Why has tiny Bhutan managed to stay independent between India and China?

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This is the script for my video posted on June 5, 2026. Watch it on TikTok.

Tucked between India and China is a tiny Buddhist kingdom best known for its monasteries, fortresses, and incredible Himalayan landscapes. Bhutan has only about 800000 people, but its critical position with India and China has made it disproportionately important in the realm of geopolitics. So why has such a small country managed to stay independent between two major powers, and what impact does Bhutan actually have on the world?

In the 7th century CE, Bhutan was an isolated region buried deep in valleys of the Himalayas. But when the Tibetan king Songtsen Gampo, who had converted to Buddhism, expanded the Tibetan Empire into Bhutan, he ordered the construction of two Buddhist temples. In the 13th and 14th centuries, much of modern China came under Mongol rule under Kublai Khan and his descendants, the dynasty we now call the Yuan, and the Mongols had close ties with Buddhists in Bhutan and Tibet because they practiced similar forms of the religion. But when Mongol influence declined in the 14th century, several competing Buddhist sects competed for supremacy in the region, and ultimately the Drukpa lineage of Tibetan Buddhism won out.

This is important because in the 17th century, a direct descendant of this lineage, a man named Ngawang Namgyal, was set to be enthroned as the incarnation of the Drukpas when one of his illegitimate relatives organized a parallel enthronement. Even with the rival claim, Ngawang Namgyal stayed in Tibet as head of the lineage until he was threatened by his rival and fled to Bhutan. There, he unified the warring fiefdoms and repelled invasions from Tibetan forces, and he established a system called Chhoesi where the spiritual head of the Drukpas ruled alongside a secular figurehead. The Drukpa Kagyu school of Buddhism is the modern Bhutanese state’s religious foundation. Ngawang Namgyal deliberately built a distinct identity separate from Tibet that persisted even during the country’s wars with the British during their siege of South Asia in the 18th and 19th centuries.

In 1907, the penlop or governor of Bhutan’s province of Trongsa consolidated power, in part by collaborating with the British, and was elected the first hereditary Druk Gyalpo, or Dragon King. King Ugyen Wangchuck officially ended the Chhoesi system’s secular side and began the Wangchuck dynasty that rules to this day. In 1910, he signed the Treaty of Punakha, where Britain agreed to double their subsidies to Bhutan and avoid interfering in the country’s internal administration in exchange for Bhutan agreeing to be guided by British advice. This made Bhutan a de facto British protectorate while also affirming it as one of the few Asian states never to be actually colonized.

In 1949, not long after the partition of British India into India and Pakistan, Bhutan signed a treaty of friendship with India, whose language largely mirrored the Treaty of Punakha. Just a year later, this became extremely important because China annexed Tibet, placing Chinese troops immediately on Bhutan’s border. This sets the stage for the present day.

In 2007, India and Bhutan revised the treaty to require close cooperation on issues relating to their national interests, and to bar both parties from using their territory for activities that are harmful to the national security and interests of the other. It also removed the previous requirement for Bhutan to obtain Indian approval for arms imports. Today the two countries are heavily integrated. India funds Bhutanese hydropower projects and imports much of the electricity they produce. Hydropower is the country’s economic backbone but also a strategic vulnerability due to overreliance. India accounts for over 80% of Bhutan’s total trade, and the Bhutanese ngultrum is pegged 1:1 to the Indian rupee, entwining the two countries’ economies. The Indian military trains Bhutanese soldiers, and since Bhutan doesn’t have a defense minister, the commandant of the Indian Military Training Team acts as a military advisor to the king of Bhutan.

Meanwhile, Bhutan and China share nearly 500km of un-demarcated border and have no diplomatic relations despite dozens of rounds of boundary talks. There are several disputed areas, and one of them sparked a diplomatic crisis in 2017 when the Chinese military began extending a road on the Doklam plateau, which overlooks the very thin Siliguri Corridor that connects mainland India to its northeastern states. India sent troops to halt construction, resulting in a 73-day standoff that ended when both sides agreed to disengage, though China retained control of the plateau and later expanded infrastructure across the broader area. Satellite imagery analyzed by outside researchers shows China has built villages in disputed territory that Bhutan has historically claimed, though neither government has officially confirmed it. In 2021, Bhutan and China signed a memorandum of understanding on a three-step roadmap to expedite border negotiations, but as of now no final boundary agreement has been reached despite 25 rounds of talks.

China is pushing Bhutan to establish diplomatic relations with it. But interestingly, Bhutan has no formal ties with any of the UN Security Council’s permanent members, which also include the US, the UK, France, and Russia. It’s in India’s interest to keep Bhutan from engaging diplomatically with China as well, and the two countries’ strong economic and military ties have been incredibly valuable to that end.

But the truth is, there’s a reason you haven’t heard much about Bhutan. Since the 1970s, the country’s royals have used Gross National Happiness as a key development metric, built on sustainable development, environmental conservation, cultural preservation, and good governance. In 2006, the country’s fourth king voluntarily abdicated in favor of his son, who adopted a written constitution enshrining Gross National Happiness and transitioning from an absolute monarchy to one with a parliament, in a rare case of a monarch pushing for democratization. Bhutan is widely cited as the world’s first carbon-negative country, meaning it gets rid of far more carbon than it emits.

Its image is also complicated by a darker chapter: in the late 1980s and early 1990s, Bhutan expelled roughly a sixth of its population, ethnic-Nepali Bhutanese the state treated as illegal immigrants, in what human rights groups call ethnic cleansing. Most ended up in refugee camps in Nepal and were later resettled, mostly in the United States. Today the country also faces youth unemployment and the migration of professionals to better-paying countries.

Bhutan is defined by its relationship with its far more powerful neighbors. Its prosperity and its very existence rely on support from India, while China continues to exert pressure on its surroundings. If India’s support diminished for whatever reason, if it had more to lose than to gain from the dynamic, or if Bhutan moved closer to China, Bhutan could wind up in a precarious position, and that’s the thing to pay attention to.

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