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C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 002137 
 
SIPDIS 
 
DEPT FOR SCA/INS, DRL 
EEB FOR STEVEN MANN, CAS DHENGEL, SGALLOGLY, PHAYMOND, 
MMCMANUS, SCOULTER 
DEPT OF ENERGY FOR A/A/S KFREDRIKSEN, GBISCONTI, TCUTLER 
 
E.O. 12958: DECL: 08/05/2018 
TAGS: PGOV PHUM PREL PINR KDEM IN BT INR ENRG
EAID, ELTN 
SUBJECT: INDIA WELCOMES BHUTANESE PM ON FIRST TRIP ABROAD 
 
Classified By: Political Counselor Ted Osius for Reasons 1.4 (B and D) 
 
¶1. (U) Summary. Bhutan's first democratically elected Prime 
Minister (PM) Jigmi Y. Thinley visited India July 14 - 17. 
The four-day visit to Delhi marked Thinley's first trip 
abroad after assuming power in April.  Thinley met with 
Indian PM Manmohan Singh and other officials to continue the 
dialogue initiated during Singh's May visit to Bhutan. 
Collaboration on hydropower projects topped the agenda, 
followed by development aid, increased infrastructure, 
health, and tourism.  According to the Bhutanese embassy in 
New Delhi, the Bhutanese PM characterized the trip as a 
"routine goodwill visit," but the pomp and press displayed by 
both sides announced that India remains Bhutan's closest 
ally.  End Summary. 
 
Age-Old Allies 
-------------- 
 
¶2.  (U) On July 29, Poloff met with Bhutanese Embassy First 
Secretary Tenzin Rondel Wangchuk to discuss the recent visit 
of the Bhutanese Prime Minister (PM) to Delhi.  True to the 
pledge he made upon entering office, Prime Minister Jigmi Y. 
Thinley made his first state-level visit outside of Bhutan to 
India July 14 - 17.  The Indians received the PM and his 52 
member delegation with the pomp befitting a head of state as 
Thinley met with PM Manmohan Singh, President Pratibha Patil, 
Vice President Hamid Ansari, External Affairs Minister Pranab 
Mukherjee, Home Minister Shivraj Patil, Congress Party 
President Sonia Gandhi, Leader of the Opposition L.K. Advani, 
Power Minister Sushil Kumar Shinde, Tourism Minister Ambika 
Soni, and Deputy Chairman of the Planning Commission Montek 
Singh Ahluwalia.  According to Wangchuk, the PM had "no 
specified agenda" and the visit was a "routine" gesture to 
express Bhutan's gratitude to its oldest and most trusted 
ally.  The discussions followed the agenda set when PM Singh 
-- the first leader to visit the new democracy -- visited 
Thimpu in May.  Both sides promoted the visit as a further 
step in boosting economic cooperation and contributing to 
overall Indo-Bhutan relations. 
 
¶3. (U) Wangchuk noted that the Royal Government of Bhutan's 
(RGOB) 10th five-year plan -- which began on July 1 -- drove 
the discussion, as India is Bhutan's largest development 
partner.  The five-year plan broadly outlines Bhutan's social 
and economic development strategy, from energy to 
infrastructure to scholarships.  He contended that formal 
details of the GOI's assistance to Bhutan were still fluid, 
but disclosed that the GOI had historically doubled or even 
tripled the amount of aid given to Bhutan with each 
successive five-year plan.  Consistent with media reports, 
Wangchuk predicted that GOI would double the amount of aid 
given to Bhutan, bringing the total to approximately USD 826 
million. 
 
Megawatts for Manmohan 
----------------------- 
 
¶4. (U) As expected, Wangchuk reported that hydroelectric 
power was the main issue on the table.  The GOI and the RGOB 
had earlier agreed on a target amount for exportable energy 
to India at a capacity level of 5,000 MW by 2020.  During PM 
Thinley's visit, the countries doubled the target to 10,000 
MW -- admittedly a "quite ambitious" goal given the current 
capacity is only 1,488 megawatts.  Wangchuk disclosed that in 
order for Bhutan to take advantage of India's enormous energy 
needs, it must act quickly as the glacial source of its 
hydropower is quickly melting.  The GOI committed to boost 
infrastructure for the project through a mix of grants and 
credits to the RGOB.  He signaled that the percentage of 
 
NEW DELHI 00002137  002 OF 003 
 
 
credits has increased over the past several years and he 
expects that trend to continue.  Wangchuk admitted that 
Bhutan lacks the technical capacity to construct the 
hydroelectric plant; consequently, Indian contractors with 
the appropriate expertise, hired by the RGOB, will handle the 
construction projects.  He added that the agreement includes 
transfer of knowledge offsets, requiring the GOI to establish 
specialized industrial training institutes in Bhutan so that 
eventually the Bhutanese will take over project maintenance. 
The institutes bring the added bonus of boosting Bhutan's 
skilled labor force in the midst of rising unemployment 
rates. 
 
GOI's Golden Jubilee 
-------------------- 
 
¶5.  (SBU) India's development assistance to infrastructure 
figured prominently in discussions between PM Thinley and 
Deputy Chairman of the Planning Commission Montek Singh 
Ahluwalia.  In 2005, India and Bhutan signed a memorandum of 
understanding to establish a railway between Hashimara, India 
and Phuentsoling, Bhutan. According to Wangchuk, the 
resulting feasibility study revealed significant problems; 
however, he said the governments decided to proceed anyway 
with the construction of a freight line, dubbed the Golden 
Jubilee Rail Line.  The line's construction commemorates the 
50th anniversary of Prime Minister Nehru's month-long visit 
to the Himalayan nation.  He underscored the railway's 
commercial importance for the land-locked country, noting 
that the transportation of cash crops, such as oranges and 
apples, would become much less expensive for Bhutan.  The 20 
kilometers of rail will link Bhutan to the entire Indian 
railway network.  Wangchuk emphasized that it would not be a 
passenger line and that he could not hazard a guess on the 
timeline for construction.  When asked about border security 
issues, he remarked that the Indo-Bhutan border remains open 
and fairly sleepy, "except when someone decides to throw a 
bomb over the border." 
 
 
Medical Schools for Indian Students 
----------------------------------- 
 
¶6.  (C) Wangchuk intimated that the GOI's proposal for 
further cooperation in the medical field came as a surprise 
to the Bhutanese embassy.  The GOI offered to finance the 
construction of a more specialized medical college modeled 
after the All India Institute of Medical Sciences (AIIMS) in 
Thimpu.  India also raised the possibility of building a 
nursing school in addition to the two Indian-financed 
hospitals already under construction.  Wangchuk asserted that 
it would be impossible for Bhutan to absorb all the graduates 
given that the demand for western-trained practitioners is 
not high in a country with a well-organized network of 
traditional medicine facilities. Given the incredible 
competition for entrance to Indian medical schools, he 
confided that the Bhutanese suspect the construction offer is 
really intended to provide an alternative for Indian 
students; regardless, Bhutan will accept the gift. 
 
¶7. (C) Comment.  The meetings between the world's youngest 
and largest democracies proceeded as expected and further 
solidified -- with impressive media coverage -- India's 
position as Bhutan's best friend. Bhutan has always had 
excellent relations with India, regardless of the ruling 
coalition due to the RGOB's very strong relationship with 
India's bureaucracy.  In the upcoming months, as Bhutan's new 
government begins to further define itself and face the 
courtship of many countries requesting formal diplomatic 
relations, the reaction of India's bureaucracy will bear 
 
NEW DELHI 00002137  003 OF 003 
 
 
watching as will the Bhutanese response.  End Comment. 
WHITE