International Relations
India Extends ₹4,000 Crore Line of Credit to Bhutan
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· International Relations
India Extends ₹4,000 Crore Line of Credit to Bhutan
India extended a fresh Line of Credit worth ₹4,000 crore to Bhutan, announced on 1 August 2026, reinforcing longstanding bilateral development cooperation between the two Himalayan neighbours.
Background
India has historically been Bhutan's largest development partner, funding Five-Year Plans, hydropower projects, and infrastructure through grants and concessional Lines of Credit, reflecting close strategic and cultural ties.
Key Highlights
- The ₹4,000 crore LoC supports Bhutan's ongoing development priorities.
- India-Bhutan cooperation spans hydropower, infrastructure, education, and connectivity projects.
- The announcement reflects continuity in India's "Neighbourhood First" policy.
TNPSC Relevance
India's bilateral relations with neighbouring countries, foreign aid mechanisms, and "Neighbourhood First" policy are relevant to the International Relations section of TNPSC exams.
Static GK Links
- India and Bhutan share a "Treaty of Friendship," last renewed in 2007.
- Major India-assisted hydropower projects in Bhutan include Chukha, Tala, and Punatsangchhu.
Exam Notes
Memory tip: India = Bhutan's largest development partner; cooperation anchored by the India-Bhutan Treaty of Friendship (2007).
TNPSC MCQs
| No. | Question | Answer |
|---|---|---|
| 1 | How much Line of Credit did India extend to Bhutan, announced 1 August 2026? | ₹4,000 crore — Explanation: Reinforcing bilateral development cooperation. |
| 2 | India's policy prioritising ties with immediate neighbours is called? | Neighbourhood First policy — Explanation: Guides India's engagement with countries like Bhutan, Nepal, and Bangladesh. |
| 3 | The India-Bhutan Treaty of Friendship was last renewed in which year? | 2007 — Explanation: It forms the bedrock of India-Bhutan strategic relations. |
Written by: Janani — Content Editor, TNCareerHub
Published:
Updated:
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