The Himalayan Triangle: Bhutan’s Courtship With India and China

Following its fourth parliamentary elections and the swearing in of a new government in January, those watching Asia’s geopolitical dynamics would be wise to turn their eyes to Bhutan, a tiny kingdom uncomfortably squeezed between the giants of China and India. How is this small state with limited strategic space and even fewer options to marshal agency balancing the competing interests of its two nuclear-armed great power rival neighbors?

To date, Bhutan does not have official diplomatic relations with China, while it maintains a “special relationship” with India. But the triangular relationship is not as simple as it might appear.

Bhutan shares a dilemma with most small states: How to achieve a favorable strategic geopolitical balancing act. It is not easy, but Bhutan has defied the traditionally accepted foreign policy wisdom that in such situations, a country would either balance or bandwagon. Nor has Thimphu resorted to pitching China and India against one another – a common temptation for smaller states. This nuanced approach arguably should be credited for the comparatively stable triangular relations between Bhutan-China-India in the critical Himalayan sphere.

With a narrow margin of error in Bhutan’s foreign policy posturing toward its powerful neighbors, Thimphu’s efforts to ensure predictable ties with China and India – and between them – are linked to its very survival. Thus, the country’s foreign policy pathways are navigated within the broader systemic constraints that the competitive and confrontational China-India relations pose.

Central to Bhutan’s bilateral and multilateral engagements is the driving force of China-India relations. They are not only powerful nations, but immediate neighbors whose state behaviors bear great implications for smaller nations on their periphery.

As China’s influence grows, Bhutan’s foreign policy perception has been changing. The idea of China as a South Asian geopolitical entity has become a reality; in that context, stable and normalized relations between Bhutan and China could improve Bhutan-China-India relations. China will get a clearer picture of Bhutan’s position in the triangle when Thimphu and Beijing can discuss issues directly.

It might be difficult for India to adapt to this changing dynamic, but such a change will serve its own security interest in the long run. A strong Bhutan with good relations with China will hugely reduce the strategic mistrust between China and India. Historically, practically, and geographically, the futures of Bhutan and India are intertwined. Given that Bhutan is on the southern Himalayas, its access to the world will always be easier through India. And Bhutan understands India more than any other country.

The biggest challenge facing Bhutan is to convince China and India that it will be sensitive to their security concerns, as it is difficult to balance their overlapping great power interests and ambitions. A distinguishing element in this challenge is India’s zealous approach to maintain Bhutan as its strategic backyard, while China thinks Bhutan must get out of India’s shadows and forge good relations with it as well.

India’s Interest

Traditional international relations doctrine states that nations do not have permanent friends or foes, only permanent interests. India’s core interest in Bhutan is permanent: to have perennial influence over the country to secure itself vis-à-vis China. This interest is a hangover of history; it is an offshoot of the British India frontier policy of the 19th and early 20th century, which sought to secure the Himalayan sphere against China and the expansionist Soviet Union.

The 1949 Indo-Bhutan Friendship Treaty, which required Bhutan to consult India in conducting its foreign policy, was revised in 2007. The new treaty requires the two countries to not allow their territory to be used against the other’s interest. This was a major development in the bilateral relationship, as the revision rebalanced the previously lopsided treaty.

The revision is especially significant because Bhutan was to transition to a democratic constitutional monarchy with an elected Parliament a year later, in 2008. The shift in political system made Bhutan more relatable to democratic India than the one-party communist state of China.

The loosening of treaty relations, which theoretically assured political and policy sovereignty, did not necessarily guarantee strategic autonomy for Bhutan. India’s interest in the country is an absolute geographical compulsion; India wants to preserve Bhutan as its buffer zone against China. Without a stable Bhutan on the southern Himalayas’ geopolitical map, India would be forced to contend with its powerful rival to the north on yet another front, with implications for its security and superpower dreams.

Some Western and Indian scholarship and media afford a lavish description: Bhutan is India’s ally. While Bhutan is a close friend of India, it is not India’s ally in the true sense of the word, because they do not have a security and defense pact. And Bhutan will never weaponize Bhutan-India relations to target a third party. This clarification should be one of the prisms to evaluate what Bhutan would want its relations with India to look like.

Given India’s competitive and confrontational relations with China, it does not want Bhutan to fall under Beijing’s influence. The Indian strategic community thinks Bhutan is in its strategic sphere of influence, which entails a high security stake in the country. Thus far, India has been able to preserve its interest in Bhutan primarily through economic diplomacy and the demonization of China.

India is Bhutan’s largest aid provider and the latter’s economy is highly integrated into the former’s, making it the biggest source of imports and destination for exports. Other critical yardsticks to look at India’s success in Bhutan vis-à-vis China include the fact that Bhutan is the only country in Asia that does not have formal diplomatic relations with China. Of China’s 14 land neighbors, Bhutan is one of just two, along with India, whose border demarcation with China has not been finalized.

This status quo, however, faces a possible challenge: The Bhutanese public may eventually realize that China is not as bad as India makes it out to be.

China’s Interest 

To the extent that China had any substantive political contacts with Bhutan through the first half of the 20th century, its interest in Bhutan (and Tibet) was to wall off the spreading influence of the British. China’s current Himalayan policy has not seen much deviation from that framework. It is similar to India’s Himalayan frontier policy. China’s and India’s contemporary Bhutan policies have their genesis in the overlapping interests of the British and Russian empires in the Himalayas.

China became the immediate neighbor of Bhutan following the integration of Tibet into the People’s Republic of China in the 1950s. Until then, they did not have much direct interaction. Since Bhutan and Tibet share contiguous land borders, the importance of Bhutan for China is tied to the strategic importance Beijing places on Tibet. The security of the Bhutan-China border is critical to China’s domestic political, regional, and western development strategies. Geopolitically also, a stable, strong Bhutan is good for China’s domestic security, as it will prevent any anti-China activities through its territory.

The core of China’s interest in Bhutan is its security concerns in the Himalayas, especially regarding the Tibet question and its strategy to penetrate into South Asia. Tibet is considered China’s “western treasure house” (the literal meaning of “Xizang,” the Mandarin name for Tibet) given its geopolitical significance and natural resources. Because of the geographical proximity and people-to-people links between Bhutan and Tibet, Bhutan assumes high importance to China’s Himalayan Peripheral Diplomacy, which is linked to its global development strategy and ambition.

Diving deeper, China’s Bhutan policy has a strong connection to all three levels of its policy paradigm: domestic, regional, and global. Beijing wants to wean the Himalayan buffer state away from its regional peer competitor’s influence. In the future, the sway of China’s demonization of India might increase in Bhutan and the South Asian strategic space.

Notwithstanding the limitations of official substantive political exchanges between Bhutan and China in the absence of formal diplomatic relations, social and trade relations have been deepening over the years. Regular contacts take place through China’s embassy in India. China was the third-largest source of tourists visiting Bhutan in 2019 (India is by far the largest source of tourists, followed by the United States) and hundreds of Bhutanese pilgrims visit Tibet every year. China is Bhutan’s second largest trading partner after India.

In the early 2000s, trade and people-to-people contacts between the two countries were almost non-existent. This shows China’s inroads into Bhutan have been incremental and expanding. These developments have a strong causal linkage to Bhutan’s receding threat perception of China. The improvement in Bhutan-China relations, especially since the 1980s, following the direct bilateral negotiations on their boundary issues, has intensified the Sino-Indian competition over Bhutan. China’s primary interest in Bhutan is to resolve the boundary issue and establish diplomatic ties to safeguard its security vis-à-vis India. 

The Strategic Importance and the Boundary Issue 

Bhutan does not bear much economic and commercial importance to the two global economic giants, but they know their influence over it is a highly prized geopolitical strategic good, given Bhutan’s buffering role and their intense strategic rivalry. Therefore, China and India’s strategic interests meet in Bhutan’s geography.

The geographical realities, historical perceptions of China, and compulsions of the existing Bhutan-China relations framework have tilted the Sino-Indian competition in favor of India’s influence in Bhutan. However, the China-India balance of power in Bhutan has been shifting, especially because of the positive momentum in the Bhutan-China boundary talks.

Both sides have agreed to expedite the processes to resolve the boundary issues by signing a Three-Step Road Map with the view to finally settle diplomatic ties. Described as one of the most successful negotiations, their 25th round of boundary talks in October 2023 was a testimony to the spirit and conviction of the Three-Step Roadmap. The meeting of the two foreign ministers in Beijing the same month was yet another milestone in the relationship.

Since the undemarcated China-Bhutan border is the heart of China-Bhutan-India relations, India’s response to any new developments on that front is predictable. India has highly securitized Bhutan’s borders and relations with China. Its primary interest will be to stop Bhutan from resolving its border issues with China, especially the western sector, involving the Doklam area.

From a security perspective, the Doklam plateau is a dagger pointing at the heart of India. Should China control it, Beijing could separate mainland India and its seven northeastern states. From India’s perspective, then, the ideal time to resolve the Bhutan-China border issue with minimal security implications for New Delhi would only be after resolving the China-India border dispute. This suggests that Bhutan’s lack of border demarcation with China is a sign of Thimphu’s solidarity with India. The Bhutanese stance on the border is looked at as indicative of India’s security and a strategic asset vis-à-vis China.

As China continues to rise, resulting in an increasing footprint in Bhutan, India’s strategy of preventing Bhutan from resolving its border issues with China and normalizing their relations will increasingly lose currency. The perception among Bhutanese, especially educated Bhutanese, of China is improving, and elected governments in Thimphu will face pressure to open up to Beijing substantively. India will have to come to terms with this reality.

A Delicate Balance

In the Bhutan-China-India trilateral relationship, Bhutan’s position is between a rock and a hard place – leaving a tightrope walk over the chasm as the only viable option. It is not only hard but risky because the danger of getting entangled in great rival power competition is real.

What does Bhutan actually need to balance?

To advance their foothold in Bhutan, China and India expound their own narratives. China protests that India is treating Bhutan as a protectorate while India accuses China of bullying Bhutan. Bhutan needs to balance these narratives to protect its own interests – its security, independence, and sovereignty. The idea of Bhutan being a protectorate is not relevant; the country’s international personality has always been sovereign and independent. And Bhutan does not share the perspective that it is being “bulled” by China. The theory of China as a threat to Bhutan has passed its sell-by date.

India’s biggest worry is Bhutan moving into the Chinese embrace, while China is concerned about India using Bhutan to act against China’s interest, especially on the Tibet question. India thinks that Tibet and Bhutan’s geographical proximity, as well as spiritual and cultural affinity, is part of its strategic value.

What is missing in this debate, however, is Bhutan’s voice. It is not in Bhutan’s interest to pitch China and India against each other. Its priority is to maintain neutrality. A former diplomat said Bhutan’s principal foreign policy goal is “to avoid getting in the crossfire” between China and India. Bhutan has long opted for hedging as its foreign policy toward its larger neighbors. It has to have a careful and innovative balancing act to respond to the Sino-Indian contest.

With the People’s Democratic Party forming the new government in Bhutan, there are speculations the country will be more pro-India, with implications for its balancing act. In geopolitics, such conjectures are common. But on the ground, the vagaries of political parties in power will have minimal impact on Bhutan’s relations with China and India. The country’s long-standing approach of maintaining neutrality and cultivating good relations will always inform its China-India policy.  

Balancing on the Border Issue

The Bhutan-China border issue determines the Sino-Indian geopolitical balance of power in the Himalayas. Any attempt to change the status quo risks causing China-India strategic mistrust to explode – as seen, for example, in the 2017 Doklam crisis.

In another recent development, however, Bhutan’s then-Prime Minister Lotay Tshering commented that China has an equal say in resolving the Doklam border issue. He said: “We are three. There is no big or small country, there are three equal countries, each counting for a third.” The comment must have spooked the Indian establishment and its strategic community, though no public official protest was made.

This means two things: India has gradually accepted that the Bhutan-China border issue cannot remain unresolved indefinitely; and the prospect of Bhutan-China formal diplomatic ties is inevitable. This acceptance will stabilize Bhutan-China relations, which could actually serve to reduce China-India mistrust.

Of the three sectors of the Bhutan-China border to be demarcated, Doklam is the most critical. Resolving this sector will most pressure Bhutan’s balancing act. During the 14th Bhutan-China boundary talks in 2000 in Beijing, Bhutan extended its claim line in Doklam. The new claim complicated the negotiations, which otherwise were progressing smoothly. Geopolitical pressure from India could have been the reason for Bhutan to extend its claim at that time.

It is important to imagine two scenarios: First, the possibility of resolving the Bhutan-China border issue independent of Doklam; and second, how to manage triangular relations if the joint verification team rules that the disputed Doklam area does not actually belong to Bhutan.

Is Bhutan afraid to cede Doklam to China? Did Bhutan really invite India to intervene in the 2017 Doklam standoff? Do all the three parties truly disagree on who has the rightful claim to the disputed Doklam area, or is this a game of geopolitical posturing? The answers to these questions must guide the ongoing Bhutan-China border negotiations.

The latest round of talks indicated the process was inching toward a final resolution. That, in turn, will eventually result in the establishment of Bhutan-China diplomatic relations. These questions and the possible future realities they suggest underpin Bhutan’s balancing posture. It has a narrow margin of error and limited agency to determine the after-effect of any China-India brinkmanship on the borders.

Conclusion

The journey of the Bhutan-China relationship is a success story. The two countries went from lacking any substantive contacts in the 1950s to now talking about stabilizing borders and establishing diplomatic relations. This encouraging momentum is because of the positive outcomes of successive Bhutan-China boundary talks, the development of a positive perception of China among Bhutanese, and growing trade and social relations. These developments will bring about trust, predictability, and stability in Bhutan-China-India engagements. A stable Bhutan-China relationship with transparent direct bilateral communications will reduce China-India strategic distrust, which currently distresses both Beijing and New Delhi.

As Bhutan’s relations with China develop, the greatest challenge will be to strike a balance that can avoid India’s ire. A clear Bhutanese position on triangular relations is useful. It may be an overstatement to say that China is in hurry to resolve border issues and establish diplomatic relations with Bhutan. As long as it gains the confidence of Bhutan, Beijing will be willing to wait for the mutual right timing. This nullifies some Western and Indian views that Beijing is impatient to normalize its relations with Bhutan.

One of the consequences of the long process of Bhutan-China border negotiations is Bhutanese people becoming more open to China, enabling it to make incremental inroads into the country. Thus, it is not in Beijing’s interest to push Thimphu to establish diplomatic relations because China knows that doing so could reverse the improvement in Bhutan’s perception of China. China will not do that unless it decides to alter its rules of engagement with its smaller neighboring countries. This would, however, be consequential to its peripheral diplomacy and global strategy more broadly.

In the future, the outcome of the ongoing Bhutan-China border negotiations will determine the kind of relations Bhutan will have to maintain and balance with both China and India. India knows that its unwillingness to support the Bhutan-China border resolution is not sustainable and will become a security challenge for itself in the long run. Bhutan’s balancing act should, therefore, be anchored on convincing India that a normalized Bhutan-China relationship is good for India’s security. It will reduce their strategic suspicion regarding an important buffer zone.

Even in the event of Bhutan and China establishing formal diplomatic ties, Bhutan will always have more and deeper engagements with India. This lever must be the source of India’s confidence and magnanimity. Thimphu has work to do to convince New Delhi that a strong India-Bhutan relationship is even more important for Bhutan than it is for India – and thus won’t be impacted by progress in Bhutan-China ties.