History of relations - INSIGHTSIAS

India’s relations with Bhutan go back to 747 AD when a Buddhist monk Padmasambhava went from India to Bhutan and led the Nyingmapa sect of Buddhism. Thus, India contributed to the cultural growth of Buddhism in Bhutan.
In the modern times, there was Anglo–Bhutan wars and Bhutan became a part of British Empire.
In 1910, as per the Treaty of Punakha, between China–Tibet and Bhutan, Bhutan was not officially annexed but the legal status of Bhutan itself remained undefined.
Bhutan was given an option by the British to remain independent or join the Indian Union. Bhutan chose to remain independent.
When India became independent in 1947, Nehru went to Bhutan to build relations.
Bhutan also preferred India over China as, in 1949, when China took over Tibet, it did create tensions and fears of annexation in Bhutan.
Amid growing security concern over communist China, Indo-Bhutan Treaty was signed in August, 1949.
This is known as Treaty of Peace and Friendship and was signed in Darjeeling. It is continuation of Anglo-Bhutanese Treaty of 1910.
The treaty discusses peace, trade, commerce and equal justice between India and Bhutan.
India accepted the sovereign and independent status of Bhutan but advised that Bhutan, in matters of external affairs, seek assistance from India.
India did not interfere in internal affairs of Bhutan and in fact, in 1971, took up the matter of UN membership for Bhutan. The Indo–Bhutan treaty is the bedrock of India and Bhutan’s relationship.
However, in February, 2007, it was revised, which clarifies Bhutan’s status as an independent and sovereign nation.