Context

Recently, China and Bhutan signed a MoU to settle and demarcate their borders vis-à-vis a three-step roadmap.

Significance of MOU

• Bhutan happens to be one of the few countries questioning China’s regional ambitions by not establishing diplomatic ties and demarcating territorial borders with the former.
• China claiming this MoU as a ‘deadlock breaker’- a deal that will set the ground for future China-Bhutan diplomatic relations.
• There is also a widely believed Chinese perception that this MoU has eroded India’s sphere of influence and power vis-à-vis China.

Perception on Bhutan’s Foreign policy

• It is a product of balance of threat and not balance of power. In other words, it was the common perception of Chinese threat and intentions that drew Bhutan closer to India.
• The Chinese intentions and ambitions were quite clear since the 1930s when Mao had claimed Bhutan to be a part of China.
• These suspicions got enhanced with China’s Tibet annexation and inhumane treatment of Tibetans, pushing Bhutan to embrace India and seek its security and economic aid.

Bhutan & China Relation

• China has continued claiming and disputing territories with Bhutan. At present, China’s claims are in Central, Eastern, and Western Bhutan.
• Starting from 1984, Bhutan had even begun direct negotiations with China to solve these disputes peacefully and have held 24 rounds of talks and 10 rounds of expert-level meetings to date.
• In 1996, China had even offered a package deal to solve the issue. But Bhutan rejected the proposal keeping Indian security concerns in mind. With limited progress, both China and Bhutan signed an agreement in 1998 to maintain the status quo until the border dispute is resolved.
• But despite the agreement, China has used encroachments and transgressions to persuade Bhutan to resolve the outstanding border issues.
• These intimidating tactics have increased with the 2017 Doklam stand-off, when China developed military infrastructure and settlements in the region.
• In 2020, it also laid claims in Western Bhutan for the first time and built military outposts and settlements in Northern Bhutan. In fact, these tactics seem to have persuaded Bhutan to sign the recent MoU.

Bhutan’s Significance to India

• Geographical Significance: Bhutan shares border with four Indian States: Assam, Arunachal Pradesh, West Bengal and Sikkim. Nestled in the Himalayas, Bhutan serves as a buffer between India and China. Security of Bhutan’s present borders especially its western border is very important for India.
• Economic Significance: Bhutan provides a market for Indian commodities and is a destination for Indian investment. Also for India, Bhutan is a rich source of hydropower.
• Political Significance: A politically stable Bhutan is important to India. An unstable and restive Bhutan can provide a safe haven to anti-India activities and anti-India militant groups.

Concerns for India:

• China's new territorial claim is part of a larger Chinese strategy to put pressure on India's smaller neighbours, to punish them for any closer to India.
• In 2017 China had invaded the plain of Doklam, called Bhutan, which led to tensions between the Indian and Chinese forces.
• China may have done this to put pressure on India, or divert India's attention to its violence in Ladakh.
• Sakteng is located near the border of Arunachal Pradesh, another part of which is also called China.
• Even after the 2007 India-Bhutan Friendship Treaty, Indian troops have a responsibility to protect Bhutan from a kind of external threat posed by Chinese troops.
• According to the India-Bhutan Friendship Treaty of 1949, Bhutan allowed India to "direct" its foreign policy and security issues.
• However, the 1949 treaty was amended in 2007 to honour Bhutan's sensitivity to its sovereignty.
• Under the India-Bhutan Friendship Agreement of 2007, both parties have agreed to work closely together on issues of national interest.
• No Government shall allow the use of its territory to cause harm to the security of the country or the interests of another.
• China has said a third party should not point fingers at the China-Bhutan border issue, which is a clear indication of India.

Conclusion

China is on a quest of its own and its recent engagement with Bhutan- one of India’s closest neighbours and friends has enabled China to build a seemingly benign narrative for the world while belittling India and its efforts in the neighbourhood. China’s increasing presence in the neighbourhood has triggered and continues to trigger several anxieties for India. Having exposed much of the neighbourhood to China’s investments and debt-trap diplomacy, India is now more committed to preventing the same in Bhutan. The competition isn’t just for power and security, but for also prestige, and it is likely that this competition for Bhutan will have spill-over effects throughout the region.