned development when the first five-year plan was launched in 1961 and continues to be our main development partner. The mutually beneficial economic ties have been the centrepiece of the Bhutan-India relations. Currently, India is not only Bhutan's main development partner, but also its leading trade partner.
There has been a free trade and commerce between the territories of India and Bhutan since the signing of the Treaty between the Government of India (GoI) and the Royal Government of Bhutan (RGoB) in 1949. However, the first formal Agreement on Trade and Commerce between GoI and RGoB was signed in 1972 which has undergone five revisions till date (1983, 1990, 1995, 2006 and 2016). The current Agreement on Trade, Commerce and Transit between the Royal Government of Bhutan and the Government of the Republic of India is valid till 2026.
The objective of the Free Trade Agreement (FTA) is to further strengthen the age-old ties and enhance bilateral trade and economic cooperation for mutual benefit and development of the two countries.