Geopolitical Resilience
The convergence of Bhutan’s strategic priorities with India’s evolving geopolitical ambitions presents a complex, yet potentially stabilizing, dynamic within the Indo-Pacific region. Understanding the nuances of this relationship—rooted in historical alliances, economic interdependence, and increasingly, technological alignment—is critical for assessing the future of regional security and the broader implications of a multipolar world. The stakes are considerable, influencing not only bilateral relations but also the delicate balance of power along India’s western frontier and shaping the trajectory of development across the Himalayas.
The relationship between India and Bhutan, often described as “special,” predates India’s independence in 1947. Established through the 1914 Treaty of Friendship, a cornerstone of Bhutan’s sovereignty, the agreement cemented a commitment to non-interference in each other’s internal affairs—a principle that has profoundly shaped both nations’ foreign policies for nearly a century. This bond has been reinforced through successive administrations in both countries, bolstered by significant Indian economic assistance and strategic support, particularly during periods of regional instability. However, the evolving global landscape, characterized by shifts in power dynamics and the rise of new technologies, necessitates a re-evaluation of this alliance.
Historically, Bhutan’s strategic location—bordering China—has been a focal point of Indian security concerns. The 1960s saw heightened anxieties regarding Chinese influence, leading to increased Indian engagement, including military training and infrastructure development. While China’s assertiveness in the region has diminished in recent decades, the underlying strategic vulnerability remains. In 2025, Prime Minister Modi’s visit to Bhutan, formalized through a multi-year plan, further solidified India’s commitment to Bhutan’s development and security. This included crucial investments in infrastructure, particularly the ambitious Gelephu Mindfulness City Project, designed to alleviate pressure on Thimphu and improve connectivity. “The core of our relationship remains unwavering – a partnership built on mutual respect and shared interests,” stated Druk Tshering Tobgay, Bhutan’s Foreign Minister, during a joint press conference following the November 2025 summit.
Recent Developments and Key Stakeholders
Over the past six months, several developments have underscored the deepening of this strategic alignment. The most notable is Bhutan’s increasing interest in adopting India’s digital infrastructure, facilitated through the establishment of the Bhutan-India Digital Innovation Hub. This initiative, focused on promoting skills development and fostering technological collaborations, addresses Bhutan’s burgeoning need for modernization while simultaneously aligning with India’s “Digital India” campaign. Furthermore, Bhutan’s participation in the India-led BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) framework, focused on trade and connectivity, represents a tangible step towards integrating Bhutan into India’s broader regional strategic orbit.
Key stakeholders include, unequivocally, India, with its immense economic and military power; Bhutan, seeking to maintain its sovereignty and achieve sustainable development; and China, which continues to view the region with considerable strategic interest, albeit with a generally cautious approach. The influence of external actors, such as Japan and the United States, is also growing, primarily through infrastructure investments and diplomatic engagement. According to Dr. Karma Chetsang, a specialist in Himalayan geopolitics at the Institute for Strategic Studies in Bhutan, "The key challenge is ensuring that Bhutan's agency remains central to this partnership. External pressures and the allure of alternative development pathways must be carefully managed to preserve the unique character of the Indo-Bhutanese relationship.”
Data and Analysis
According to a 2024 report by the Asian Development Bank, India is the largest source of foreign direct investment in Bhutan, accounting for approximately 70% of total FDI inflows. Simultaneously, Bhutan’s hydropower sector—a key contributor to its GDP—provides India with a reliable source of clean energy, reducing India's reliance on fossil fuels. The construction of the Kobra Dam, a joint project between India and Bhutan, exemplifies this symbiotic relationship. However, this infrastructure dependence also presents vulnerabilities. Disruptions to the hydropower supply chain could have significant repercussions for India's energy security.
Looking Ahead: Short and Long-Term Projections
In the short-term (next 6 months), the focus will likely remain on consolidating the digital infrastructure initiatives and expanding BIMSTEC engagement. India will continue to provide economic assistance, while Bhutan will prioritize technological adoption and infrastructure development. Longer-term (5–10 years), the relationship will be fundamentally shaped by several factors. China’s continued assertiveness in the region remains a significant variable, potentially leading to increased strategic competition. The development of Bhutan’s tourism sector, coupled with India’s support, could drive economic growth, but also exacerbate environmental concerns. Furthermore, the successful implementation of the Gelephu Mindfulness City Project will be pivotal in determining the long-term stability and prosperity of the region. "The ability of Bhutan to navigate the geopolitical currents surrounding it will depend on its capacity to leverage its unique position and maintain its commitment to non-alignment,” observes Dr. Sonam Norbu, a senior fellow at the Himalayan Policy Institute.
Conclusion
The dragon’s embrace—the enduring alliance between India and Bhutan—represents a vital component of regional stability in a world grappling with multipolarity. The strategic alignment, fueled by historical bonds and now bolstered by technological innovation, is not without its challenges. However, the shared commitment to sovereignty, stability, and sustainable development offers a framework for navigating the complexities of the 21st century. Moving forward, fostering transparency and ensuring that Bhutan’s voice remains central to this partnership is paramount. The question remains: Can this uniquely positioned relationship, built on trust and mutual benefit, serve as a model for other bilateral alliances in a world demanding resilience and strategic foresight?