India is Bhutan’s largest trade and development partner, providing significant amounts of foreign aid and investment. Traditionally, the 1949 Treaty of Peace and Friendship governed relations between the countries. In February 2007, India and Bhutan signed a new treaty removing the clause that India will “guide” Bhutan’s foreign policy and allowing Bhutan to purchase military equipment from other countries. However, bilateral ties remain close, demonstrated by Indian Prime Minister Manmohan Singh’s May 2008 visit to Thimpu during which he addressed the newly elected parliament. Prime Minister Jigme Thinley returned the gesture when he made his first official trip abroad as prime minister to New Delhi in July 2008; King Jigme Khesar Namgyel Wangchuck also visited India in December 2009.
In recent years, insurgents on the Indian side of the border from the United Liberation Front of Assam (ULFA) and the Bodos have used Bhutan as a safe haven. In December 2003, Bhutan military troops expelled Indian insurgents from Assam. Through this joint effort with India, Bhutan strengthened border security and continued cooperation with the Indian military.