The two-day visit, Modi's first foray abroad after assuming office May 26 following a stupendous election victory, also gave a message that the new regime's foreign policy attaches primacy to the neighbourhood. China has been aspiring to rival India as a dominant and benevolent power by undertaking development projects like construction of ports in Bangladesh, Pakistan and Sri Lanka.
Modi's laying the foundation stone for a 600 MW hydel power project a joint venture between Indian and Bhutanese companies and inaugurating the new Supreme Court of Bhutan building constructed with Indian assistance, were intended at reinforcing India's desire to be seen as a valuable partner in Bhutan's development.
Bhutan has been perhaps India's only unwavering ally for decades in the South Asian region, known for intense rivalries among nations. Sandwiched between two big regional powers, India and China, the tiny mountainous nation of pristine natural beauty and 750,000 easy-going people is of strategic importance to New Delhi.
India has also been its biggest trade partner, but of late China has been endeavouring to engage with Bhutan, and the two countries are slated to hold a further round of talks in the coming months, even though Beijing has no diplomatic representation in Thimphu.
In June last year, the then UPA government's decision to reduce subsidy on cooking gas cylinders to the Himalayan nation, before again reversing its decision, had hurt Bhutan badly. Observers were quick to interpret the short-lived step as New Delhi's punitive reaction to Bhutan's tentative engagements with China.
Modi's visit, in that sense, succeeded in dispelling whatever doubts Bhutan may have had about India's intentions and its continuing assistance.
The hydropower project was of special importance, with Bhutanese \Prime Minister Tshering Tobgay hours after Modi left Thimphu - terming the hydro-power cooperation as the "centre-piece of the two countries' cooperation". Bhutan has fixed a target of producing 10,000 MW hydropower by 2020.
Modi's comment "terrorism divides, tourism unites" and his suggestion that the two countries formulate a policy for a joint tourism circuit, besides holding an annual sports meet of northeastern Indian states and Nepal and Bhutan, also underlines a pro-development outlook to a slightly nuanced neighbourhood foreign policy of the new government.
For Bhutan, a landlocked nation dependent on India for its daily needs, a major plus is India's decision to exempt it from any ban or quantitative restrictions on exports of items like milk powder, wheat, edible oil, pulses and non-basmati rice.
A major gain for New Delhi is the mention in the joint statement issued at the end of Modi's visit that Bhutan agreed with India "not to allow each other's territory to be used for interests inimical to the other".
In 2003, the Royal Bhutanese Army conducted a military operation flushing out anti-India insurgent groups who had set up hideouts in its territory. Mentioning the 2003 operation, Tobgay said the joint statement represented a continuity in relations between the two countries.
On the question of continuity, Modi's announcement that his government would fulfil the commitments made by its predecessor UPA regime to Bhutan is highly significant. Though he specifically talked about Bhutan, the message would also not be lost on India's other neighbours who may have been edgy about the line that the new BJP government could follow.
Outside the region, to the world at large, Modi's parleys in Bhutan are likely to be seen as India's efforts to foster brotherhood in a conflict-torn region, instead of playing the "big brother" to its smaller neighbours.