India and Bhutan share a diplomatic relations with each other. Influence of Bhutan's foreign policy on India, India's foreign aid are two of the many reasons of why their relationship is termed as special.
The road is paved from back in the year 1968 with the enforcement of the special office in Thimphu, India.
History of Bhutan and India
During the year 1910 a treaty was signed between the British India and Bhutan. At that time, Bhutan was a protectorate of British India allowing the Britishers to control its foreign Affairs and defence.
In the tenure of India's independence, both the Nations fostered special or close relations. The annexation of Tibet in 1950 and the disputes of China border with both India and Bhutan led to the augmentation in the relations of India and Bhutan.
Bhutan is India's largest trading partner, reckoning 98% of its exports and 90% imports. Also, India share the land of 605(376 mi) with Bhutan.
1972- Bhutan's attitude
Between this duration, Bhutan developed an independent attitude by aligning with United Nations in 1971 and by that time it recognized Bangladesh as well. In the same period of 1972, a new trade agreement was signed by Bhutan due to which it was exempted from export duties for goods from Bhutan to any third world countries. Another stance of Bhutan's independent attitude was seen at the "non-aligned movement" Summit conference in Havana, Cuba.
Despite this, the treaty issue didn't affected the Indo-Bhutan relations. The operation conducted by the Royal Bhutanese Army against Anti-India insurgents claims it to be true.
In 2007, a new treaty of friendship signed, whereby, immaculating the guidance of India over the foreign policy of Bhutan and India's permission over arms imports. Hence, then Prime minister Manmohan Singh asserted his strong support towards the emergence of Bhutan as a democratic nation.
Priority of India
Transfer of US$ 985 million(₹61.60 billion) in the year 2015-2016 made Bhutan, the largest foreign aid beneficiary of India.
Whereas, during Bhutan's prime minister Tshering Tobgay's visit to New Delhi in August 2013 his request of an additional aid package from India worth (INR 54 billion was duly fulfilled and 5/6th if this amount (INR 45 billion) was used for Bhutan's 11th five-year plan. Remaining was bifurcated as INR 4 billion for pending projects of the previous plan period and the rest of the INR 5 billion putted as "Economic Stimulus package" of India for Bhutan's economy.
The third PM of Bhutan in November 2018, PM Lotay Tshering successfully benefited of a foreign aid package of Nu. 5 billion for its 12th five-year plan. In addition to this, Bhutan also received Nu. 4 billion for trade facilitation and bolstering economic linkages.
While Bhutan being the first choice of PM Narendra Modi for a foreign visit and the potential of Bhutan in terms of its strategic location and its hydro power potential plus the promises of India's PM Narendra Modi on helping in IT and digital sectors of Bhutan, despite these many facilities by India to Bhutan the situation seems worrisome with Chinese army taking over 100 sqkm of Bhutan and settling four new villages adjacent to Doklam. Hence, a danger to India's National security. In 2017 on the Doklam plateau, India and china had faced off after which India's defences weren't allowed to resume the construction of the road any further. This construction by China on Bhutanese soil is troublesome for India as it handles or advises on external relations of Bhutan plus continues to train it's armed forces.