In-Depth | Why 'special friend' Bhutan has ended free travel for Indian tourists

Existing policy

Bhutan follows a ‘high value, low volume’ tourism policy. In other words, the Himalayan nation aims to attract only a few tourists each year while ensuring that they are high spending, Gautam Bambawale, a former Indian Ambassador to Bhutan, Pakistan and China, wrote in an op-ed.

The aim behind the policy is to ensure that the local people involved in the tourism industry make a decent living while abiding by its own very high environmental standards.

Under the policy, Bhutan has fixed that any foreign tourist has to shell out $250 per day which includes hotel, food, transportation as well as a Sustainable Development Fee (SDF) of $65 per day. The fee helps the Royal Government of Bhutan in its pollution-control efforts.

However, looking at the special and unique relationship between India and Bhutan, the latter did not levy this fee on tourists from India.

Why now?

As Bhutan's existing policy allowed visa-free for Indians, who were also not subject to the minimum expenditure floor of $250, the number of Indian tourists skyrocketed.

According to the annual report of Tourism Council of Bhutan (TCB), India is the main source of visitors to the country. In 2018, the regional arrival figure from India was 1,91,836, revealed data of the TCB.

Moreover, incidents of insensitive behavior of Indian tourists towards local customs and values have also been reported. In one such incident that happened in 2019, an Indian tourist climbed a 'chorten' to click a selfie which is anathema to the locals, who view these constructions as having religious significance.

Besides, as Indian vehicles are permitted to enter Bhutan without any hindrance, there have been instances of Indian drivers, who were not used to mountain roads, meeting with serious accidents.

The said incidents could also be a reason for the Bhutanese government to end the provision of free entry for Indian tourists into the country.

Although the government has levied an SDF on Indian tourists, it is still quite less compared to that for citizens of other countries, who have to pay $65 (Rs 4,629 approximately) along with a compulsory flat cover charge of $250 (Rs 17,803 approx) per day.

Does the new policy create any inconvenience to Indian tourists?

No, the Himalayan nation has assured that it will ensure Indians are not inconvenienced, Ministry of External Affairs Spokesperson Raveesh Kumar told media persons on February 6.

There is a discussion in the Bhutanese Parliament on the Tourism Levy and Exemption Bill of Bhutan 2020, Kumar added.

"There are some additional provisions for the tourists of this region. The fee that is being charged is for the upgradation of the tourism places. We have been assured by the Bhutanese government that during the implementation of the bill passed, no Indian will be inconvenienced," he said.

Will it lead to reciprocity?

Bhutan is a small nation with a total population of around eight lakh. It is a landlocked country whose main route to the outside world passed through India.

Now, if Bhutan levies charges on Indian tourists, will India also charge a similar fee from Bhutanese tourists  travelling to India?

No, it will not, given the bilateral relationships between the two countries, Ravish Kumar said.

As far as bilateral relationships are concerned, some are beyond reciprocity, and India-Bhutan ties are in that bracket, Kumar asserted.

How are the bilateral relationships between India and Bhutan?

The relations between India and Bhutan have always been peaceful and prosperous. The two countries have a strong historical, cultural, and economic relationship.

In 2007, India, under the UPA government, decided to amend the 1949 Treaty of Peace and Friendship, paving the way for Bhutan to act independently in foreign and defence affairs.

In 2014, when the BJP-led coalition under the leadership of Prime Minister Narendra Modi came to power, it considered strengthening ties with neighbouring countries as a major foreign policy priority.

It was apparent from the fact that the PM of Bhutan, along with other heads of the South Asian Association for Regional Cooperation (SAARC) nations, was invited for the swearing-in ceremony of the Modi government.

Subsequently, Modi had made his first foreign trip as a PM to Bhutan.

When the BJP was voted back to power in 2019, the heads of the BIMSTEC countries, including Bhutan, had attended PM Modi’s oath-taking ceremony.

Later that year, PM visited Bhutan for the second time as a PM on August 17-18, continuing India’s attempt to foster a strong relationship with its neighbours under the ‘Neighbourhood-First Policy’.

The two nations had also signed 10 Memorandums of Understanding (MoUs) to infuse new energy into their years-old ties.

During the visit, PM Modi had called Bhutan as a “special friend” of India.

He had also launched the RuPay Card, to facilitate Indian travellers to Bhutan by reducing the need to carry cash; at the same time boosting the Bhutanese economy, and further integrating the economies of both the countries.

PM Modi had announced that an additional $100 million would be available to Bhutan under a stand-by swap arrangement to meet the foreign exchange requirement.

Recently, PM Modi said that India cherishes its "very special friendship" with Bhutan while responding to Bhutan Prime Minister Lotay Tshering's Republic Day wishes to India.

He further expressed confidence that ties between the two countries will continue to deepen in the future.

“You have wonderfully highlighted the unbreakable bond between our nations. India cherishes the very special friendship with Bhutan and I am sure our ties will continue to deepen in the times to come," PM Modi tweeted.

In his message, Tshering had said that Bhutan has drawn "immense inspiration" from India's journey over the decades.

"Dear friends in India and beyond, in your journey over the decades, we have drawn immense inspirations. In your friendships, we sought courage. In your magnanimity, we have solicited confidence," he had said.

The high-level political visits and exchanges between the two countries have since become a strong pillar of India-Bhutan ties.

Effects of levying a Sustainable Development Fee (SDF) on Indian tourists

The reported levying of SDF has its own benefits and losses. SDF goes directly to the Bhutan government coffers as direct revenue.

The gross earnings from tourist arrivals in 2018 were reportedly estimated to be $85.41 million, an increase of around 7 percent compared to 2017. Of which, $26.29 million was direct revenue for the government through SDF, visa fees and 2 percent TDS.

The levying of the fee will surely reduce the number of tourists, but it will help increase revenue from SDF for the Bhutanese government.

On the other hand, the move, which is also being seen as a measure to reduce the footfall of Indian tourists, will reduce the business of budget hotels, which have sprung up recently to accommodate an increasing number visitors from India.

The chairman of Bhutan's hotel and restaurants association, Sonam Wangchuk, voiced fears that the newly-built budget hotels accommodating the surge in Indian visitors would now go into losses.

"We have shared our concerns and sentiments with the government. Despite that, they still went ahead with the decision," Wangchuk told news agency AFP.

However, Tandi Dorji, Bhutan’s foreign minister and Tourism Council head, was quoted as saying that the government would consider fiscal incentives if the new fee affected the hotel sector.