Context: Recently, the Union Cabinet has approved the signing of a memorandum of understanding (MoU) with Bhutan for cooperation in the field of environment protection and management of natural resources.
Key Points

• The MoU, signed at a meeting chaired by the Prime Minister, will enable establishment and promotion of closer and long-term cooperation in environment protection and management of natural resources on the basis of equity, reciprocity and mutual benefits, taking into account the applicable laws and legal provisions in each country.
• It will cover air, waste, chemical management, climate change and other areas and will remain in force for 10 years from the date of signing.
• The Memorandum of Understanding shall facilitate the exchange of experiences, best practices and technical know-how through both public and private sectors and shall contribute to sustainable development.
• The development followed an earlier MoU between the two countries. An MoU was signed between the Central Pollution Control Board (CPCB), Ministry of Environment, Forest and Climate Change (MoEFCC) and the National Environment Commission (NEC), Bhutan in 2013, but it expired in 2016.

Historical perspective of Indo-Bhutan relations

• Bhutan has historically shared deep religio-cultural links with India. Guru Padmasambhava, a Buddhist saint who came to Bhutan from India, played an influential role in spreading Buddhism and cementing traditional ties between people in both nations. 
• Bhutan was a protectorate of British India and came under the British suzerainty in 1865. It signed the ‘Treaty of Punakha’ with the British in 1910. India’s relations with Bhutan were handled by a Political Officer based in Sikkim. This continued until 1948, when a Bhutanese delegation visited India and wished to revise the treaties previously signed with the British. 
• Independent India signed a fresh treaty with Thimpu in 1949 – the Treaty of Friendship and Cooperation. ‘Article 2’ of the treaty declared that Bhutan’s internal affairs shall function without any interference from India while the foreign relations will continue to take place under its guidance. Formal diplomatic relations were established in 1968 after a special office of India was opened in Thimpu. 
• During the Sino-India war in 1962, Bhutanese king declined to offer base to Indian troops. After securing a UN membership in 1971, Bhutan elevated its diplomatic status in New Delhi to full ambassadorial level and established diplomatic ties with other nations independent of India’s opinion. 
• In 2007, ‘Article 2’ of the 1949 treaty was revised, forever changing the terms of the erstwhile India-Bhutan relations. In 2017, Bhutan decided to withdraw from the BBIN Motor Vehicle Agreement for the reason that it would adversely affect its environment and sovereignty.

Indo-Bhutan present relations

• Both countries have mutual interests in diverse areas of cooperation – security, border management, trade, hydro-power and many more. India has helped set up the Chukha hydro project (1986-87), the Kurichu (2001-02) and the Tala project (2006-2007) in Bhutan. India has pledged to buy 10,000 MW by 2020, making Bhutan perhaps the only country in South Asia which enjoys trade surplus with New Delhi. 
• India has funded nearly all of Bhutan’s landmark projects, including the airport at Paro, Bhutan Broadcasting Station, the Bhutan-India microwave link, One million-tonne Dungsam Cement Plant, Bhutan Institute of Medical Sciences, and all exploration, survey and mapping of mineral resources. India contributes a hefty chunk of financial assistance to Bhutan’s five year plans. 
• Governed by the India-Bhutan Trade and Transit Agreement of 1972, in 2016 India stood Bhutan’s largest trading partner. Under the agreement, Bhutan also enjoys duty free transit of its exports to third countries.
• Bhutan has been central to India’s two major policies – the ‘Neighborhood First Policy’ and the ‘Act-East Policy’. After coming into power in 2014, PM Modi opted Bhutan as the first country for his foreign visit. Bhutan’s strategic location has helped India in flushing out militants in the North-East, playing a significant role in maintaining internal stability. 
• Bhutan is India’s only neighbor that is yet to join China’ Belt and road initiative (BRI). Since the 1990s, Bhutan has repeatedly turned down Chinese ‘package deal’ offers making bigger territorial concessions to Bhutan in return for the smaller Doklam area (remaining sensitive to India’s security concerns in the area).  
• During the Doklam standoff, Bhutan’s dogmatic stand and the ability to assert the status quo in the face of Chinese intrusions, speaks volumes about it’s commitment to India’s security interests in a region that does not hold equal strategic importance for itself. 

Future prospects:

• The strategically-located Bhutan continues to be of special significance to India, especially amid reports of the rapidly growing imprints of China. Trust in the strategic sphere is of paramount importance. Against the backdrop of reports about intensifying activities of insurgent groups along the India-Bhutan border, counter-terror cooperation is bound to gain greater salience in bilateral relations.
• The year 2018 celebrated the Golden Jubilee of the establishment of formal diplomatic relations between India and Bhutan.  Marking the completion of 50 years, Bhutan opened a Consulate in India’s north-eastern city of Guwahati in 2018. 
• The two countries have always shared a unique and organic relationship which is often termed as a ‘sacred bond’, largely sustained by regular high level visits and dialogues between the neighbors. Government of India ‘Bharat to Bhutan (B2B)’ vision on how “Bharat should stand for Bhutan and Bhutan for India”, introduced during his first foreign trip to Bhutan as Prime Minister, is no exaggeration.
• India and Bhutan share a time-tested relationship that is a perfect example of friendship and cordiality in South Asia. With India’s help, Bhutan can become economically competitive, militarily advanced and self reliant in matters of national security.
• Furthermore, as the world’s largest democracy, India can guide Bhutan in developing requisite democratic infrastructure and a political establishment  that can sustain the demands of a democratic society.