Enhancing Bilaterial Ties: India To Commit Nu 45B for Bhutan’s 12th Five Year Plan

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Prime Minister Dr Lotay Tshering thanked Prime Minister Modi for the invitation to visit India and for the warm reception accorded to him and his delegation.

(Source: Facebook/IndiainBhutan)

 

By Tshering Palden | Kuensel

Prime Minister Dr Lotay Tshering went on a three-day official visit to India from 27-29 December, at the invitation of Prime Minister Narendra Modi. The Lyonchhen was also accompanied by the Foreign Minister and Economic Affairs Minister.

This is Bhutan’s Prime Minister’s first overseas visit after assuming office in November 2018. It coincides with the Golden Jubilee year of the establishment of formal diplomatic relations between India and Bhutan. It was also in keeping with the tradition of regular high-level exchanges between the two countries.

Close ties between India and Bhutan

Prime Minister Modi also said that the two leaders visiting each other as their first choice of destination was a symbol of the shared commitment towards mutual cooperation on the path of development. 

After a ceremonial reception at the forecourt of the Rashtrapati Bhavan, Lyonchhen Dr Lotay Tshering, quoting Prime Minister Modi from his speech in 2014, said that India and Bhutan are close not because the two nations have shared borders but also because they have opened their hearts to each other. 

 

Photo: Facebook/India in Bhutan

 

“I’m here with volumes of love, care and affection from my King and the people of Bhutan so please send me back with no less love and care,” the Lyonchhen said.

Prime Minister Modi also stated that in line with the Government of India’s ‘Neighbourhood First’ policy, India is firmly committed to partner Bhutan in its quest for development and economic prosperity, based on the priorities of the people and the Royal Government of Bhutan.  

He congratulated the people and the Royal Government of Bhutan for the successful implementation of the 11th Five Year Plan, including development projects undertaken with assistance from the Government of India. 

The two Prime Ministers reaffirmed their commitment to further strengthen co-operation in all areas of mutual interest and to take their bilateral partnership to newer heights.

Government of India’s assistance package for Bhutan’s 12th Five Year Plan

The two sides then discussed the Government of India’s development assistance package for Bhutan’s 12th Five Year Plan. 

Besides the Nu 45 billion assistance to be allocated for Bhutan’s 12th Plan, the Government of India will also provide a transitional Trade Support Facility of Nu 4 billion over a period of five years to strengthen bilateral trade and economic linkages between the two nations. 

 

Photo: Facebook/IndiainBhutan

 

Lyonchhen Dr Lotay Tshering said that the funding was a wonderful gift. It will enhance the trading systems of Bhutan and make Bhutanese export products and industries more competitive in the long run, through various trade facilitation measures. 

“We’ll devise a mechanism which will benefit the country and the traders in the long run,” the Lyonchhen said. 

Some of the potential areas of investment could be: development of human resource, policy development and digitalisation of the system, the Lyonchhen said. 

The Finance Secretary, Nim Dorji also said that trade facilitation is one of the most important elements to promote trade. 

“Under the digitalisation of the system, one of the proposals is the establishment of a national single window which would simplify all trade transactions and promote trade facilitation,” the Finance Secretary said. 

Implications of the implementation of the Indian Goods and Services Tax (IGST) in July 2017

After the implementation of the Indian Goods and Services Tax (IGST) in July 2017, Bhutanese products became more expensive for Indian importers. 

Bhutan’s Foreign Minister, Dr Tandi Dorji said that India will boost trade in certain sectors where the IGST is not applicable. Bhutanese products could therefore be more competitive in these sectors or products. 

 

Photo: Behance

 

“For instance, the IGST is not levied on ferrosilicon, organic agriculture and horticultural products, thus the exporters can benefit hugely,” Dr Tandi Dorji said. 

The Lyonpo said that the government will work closely with the local industries and the Bhutan Chamber of Commerce and Industries (BCCI) to find mechanisms and ways to see how they could better facilitate trade. 

“The implementation modality of the fund is not yet finalised, thus we will discuss with respective agencies and the BCCI to find ways to support better trade,” he said. 

While Bhutan has requested for IGST exemption on exports from Bhutan, the Indian government has maintained that the exemption is not possible under Indian GST laws. 

Discussion on the joint cooperation on hydropower projects between the two nations

Prime Minister Modi added that cooperation in hydropower projects has been an important component in the long history of India-Bhutan relations. The two Prime Ministers then reviewed the implementation of ongoing bilateral hydro-power projects in Bhutan and agreed to expedite the process.

They also reiterated their commitment to jointly develop 10,000 megawatts of hydropower generating capacity in Bhutan via the Sankosh Hydropower Project. 

“This is a matter of happiness that the work on the Mangdechhu project is going to be completed soon. We now have agreement also on the tariff of this project,” PM Modi said. 

The two delegations held another round of discussion today to finalise the power export tariff for the Mangdechhu project.

 

Mangdechhu hydropower project.

Photo: Kuensel

 

Moreover, Prime Minister Modi said that the ground station being built by the Indian Space Research Organisation in Bhutan is expected to be completed soon. This will benefit Bhutan in tasks such as providing weather information, telemedicine and disaster relief in the far-flung areas of the country.

Prime Minister Dr Lotay Tshering thanked Prime Minister Modi for the invitation to visit India and for the warm reception accorded to him and his delegation. 

He recalled the unique and historical ties of friendship and understanding that exist between the two countries. He is looking forward to working with the Government of India to further strengthen bilateral ties.

“I have assured the Prime Minister that as always India will play the role of a trusted partner and friend in the development of Bhutan,” said Prime Minister Narendra Modi.

 

This article first appeared in kuensel and has been edited for the Daily Bhutan.

 


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