India-Bhutan Current Affairs
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The new bilateral Agreement on Trade, Commerce and Transit between India and Bhutan came into force from July 2017. The new agreement aims to further strengthen the bilateral trade relations between both countries.
The new agreement signed in November 2016 provides for a free trade regime between the territories of India and Bhutan. It also provides for duty-free transit of Bhutanese merchandise for trade with third countries.
Bilateral trade between both countries will continue to be transacted in Bhutanese Ngultrums and Indian Rupees. Moreover, the new agreement removes requirement of having an annual consultation between India and Bhutan for the transit of goods of both countries along with the goods originating in third country
The bilateral trade relations between India and Bhutan are governed by the Agreement on Trade, Commerce and Transit. The agreement provides for a free trade regime between the territories of India and Bhutan. The last agreement was renewed on July 29, 2006 for ten years. The validity of this agreement was extended (from July 29, 2016) for one year or till new agreement comes into force.
The present standoff between Indian and Chinese troops in Doklam (located at the tri-junction of India, China and Bhutan) has highlighted India’s very special relationship with Bhutan, including military responsibilities.
In June 2017 Chinese Army (People’s Liberation Army) construction party had entered the Doklam area and attempted to construct a road. Royal Bhutan Army (RBA) patrol had attempted to dissuade them from this unilateral activity. Later Bhutan underlinined that the construction of the road inside Bhutanese territory was a direct violation of the 1988 and 1998 agreements between Bhutan and China and affected the process of demarcating the boundary between these two countries. Since these developments, India and Bhutan have been in continuous contact, giving a view of India’s role in Bhutan’s security and matters of mutual interest.
India’s defence commitment to Bhutan
Under the 2007 India-Bhutan Friendship Treaty, both countries have agreed to cooperate closely with each other on issues relating to their national interests. It provides that, neither Government will allow the use of its territory for activities harmful to the national security and interest of the other.
Under the previous treaty, India was to guide Bhutan on foreign and defence policies. The 2007 treaty is meant to respect the sensitivities of Bhutan regarding its sovereignty. In reality, it gives India virtual responsibility to protect Bhutan from the kind of external threat including threat from Chinese military.
Moreover, the Eastern Army Command and the Eastern Air Command of India have integrated protection of Bhutan into their role. The Indian Military Training Team (IMTRAT), headed by a Major General also plays a critical role in training Bhutanese security personnel.