New Delhi. Prime Minister Narendra Modi arrived in Bhutan on Tuesday for a two-day state visit to India. KATHMANDU: Prime Minister KP Sharma Oli and Bhutan’s King Jigme Khesar Namgyel Wangchuck jointly inaugurated the mega Puntsangchu-2 hydropower project. This project is one of the largest in Bhutan. It has a generating capacity of 1,020 MW.

Bhutan, known as a carbon-negative country, has made significant progress in the hydropower sector in recent years. It generates huge revenues by exporting electricity to countries with high demand for energy, such as India, while harnessing its abundant water resources. It has also been using cheap and environment-friendly electricity in the country for cryptocurrency mining.

“This visit will further strengthen the successful energy partnership between India and Bhutan and add another historic milestone in our relationship,” Modi said in his pre-departure statement. ’

He said his visit will further deepen ties with Bhutan and is a key pillar of India’s ‘Neighbourhood First’ policy.

The relationship between India and Bhutan is based on mutual trust and cooperation. India accounts for more than 80 percent of Bhutan’s total trade. According to India’s commerce ministry, the total trade between the two countries will reach USD 1.78 billion in 2024-25. According to the Bhutanese Embassy in New Delhi, hydropower exports account for nearly two-thirds of Bhutan’s total exports.

Last year, India exported goods worth $1.3 billion to Bhutan, including petroleum products, iron and steel, grains and smartphones. During the same period, Bhutan exported goods worth $513 million to India, including electricity and construction materials.

In September, India announced the construction of its first cross-border railway to Bhutan, aiming to boost physical infrastructure connectivity between the two countries. It is believed to bring the economic and people-to-people relations between the two countries closer.

Bhutan has been prioritizing ‘Gross National Happiness’ as a measure of development. However, those policies have failed to fully address the challenges of widespread unemployment, forcing thousands of young people to leave the country in search of employment opportunities.

According to the World Bank, Bhutan’s per capita GDP is currently around $3,718. The hill state is currently trying to diversify its economy. Taking advantage of its abundant hydropower resources and cold climate, Bhutan has taken the lead in cryptocurrency mining by setting up a large number of computer farms.

Druk Holding & Investments, a state-protected entity, started operating the cryptocurrency in 2021-22 with an investment of about $539 million – equivalent to one-fifth of Bhutan’s GDP. Since then, Bhutan has reportedly amassed a large amount of crypto assets, but the exact value has not been disclosed.

Prime Minister Modi’s visit is expected to further strengthen India-Bhutan relations and open new doors for energy, trade and technology cooperation between the two countries.