India and Bhutan have signed a ₹4,000-crore concessional Line of Credit (LoC) to strengthen bilateral development cooperation and support Bhutan’s 13th Five-Year Plan (2024–29). The agreement, signed during the Fifth India-Bhutan Development Cooperation Talks in Thimphu, reinforces the two countries’ close strategic partnership with a focus on energy, healthcare, sustainable development, and green mobility.

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• India and Bhutan signed a ₹4,000-crore (Nu 40 billion) concessional Line of Credit (LoC) on 31 July 2026 during the Fifth India-Bhutan Development Cooperation Talks held in Thimphu, Bhutan.
• The agreement was exchanged between the Export-Import Bank of India (EXIM Bank) and Bhutan’s Ministry of Finance. The concessional financing will primarily support energy sector projects under Bhutan’s 13th Five-Year Plan (2024–29).
• India reaffirmed its broader commitment of ₹10,000 crore for Bhutan’s development programme, which includes Project Tied Assistance, High Impact Community Development Projects, the Economic Stimulus Programme, and Programme Grants.
• A Line of Credit (LoC) is a concessional financing mechanism through which India provides financial assistance to partner countries for infrastructure, connectivity, energy, and other development projects. These credit lines are administered through the Export-Import Bank of India.
• Alongside the financial agreement, the All India Institute of Medical Sciences (AIIMS) and Bhutan’s Khesar Gyalpo University of Medical Sciences signed a Memorandum of Understanding (MoU) to promote collaboration in medical education, research, and healthcare capacity building.
• India also handed over 45 electric vehicles to Bhutan to support the country’s green mobility initiatives, reflecting the shared commitment of both nations towards sustainable and environmentally friendly transportation.
• The Development Cooperation Talks reviewed the implementation of ongoing bilateral projects and explored new areas of cooperation in renewable energy, healthcare, education, infrastructure, and capacity building, reaffirming the special relationship between the two neighbours.
• India and Bhutan share a unique partnership founded on mutual trust, close political engagement, economic cooperation, and people-to-people ties. Development assistance remains one of the key pillars of this relationship, with India continuing to be Bhutan’s largest development partner.