While understanding Bhutan's relation with India, one has to keep in mind that the nation's relationship with India did not evolve after 1947 when India achieved its independence from the British rule.
Relation during British rule
Bhutan had come under the British suzerainty after clashing with the colonial powers in 1865. In 1910, the British had signed the Treaty of Punakha with Bhutan and this laid the foundation of the relation between India and Bhutan in subsequent times. Through this treaty, the British got the power to regulate Bhutan's foreign relations and Bhutan was also assured of security against any possible threat from China, its northern neighbour.
Continuity of the past
After the British had left the subcontinent, the relationship between India and Bhutan saw a continuity of this pattern. The Bhutanese agent in India continued to function as before while political representative from India based in Sikkim contributed in looking after Bhutan.
The Bhutanese were apprehensive about their future relations with India in years leading to the latter's independence. When the British Cabinet Mission had visited India in 1946, the Bhutanese authorities presented a memorandum about their country's separate identity as compared to the princely states in the then India. The Cabinet Mission had confirmed the political status of Bhutan and the latter remained autonomous when the British had exited the following year.
Nehru assured an apprehensive Bhutan
The Bhutanese were still apprehensive about India's dominance and forged an alliance with Sikkim and Tibet to create a balance. But the former prime minister of India, Jawaharlal Nehru, assured Bhutan about its distinct identity and autonomy.
Request to revise 1865 treaty
In April 1948, a Bhutanese delegation arrived in India and urged the Ministry of External Affairs to revise the treaty signed between the British India and Bhutan in 1865 after the Duar War. India reciprocated and reiterated its respect for Bhutan's independence provided the latter also maintained the same rapport it had with the Britishers.
India also agreed to return the Dewangiri Hill strips in return for a revision of the essential provisions of the 1910 treaty. Bhutan also agreed to forgo its subsidy (as per the 1910 treaty) which it had received from India if it had returned 800 square miles of territory that the British had taken through the 1865 treaty.
Thimpu demands fresh treaty
Thimpu then demanded to enter into a fresh treaty with New Delhi which the latter welcomed, thinking that close relation with the Himalayan kingdoms would nullify any serious threat emanating from the Chinese side.
1949 treaty signed
Consequently, India and Bhutan signed the Treaty of Peace and Friendship on August 8, 1949, in Darjeeling. The treaty was signed by the representatives of the Government of India and the Government of His Highness, the Druk Gyalpo (the King of Butan). The treaty marked a continuation of the Anglo-Bhutanese treaty of 1910 and continued with the British legacy of treating the Himalayas as the sentinel of India's security.
Main features of 1949 treaty
The main feature of this treaty is that the King of Bhutan, for the first time, had signed a treaty as a sovereign monarch and both countries expressed the desire to maintain cordial relations with each other. The treaty contained 10 articles. Here are they:
Article 1 said that the two governments will have a perpetual peace and friendship between them.
Article 2 reflected the spirit of Article 8 of the 1910 treaty by declaring that India would not interfere in Bhutan's administrative affairs and the latter would be guided by the former's advice in its external relations.
Article 3 saw India revising the annual allowance to Bhutan upto Rs 5 lakh (revising Article 4 of the 1910 treaty).
Article 4 saw India agreeing to return 32 square miles of the Dewangiri territory to Bhutan within a year of signing of the treaty.
Article 5 and 6 said both states would develop free trade and commerce and Bhutan would import arms, ammunition, machinery and warlike material only through India. Bhutan also agreed that there would be no export of arms and ammunition across its frontier either by its own government or any private individual.
Under Article 7, both countries agreed that subjects of both countries residing in each other's territory would enjoy equal justice.
Article 9 empowered both countries to extradite criminals taking refuge in each other's territory.
Special relation between the two neighbours
Through the 1949 treaty, Bhutan entered into a special relation with India and laid the foundation for greater assistance for its economic development. The Indo-Bhutan treaty became the cornerstone of Bhutan's foreign policy and the Chinese annexation of Tibet in 1950 strengthened this relation further as both nations began to see a common threat in Beijing.
Nehru says aggression against Bhutan is aggression against India
The relation between the two neighbours had a fluent run till 1959. In 1954, the then Bhutanese king Jigme Dorji Wangchuk visited India and four years later, prime minister Jawaharlal Nehru visited Bhutan. He reiterated India's wish that Bhutan remained an independent entity. Next year, when the Chinese military crackdown in Tibet led to the Lhasa Uprising, Nehru even told the Indian Parliament that any act of aggression against Bhutan would be considered an act of aggression against India.
Signs of gap between the two countries since late 1950s
However, in 1959, when Bhutan requested India about participating in negotiations with the Chinese for resolving the Sino-Bhutanese border disputes in the wake of the Chinese repression in Tibet, India turned it down.
In May 1960, a misunderstanding arose between India and Bhutan over a map which was released by the India side. Bhutan said the map had not shown the border between the two countries as an international one. Later, boundary strip maps between the two countries were signed. But the Bhutanese National Assembly or Tshogdu argued that it was time for Bhutan to have direct diplomatic relations (challenging Article 2 of the 1949 treaty).
Bhutan's growing assertion
Bhutan gradually began to assert its independence in the economic sphere. During the 1960s, it convinced India in having direct economic relations with other countries to work for its development. It negotiated with a Swedish company for establishing a paper factory in its own soil and also invited French nuns to develop medicinal services.
In 1961, Bhutan and New Delhi signed a pact to harness the Jaldhaka River for generating 18,000 Kilowatts (KW) of hydro-electric power of which Bhutan would receive free supply of 250 KWs. This project was completed in 1966. Besides, a 120-mile road was also built at the Assam border to connect Bhutan. India also constructed roads in Bhutan.
During the 1962 Sino-Indian war, some of the Indian troops had crossed into the Bhutanese territory. Bhutan complained to the Indian Army that it is a sovereign state and its king refused to offer base to the Indian troops for defence purposes. Bhutan stressed that the 1949 treaty was not a defence pact. Bhutan continued with its effort to establish an independent identity.
In 1962, Bhutan joined the Colombo Plan with India's assistance and received an international status for the first time.
In 1968, Bhutan attended the UNCTAD (United Nations Conference for Trade and Development) session in New Delhi and barred unauthorized foreigners, including Indians, from entering its territory. In 1969, Bhutan also started its own currency. In 1970, it formed its own foreign affairs department. In 1971, it was admitted in the United Nations (though with India's help).
The bilateral relation cruised smoothly till 1974 but thereafter, Bhutan again tried to play a more independent role in foreign policy. In 1978, the Bhutan Mission in India was renamed as the Royal Bhutanese Embassy, which was seen by many in India as a key diversion from the 1949 treaty. Thimpu also established diplomatic relations with Bangladesh and had its own standard time. In September 1979, the then Bhutanese king, Jigme Singye Wangchuk said that Bhutan did not consider India's advice on foreign policy issues as binding.
Bhutan asserted its independent stance at the Non-Aligned Movement (NAM) summit conference in Havana, Cuba, in 1979, by voting with China and some Southeast Asian countries instead India on the issue of allowing Cambodia's Khmer Rouge in the conference.
In 1980, Bhutan's foreign minister was elected as the chairman of the Economic and Social Council for Asia and Pacific (ESCAP) and it was seen as another big leap by the Himalayan state in the international arena.
In 1981, India decided to hold bilateral talks between Bhutan and China and also conducted a survey of the Sino-Bhutanese border area. Bhutan even sent a diplomatic note to the Chinese Embassy in New Delhi, which caused much ripple in the Indian establishment. In April 1984, Bhutan even began boundary talks with the Chinese.
Bhutan also reduced India's assistance in its fifth five-year plan by 43 per cent and found new patrons in various western countries besides international monetary and welfare organizations. This behavior clearly suggested that Bhutan was eager to deviate from the 1949 agreement and adhered to a more lose interpretation of the phrase ‘aid and advice of India'.
Give and take relations in 1990s
In the 1990s, the Indo-Bhutan bilateral relation was characterised by a more give-and-take relationship. Bhutan's king had praised India for making efforts for Bhutan's development and also appreciated the relationship which was marked by ‘mutual trust and equality'. It also developed good relation with the neighbouring states of the Indian Union like West Bengal and Assam. India also assured Bhutan protection from all anti-national activities, particularly on the issue of Nepalese refugees.
Bhutan's drive against anti-Indian elements from its soil in the early 2000s
In 1993, Bhutan reinstated its support for India and expected similar reciprocity from the latter. In 1996, the Bhutanese King said that Thimpu and New Delhi began negotiations on a mutual extradition agreement to deal with cross-border terrorism and organized crime. India, however, held the problem as Bhutan's own although assured it of security. It was a strategic move by India to ensure that elements in Bhutan did not go against India by accusing it of interfering and hence prevent them from going China's way.
Bhutan has always been a close friend of India which the latter must not forget
Bhutan, in lieu, backed India's stand on the Non-Proliferation Treaty and Comprehensive Test Ban Treaty, which were accused as discriminatory de-nuclearisation programmes and also supporting India's claim for a permanent seat in the UN Security Council.
Bhutan proved to be India's trusted friend in 2003 when it launched Operation All Clear and Operation Flush out against Indian insurgents taking shelter in its territory. Co-incidentally, a BJP-led government was in power in India at that time.
New challenges under new realities
But the relation between India and Bhutan faced new challenges under new realities. Both India and Bhutan have more engagement with China today compared to what it was sixty years ago, the second article of the 1949 treaty began to work more against India's interests. Pro-Chinese elements have criticized India over the article, accusing it of forcing its smaller neighbours into submission. But India could do without the article for Thimpu has been a close friend of New Delhi and there is very little reason that it will not remain so, irrespective of the treaty clauses because of its geographical disadvantages.
New treaty in 2007
Therefore, India negotiated a new treaty with Bhutan in 2007 whereby the provision requiring Thimpu to seek India's guidance in foreign policy was replaced with broader sovereignty and would not require Bhutan to get India's approval over importing arms. In 2008, the then prime minister of India, Manmohan Singh visited Bhutan and supported the country's progress towards democracy.
PM Narendra Modi focuses on Bhutan
In 2014, Prime Minister Narendra Modi chose Bhutan as his first foreign destination and during his two-day visit, Modi made overtures at the neighbour even while stressing an equal relation. Observers said it was an attempt to win back Bhutan as a means to balance the increasing Chinese influence in the Himalayan nation and also to take into confidence a new democracy. The Indian prime minister perhaps made the best blending of diplomacy and economy when he explained the idea of B2B as Bharat to Bhutan.
Bhutan is facing high unemployment rate and national debt and this could give the necessary opening to China to exert more influence in that country, something which will not leave India in a happy state of mind. Modi's effort was a sincere one to convey a message to Thimpu that despite India's growing importance in the world stage, the significance of its immediate neighbourhood hasn't diminished.