Big India-Bhutan boost! ₹4,000 crore energy deal, EVs and 12 new projects announced

At the invitation of Bhutan’s Foreign Secretary Pema Lektup Dorji, India’s Foreign Secretary Vikram Misri paid an official visit to Bhutan from July 30-31, 2026, to co-chair the 5th India-Bhutan Development Cooperation Talks (Plan Talks) for Bhutan’s 13th FYP.

During his visit, Foreign Secretary Misri received an audience with His Majesty The King of Bhutan. He also called on Bhutanese Prime Minister Dasho Tshering Tobgay and Lyonpo D.N. Dhungyel, Minister for Foreign Affairs and External Trade.

The two sides held discussions on the entire spectrum of bilateral cooperation, including development partnership, energy, trade and investment, connectivity, people-to-people ties, and regional issues of mutual interest.

As part of the discussions, 12 new Project-Tied Assistance (PTA) projects worth INR/Nu. 3,320 million (₹332 crore) were approved. The projects cover key sectors including infrastructure, healthcare, agriculture, urban amenities, and disaster management.

With these approvals, a total of 82 PTA projects worth INR/Nu. 68,600 million (₹6,860 crore) have been sanctioned under Bhutan’s 13th FYP.

India has also released INR/Nu. 12,500 million (₹1,250 crore) under the Economic Stimulus Programme (ESP), INR/Nu. 7,352 million (₹735.20 crore) towards High Impact Community Development Projects (HICDPs), and INR/Nu. 2,000 million (₹200 crore) as Programme Grant. The meeting reviewed the utilisation and progress of these funds.

The Indian side reiterated its commitment to supporting Bhutan’s development priorities, guided by the shared vision of the King of Bhutan and the Prime Minister of India, while aligning with the aspirations of the Royal Government and people of Bhutan.

The Bhutanese side expressed appreciation for India’s continued support and its role in advancing key programmes under the 13th FYP.

The two Foreign Secretaries also virtually inaugurated the Thimphu Ecological Park and Olakha Park, developed under the PTA project titled “Green Infrastructure and Open Spaces in Thimphu”.

In another milestone, 45 electric vehicles procured under the PTA project “Accelerate e-mobility uptake in Bhutan” were handed over to the Royal Government of Bhutan.

The Foreign Secretaries also witnessed the exchange of key agreements, including:

• 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 ₹4,000 crore for energy projects in Bhutan.
• A Memorandum of Understanding between All India Institute of Medical Sciences (AIIMS), New Delhi, and Khesar Gyalpo University of Medical Sciences of Bhutan (KGUMSB) for cooperation in health-related education, research, and training programmes.

The latest developments reaffirm the close and enduring partnership between India and Bhutan, with a focus on sustainable development, connectivity, energy cooperation, and strengthening people-centric initiatives.