13 Apr Trade Agreement Between India And Bhutan
Although relations have remained close and friendly, the Bhutanese government has expressed the need to renegotiate parts of the treaty in order to strengthen Bhutan`s sovereignty.  Bhutan slowly began to maintain an independent position on foreign policy by associating the United Nations in 1971, recognizing Bangladesh and signing a new trade agreement in 1972 that exempted export duties from Bhutan`s products to third countries.  Bhutan also exercised its independent position at the United Bloc Movement (NAM) summit in Havana, Cuba, in 1979, voting with China and some Southeast Asian countries, not With India, on the issue of Cambodian Khmer Rouge participation in the conference.  Unlike Nepal, where the 1950 treaty with India was the subject of great political controversy and nationalist resentment due to Indian immigrants to Nepal, the nature of Bhutan`s relations with India was not influenced by concerns about the treaty`s provisions.   From 2003 to 2004, the Royal Bhutanese Army conducted operations against the anti-Indian insurgents of the Assam Liberation Front (ULFA), who operated bases in Bhutan and used their territory to carry out attacks on Indian soil.  India renegotiated the 1949 treaty with Bhutan and signed a new friendship treaty in 2007. The new treaty replaced the provision that required Bhutan to take India`s foreign policy directions with greater sovereignty, not that Bhutan had to obtain India`s authorization to import arms.   In 2008, then-Indian Prime Minister Dr. Manmohan Singh visited Bhutan and expressed strong support for Bhutan`s progress towards democracy.  India allows 16 entry and exit points for Bhutanese trade with other countries (the only exception being the PRC) and has agreed to develop and import at least 10,000 megawatts of electricity from Bhutan by 2021.
Bilateral relations between the Himalayan Kingdom of Bhutan and the Republic of India have traditionally been close and the two countries have a „special relationship“ that makes Bhutan a protected state, but not a protectorate of India.  India remains influential in Bhutan`s foreign policy, defence and trade. In 2012/2013, India`s budget assistance to the kingdom amounted to $600 million (approximately $30 billion). It has steadily increased over the years, reaching $985 million (61.60 billion EUROS) in 2015/16, making Bhutan the largest recipient of India`s foreign aid. During his visit to New Delhi in August 2013, Bhutan`s Prime Minister Tshering Tobgay requested an additional $54 billion ($819 million, exchange rate) aid plan for India at the time of the signing of the agreement. Five-sixths of this amount (45 billion INR) is planned for Bhutan`s 11th five-year plan. This amounts to 4 billion INR for future projects during the period covered by the plan. The remaining INR$5 billion was part of Bhutan`s economic recovery plan. India operates 3 1,416 MW hydroelectric projects in Bhutan and another 3 out of 2,129 MW are under construction.  On his first foreign visit to India in November 2018, Bhutan`s third Prime Minister Lotay Tshering secured an aid package of about $45 billion (about $635 million) for the 12th Five-Year Plan.