India-Bhutan Rail Link Gains Global Geopolitical Lens

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While India navigates the impact of U.S. tariffs and negotiates global trade deals, the country strengthens regional ties with Bhutan through a historic $455 million rail project boosting trade and tourism.

By TRH Foreign Affairs Desk

New Delhi, October 22, 2025 — India’s decision to link up with Bhutan with rail network is gaining global spotlight for inherent geopolitical significance. Nikkei Asia in a weekly newsletter examined the significance of the India-Bhutan rail link, calling it a “Diwali Gift” to the Himalayan kingdom.

The Tokyo-based media outlet argued that the rail link between India and Bhutan will help the hilly nation modernize and gain the benefits from the Indian market integration.

“This Diwali, while millions in India celebrated the festival of lights, the nation’s strategic ambitions were quietly illuminated on another front. Amid the backdrop of US tariffs hitting Indian exports and negotiations for trade agreements with the UK, EU, and ASEAN, India has taken a decisive step to strengthen ties with its Himalayan neighbour,” wrote the Japanese outlet.

New Delhi and Thimphu recently signed a pact to establish two rail lines spanning 89 kilometers, a combined $455 million investment fully funded by India. “For Bhutan, this marks its first-ever railway, a transformative project that promises to boost trade, tourism, and regional connectivity,’ added the outlet.

It further noted that while Indian exporters felt the pinch of US President Donald Trump’s 50% tariffs on key goods and Russian oil imports, New Delhi is leveraging diplomacy and infrastructure to secure long-term economic resilience. “As India navigates global trade tensions, the India-Bhutan rail link represents a tangible win for bilateral cooperation, showing that strategic investment and regional engagement can complement global trade efforts,” added the Japanese outlet.

For Bhutan, wrote the outlet, the announcement is nothing short of a Diwali gift, “illuminating a path toward modernization, connectivity, and shared prosperity with its larger neighbour.” The decision of India to establish rail links with Bhutan has come amid China pushing ahead with works on railways in Nepal.

“In the dance of geopolitics and commerce, India has chosen both celebration and strategy as it lights the way forward,” added the Japanse daily.

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