Modi and Lotay Tshering have a ‘warm exchange of views’ on important aspects of bilateral relationship.

India will support Bhutan’s developmental needs by providing ₹4,500 crore, Prime Minister Narendra Modi announced on Friday, while visiting Prime Minister of the Himalayan country Lotay Tshering indicated his government’s commitment to maintain warm ties with India,

“I have assured the Prime Minister that India will continue to be a reliable friend and a partner of Bhutan’s developmental needs. India will provide ₹4,500 crore for Bhutan’s 12th five-year plan. This contribution will be processed according to Bhutan’s preferences and necessities,” announced Prime Minister Modi after holding official-level talks with the Bhutanese leader and senior officials.

Bhutan remains one of the key recipients of developmental assistance from India. According to the Ministry of External Affairs, India provided ₹4,500 crore for the 11th five year plan that lasted between 2013-18. The Hindu had reported on Friday that India is committed to supporting Bhutan’s next five-year plan to begin shortly.

Mr. Modi said that to share the benefit of the South Asian Satellite, Indian Space Research Organisation (ISRO) is moving ahead with plans to set up a ground station in Bhutan that will help in telemedicine, disaster relief and climate trends.

He welcomed the democratic process in Thimphu that led to the election of the new Prime Minister, Dr. Tshering who assumed office on November 7. He expressed confidence that the Mangdechhu hydro power project would be completed soon.

The visiting leader thanked his Indian counterpart for reaching out to him soon after the election victory and sought continued support in generation of hydro power. Dr. Tshering reiterated that hydro electricity is the main source of revenue for his country and negotiations to fix the tariff rates on major projects continue.

The statement is significant as it comes in the backdrop of reports of differences in the tariffs preferred by Delhi and Thimphu for the 720 megawatt Mangdechhu project, being set up with Indian collaboration. Bhutan reportedly wants a tariff of ₹4.40 per unit, while India expects ₹3.90 per unit. However, the Bhutanese leader indicated that the project is likely to begin in the next few months.

“If your schedule permits, please visit Bhutan as soon as possible,” Dr. Tshering said, inviting Prime Minister Modi. “ The Mangdechhu project hopefully will begin in the next few months and we will be honoured if Prime Minister Modi inaugurates the project.”

Mr. Modi said Bhutan will soon adopt the RuPay cards introduced by the Indian government earlier.