Narendra Modis visit to Bhutan

History
The basis for bilateral relations between India and Bhutan is formed by
the Indo-Bhutan Treaty of 1949, which provides for, among others,
perpetual peace and friendship, free trade and commerce and equal
justice to each others citizens. The much speculated Article 2 in the
Treaty, in principle, calls for Bhutan to seek Indias advice in external
matters, while India pledges non-interference in Bhutans internal
affairs
Formal bilateral relations between Bhutan and India were established
in January 1968 with the appointment of a special officer of the
Government of India to Bhutan. The India House (Embassy of India in
Bhutan) was inaugurated on May 14, 1968 and Resident
Representatives were exchanged in 1971. Ambassadorial level relations
began with the upgrading of residents to embassies in 1978
Key points of Modi's visit to the Himalayan
nation

The reiteration of their commitment to achieving the 10,000 MW

target in hydropower cooperation
Inaugural of the Supreme Court of Bhutan
Discussion of free trade arrangement between them and expansion of
bilateral trade.
International relations and strategies behind the
visit
The Chinese factor
Bhutan shares 605-kilometer border
with India and 470-km border with
China. Beijing was very keen on
establishing full-fledged diplomatic
relations with Bhutan and open its
embassy in Thimphu.
The Chinese move has made many
in the Indian strategic establishment
jittery. Modi choosing Bhutan as the
first destination of his foreign trip
had gone a long way in reassuring
the Bhutanese about India
A zero problem destination
Thimphu also offers a zero-problem destination for the Indian PM's maiden
foreign visit. Bangladesh and Sri Lankatwo other SAARC neighbours
which were discussed in the PMO and the MEA as possible destinations of
Modi's first foreign tripwould have created problems domestically.
Modi had other choices too from a list of major powers like Russia, Japan,
and China for his maiden foreign trip. The first of this listRussia
eliminated itself by its weird move of lifting its embargo on selling weapons
and defence equipment to Pakistan
But then given the deep distrust and bitter rivalry between Japan and
China, choosing either of them for Modi's first foreign trip would have
upset the other.
Trade
Planned development in Bhutan began in 1961, with the first two Five
Year Plans (FYP) wholly financed by the Government of India (GOI).
Over the years, Indian assistance increased steadily from Rs. 107
million in the First FYP to Rs. 9000 million in the Eighth FYP.
While Bhutans source of foreign aid has diversified significantly since
it became a member of the United Nations, India continues to be the
major donor of external aid to Bhutan.