India and Bhutan signed two agreements during Foreign Secretary Vikram Misri's visit to Bhutan from July 30 to July 31, including an Umbrella Line of Credit Agreement between the Royal Government of Bhutan and EXIM Bank of India operationalising a concessional Line of Credit of Rs 4,000 crore for energy projects, according to the Ministry of External Affairs (MEA). The second agreement was a Memorandum of Understanding between AIIMS New Delhi and Khesar Gyalpo University of Medical Science of Bhutan on health education and training.
Line of Credit for Energy Projects
The Umbrella Line of Credit Agreement between the Royal Government of Bhutan and EXIM Bank of India operationalises a concessional Line of Credit of Rs 4,000 crore for energy projects in Bhutan, the MEA said in a media briefing. The instrument functions as a concessional credit facility extended by India's EXIM Bank to support Bhutan's energy sector, forming part of the broader development partnership between the two countries.
Development Partnership Review and New PTA Projects
The visit was focused on the India-Bhutan Development Cooperation platform and reviewed the bilateral development partnership, according to MEA spokesperson Randhir Jaiswal. Foreign Secretary Misri visited Bhutan from July 30 to July 31 at the invitation of his Bhutanese counterpart Pema Lektup Dorji to co-chair the Plan Talks for Bhutan's 13th Five-Year Plan (2024-29).
During the visit, India and Bhutan reviewed progress of bilateral development cooperation under the plan, with 12 new Project Tied Assistance (PTA) projects worth Rs 332 crore approved during the fifth India-Bhutan Development Cooperation Talks. With this approval, a total of 82 PTA projects worth Rs 6,860 crore have now been approved under the 13th Five-Year Plan.
The newly approved projects cover sectors including:
- Infrastructure
- Healthcare
- Agriculture
- Urban amenities
- Disaster management
India's overall support of Rs 10,000 crore for Bhutan's 13th Five-Year Plan includes Project Tied Assistance projects, High Impact Community Development Projects, the Economic Stimulus Programme and Programme Grant, according to the MEA.
Health Education Cooperation
The second agreement signed during the visit was a Memorandum of Understanding between AIIMS New Delhi and Khesar Gyalpo University of Medical Science of Bhutan for collaboration on research and exchange programmes related to health education and training.
Official Meetings and Bilateral Agenda
During the visit, Foreign Secretary Misri met Bhutanese King Jigme Khesar Namgyel Wangchuck, Prime Minister Tshering Tobgay and Foreign Affairs and External Trade Minister DN Dhungyel. The two sides discussed bilateral cooperation in development partnership, energy, trade and investment, connectivity, people-to-people ties and regional issues of mutual importance, the MEA said. The Indian side reaffirmed its commitment to supporting Bhutan's development agenda.
India-Bhutan Commitments at a Glance
| Commitment | Amount | Purpose / Coverage |
|---|---|---|
| Umbrella Line of Credit (EXIM Bank of India) | Rs 4,000 crore | Energy projects in Bhutan |
| India's support for Bhutan's 13th Five-Year Plan | Rs 10,000 crore | PTA, High Impact Community Development Projects, Economic Stimulus Programme, Programme Grant |
| New PTA projects approved in current talks | Rs 332 crore | Infrastructure, healthcare, agriculture, urban amenities, disaster management |
| Cumulative PTA projects under 13th Five-Year Plan | Rs 6,860 crore | 82 projects |
The agreements reinforce the India-Bhutan development partnership, which continues to operate through concessional credit instruments and project-tied assistance. For trade finance and export credit professionals, the operationalised Line of Credit represents a structured, government-to-government financing mechanism that will channel funds into energy project development in Bhutan, with EXIM Bank of India serving as the lending institution. According to the MEA, India and Bhutan share a close partnership based on trust, goodwill and mutual understanding, with strong people-to-people ties between the two nations.
Sources:
