New Delhi, February 18 – Bhutan's Prime Minister Tshering Tobgay thanked Prime Minister Narendra Modi on Wednesday for India's support for Bhutan's 13th Five-Year Plan, as well as the Gelephu Mindfulness City Project.
Both leaders also reviewed progress in bilateral cooperation in several key sectors, including energy, connectivity, development partnership, and people-to-people connect, during their meeting held on the sidelines of the India-AI Impact Summit in New Delhi.
As they reaffirmed their commitment to advance cooperation in priority areas of energy, connectivity, and development partnership, the two leaders reviewed progress in diverse areas of cooperation, building on the outcomes of Prime Minister Modi's highly successful visit to Bhutan in November 2025.
"The meeting with Prime Minister Tshering Tobgay was outstanding. We discussed how we can harness the power of AI for global good and in harmony with principles of sustainability. Our enduring India-Bhutan friendship, rooted in mutual trust, goodwill, and close ties between our two peoples, continues to guide our partnership into new and transformative domains," Prime Minister Modi posted on X after the meeting.
According to the Ministry of External Affairs (MEA), in keeping with the high emphasis placed on harnessing new technologies for growth and prosperity by both countries, the two leaders agreed to strengthen cooperation in the field of AI and digital technology through mutual sharing of experience and expertise as well as joint development of AI solutions.
They also reaffirmed their commitment to work closely to further strengthen the India-Bhutan partnership, anchored in trust, goodwill, and mutual respect.
India and Bhutan share a tradition of regular high-level exchanges and continue to explore new avenues of cooperation, while building on their deep-rooted ties in energy, infrastructure, and cultural exchange.
Last November, Prime Minister Modi visited Thimphu on a two-day visit aimed at deepening the India-Bhutan partnership and reinforcing India's commitment to its "Neighbourhood First" policy.
Prime Minister Modi's visit coincided with the exposition of the Sacred Piprahwa Relics of Lord Buddha from India. He also offered prayers to the Holy Relics at Tashichhodzong in Thimphu and participated in the Global Peace Prayer Festival organised by the Royal Government of Bhutan.
The visit also marked another major milestone in the India-Bhutan energy partnership with the inauguration of the Punatsangchhu-II hydropower project.
"The basic framework of India-Bhutan relations is the Treaty of Friendship and Cooperation signed in 1949 between the two countries, which was renewed in February 2007," the MEA has stated.
The India-Bhutan Agreement on Trade, Commerce and Transit -- which was first signed in 1972 and revised most recently for the fifth time in 2016 -- establishes a free trade regime between the two countries. The Agreement also provides for duty-free transit of Bhutanese exports to third countries. Bilateral trade is conducted in Indian Rupees, which is at par with the Bhutanese Ngultrum.
India is Bhutan’s top trade partner, both as an import source and as an export destination. Since 2014, India’s trade with Bhutan has increased more than three times – from $484 million in 2014-15 to $1,777.44 million in 2024-25, accounting for over 80 per cent of Bhutan’s overall trade. Throughout this period, the balance of trade has consistently remained in India’s favour.
India's major exports to Bhutan include petrol and diesel, rice, wood charcoal, coke and semi-coke, ferrous products obtained by direct reduction of iron ore, maize (excluding seed), soya-bean oil, smartphones, and iron or steel structures and parts, among others.
On the other hand, India's key imports from Bhutan consist of electricity, ferro-silicon, dolomite chips, ferro-silico-manganese, Portland pozzolana cement, pebbles and gravel, dolomite slabs, semi-finished iron or non-alloy steel products, beer made from malt, and ordinary Portland cement.