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Key Takeaways
Sandeep Arya, Indian Ambassador provided a cheque of ₹250 crores to the Foreign Minister of Bhutan on June 25, 2026, who is Lyonpo D.N. Dhungyel. This was the 5th installment under India's Economic Stimulus Programme for Bhutan.
India has now disbursed ₹1,250 crore of its total ₹1,500 crore ESP commitment under Bhutan’s 13th Five-Year Plan, which runs from 2024 to 2029. On the same day, Arya also handed over 3 separate cheques totalling ₹46.4 crore for education and skilling work.
Foreign Minister Dhungyel said the ESP has helped revive Bhutan’s post-pandemic economy and generate employment. Farmers, students, youth, SMEs, startups, the creative industry, and the tourism sector have all seen its impact, he said.
India also approved a separate ₹250 crore for Bhutan’s National Fuel Price Smoothening Framework, which has cushioned the blow of rising global fuel prices on the Bhutanese economy.
Ambassador Arya said India has been releasing funds under the 13th Five-Year Plan on time. This covers project assistance, ESP, high-impact community development projects, and programme grants.
Of India’s total ₹10,000 crore pledge for Bhutan’s 2024-2029 plan, ₹3,400 crore has been released within the first 2 years. Bhutan’s 2026-27 budget shows over 30% of its capital expenditure will come from Indian grants.
According to LoansJagat’s coverage of India’s lending data, MSME credit in India grew 18.3% year-on-year as of June 2025. Micro and small firms led at 19.8% growth, as per the Department of Economic Affairs’ Monthly Economic Review for August 2025. Bhutan’s ESP directly targets this same segment of SMEs, startups, and small traders. India is essentially running parallel SME credit expansion at home and abroad at the same time.
India still has ₹250 crore left to disburse under the ESP before the 13th Five-Year Plan ends in 2029. Over 30% of Bhutan's entire 2026-27 capital budget now depends on Indian grants. That number, more than anything, shows how deep the financial dependency runs.
Why does India provide Bhutan with ₹1,500 crore under the Economic Stimulus Programme?
India has provided ₹1,500 crore in favor of Bhutan under Economic Stimulus Programme of its 13th Five-Year Plan. It aids in increasing jobs, business, tourism, agriculture, and economy recovery due to the coronavirus.
Why did India also provide ₹250 crore for Bhutan fuel subsidy?
India approved a separate ₹250 crore to help Bhutan manage rising global fuel prices. The support reduces the impact of fuel cost increases on the country's economy and consumers.
