His Majesty The King and Prime Minister Narendra Modi during His Majesty’s 2017 visit to New Delhi.

PM Modi to visit Bhutan in mid-August

The Indian Prime Minister Narendra Modi will be making an official visit to Bhutan around mid-August this year.

This was confirmed by the Foreign Minister Lyonpo Tandin Dorji.

An advance team from India will be coming in July to discuss the details and outlines of the visit.

The Indian Prime Minister during his visit is expected to meet His Majesty The King, His Majesty The Fourth King and the Prime Minister Lyonchhen (Dr) Lotay Tshering, among others.

The visit will see the Indian PM inaugurating Bhutan’s ground station located in BBS for the SAARC satellite.

Another inauguration would also be the recently completed 720 MW Mangdechu project, though it is not clear whether it will be done in Thimphu or Trongsa depending on the weather.

PM Modi is also expected to launch the inauguration of the RuPay card for Indian visitors coming to Bhutan.

The benefit for Indian visitors is that they can use the card to withdraw local money or make credit card like payments.

The benefit for Bhutan will be that currently Indian visitors and tourists end up exchanging their Rupees at the border for Ngultrum and so now the Rupees can directly enter Bhutan thus enhancing Bhutan’s rupee reserves.

The RMA also proposes to double the current currency swap arrangement with the Reserve Bank of India. Currently Bhutan can withdraw up to USD 100 mn from the RBI for six months with a fixed interest rate of 6.5 percent.

The doubling of this would make its USD 200 mn and it would help address an issue of occasional INR shortage especially when the hydro payments are not due and there are heavy imports from India.

The agenda of discussions between the two sides are not fixed yet, but some expected topics are hydropower and specifically the 2,560 MW Sunkosh project. While India has given assurances the issue now boils down to an implementation modality.

The project was supposed to be signed in 2018 as part of the Golden Jubilee celebrations but it could not happen.

The Indian side wants to implement the Sunkosh project on a Turnkey model with full management control, unlike the current system of shared management control.

Turnkey is a project implementation where the Sunkosh project construction would be given to an Indian company which would do the design and construction with full control and only handover the project after completion, with no Bhutanese participation.

Bhutan has declined to accept such a model and has instead proposed that the current arrangement of the Inter-Governmental implementation mode be kept with some reforms.

Discussions are also expected to be held around bilateral ties and other areas of cooperation.

The visit of the Indian Prime Minister comes in the domestic backdrop of a huge election victory in India. Right after the victory, like in 2014, Modi made his first foreign visit to Maldives showing his government’s commitment to the ‘Neighborhood First’ foreign policy.

PM Modi was expected to make his visit to Bhutan in 2018 as part of the golden jubilee celebrations but the delay in the Mangdechu project, which he was supposed to inaugurate, and elections in Bhutan and then in India led to a delay.

Lyonchhen (Dr) Lotay Tshering reiterated the invitation to PM Modi during his state visit to India in December 2018 and again while being one of the guests invited for the swearing in of the Indian Prime Minister and the Cabinet on 30th May 2019.

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