India and Bhutan have approved 12 new Project Tied Assistance (PTA) projects worth Rs 332 crore as part of Bhutan’s 13th Five-Year Plan, further deepening their development partnership backed by a total Indian commitment of Rs 10,000 crore for the plan period.

The approvals came during the fifth India–Bhutan Development Cooperation Talks held in Thimphu, co‑chaired by Indian Foreign Secretary Vikram Misri and his Bhutanese counterpart Pema Lektup Dorji. The Ministry of External Affairs described the new PTA approvals as part of an ongoing review of India-supported development projects under Bhutan’s 13th Five-Year Plan (2024–29).

According to the joint press release, 12 new PTA projects amounting to Rs 332 crore have been cleared, taking the total number of PTA projects under the 13th Plan to 82 and the cumulative PTA outlay to Rs 6,860 crore. These newly approved projects span key sectors including infrastructure, healthcare, agriculture, urban amenities and disaster management, reflecting Bhutan’s own priority areas and India’s stated commitment to align its support with the Royal Government of Bhutan’s development agenda.

Rs 4,000 crore energy credit line to power Bhutan’s hydropower and clean energy drive

As part of the latest round of development cooperation, India and Bhutan exchanged an Umbrella Line of Credit Agreement between the Royal Government of Bhutan and EXIM Bank of India to operationalise a concessional Line of Credit of Rs 4,000 crore for energy projects in Bhutan. This sovereign-backed facility is designed to finance a broad basket of energy initiatives, with a strong emphasis on new hydropower schemes, grid and transmission strengthening, and diversification into other clean energy sources such as solar and wind, building on the long-standing hydropower partnership under which surplus Bhutanese power is exported to India.

The concessional nature of the credit line is expected to ease Bhutan’s financing burden while accelerating project readiness and construction timelines, and it fits into a wider matrix of Indian support—grants, PTA projects and multilateral funding—to help Bhutan expand its low‑carbon generation, boost regional clean energy trade and enhance its role as a key provider of renewable electricity to the Indian grid.

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Rs 10,000 crore support, funds already flowing across multiple windows

The two sides reviewed the overall progress of India’s Rs 10,000 crore support package for Bhutan’s 13th Five-Year Plan, which is structured across four main windows: Project Tied Assistance projects, High Impact Community Development Projects (HICDP), the Economic Stimulus Programme (ESP) and a Programme Grant.

India has already released Rs 1,250 crore towards the Economic Stimulus Programme, Rs 735.20 crore for High Impact Community Development Projects and Rs 200 crore as Programme Grant, with the meeting taking stock of utilisation and implementation across these lines of support.

The Bhutanese side “appreciated the support from India and its significance for wide-ranging programmes under its 13th FYP,” while the Indian side “reaffirmed its commitment to supporting the Royal Government of Bhutan’s development agenda,” guided by the shared vision of the King of Bhutan and Prime Minister Narendra Modi and based on Bhutan’s own priorities.

High-level engagement: King, PM and key ministers

Foreign Secretary Vikram Misri’s visit to Bhutan on July 30–31 came at the invitation of Dasho Pema Lektup Dorji and included a packed schedule of high-level engagements. Misri received an audience with the King of Bhutan and called on Prime Minister Tshering Tobgay and Foreign Affairs and External Trade Minister DN Dhungyel.

According to the Indian Embassy in Bhutan, Misri briefed His Majesty the King on “progress in bilateral development cooperation” reviewed during the Plan Talks and discussed various facets of India–Bhutan collaboration. In a post on X, the embassy noted that “His Majesty appreciated these advances, informed about developments at GMC, and reiterated his support for strengthening bilateral ties.”

The joint press release underlined that the visit was in line with the “longstanding tradition of close engagement and cooperation” between the two countries and reaffirmed that India and Bhutan “share an exemplary partnership characterised by trust, goodwill and mutual understanding at all levels and close people-to-people contacts.”

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Green parks, e-mobility and new agreements unveiled

The talks also saw tangible outcomes on the ground. The two Foreign Secretaries virtually inaugurated the Thimphu Ecological Park and Olakha Park, both built under the PTA project “Green Infrastructure and Open Spaces in Thimphu.” These parks are part of a broader effort to enhance urban liveability and green infrastructure in Bhutan’s capital.

In another visible milestone, 45 electric vehicles procured under the PTA project “Accelerate e-mobility uptake in Bhutan” were formally handed over to the Bhutanese government, signalling India’s support for Bhutan’s clean transport transition.

The development cooperation agenda was further deepened through the exchange of 2 key documents:

  • An Umbrella Line of Credit Agreement between the Royal Government of Bhutan and EXIM Bank of India to operationalise a concessional Line of Credit of Rs 4,000 crore for energy projects in Bhutan.
  • A Memorandum of Understanding between AIIMS New Delhi and Khesar Gyalpo University of Medical Sciences of Bhutan to collaborate on research and exchange programmes in health education and training.

These steps are intended to complement grant assistance with concessional finance and institutional linkages, particularly in energy and health—two long-standing pillars of India–Bhutan cooperation.

Development agenda anchored in trust and long-term planning

The approval of 12 new PTA projects worth Rs 332 crore builds on a long continuum of Indian support to Bhutan’s planned development, now channelled through a structured 13th Plan framework. India’s Rs 10,000 crore commitment—of which Rs 7,000 crore is earmarked specifically for PTA projects, Rs 1,000 crore for HICDPs, Rs 1,500 crore for the Economic Stimulus Programme and Rs 500 crore for Programme Grant—has been designed to align with Bhutan’s own five-year planning priorities across connectivity, infrastructure, health, education, agriculture, energy, skilling and the digital economy.

With 82 PTA projects now approved under the current plan and Rs 332 crore in fresh projects added at this round of talks, both sides have signalled that the focus is as much on implementation and utilisation as on new announcements. India and Bhutan also agreed to hold the next round of Development Cooperation Talks in New Delhi at a mutually convenient date, underscoring the institutionalised nature of this partnership.