The European Union (EU) and Bhutan share a longstanding and robust partnership built on a mutual commitment to a rules-based international order. Their collaboration focuses on fostering good governance and democratic values, combating climate change, promoting gender equality, and advancing poverty reduction and sustainable development.

EU-Bhutan cooperation began in 1982 with a development project on renewable natural resources. Diplomatic relations were formally established with the Royal Government of Bhutan in 1985. In 2004, annual consultations replaced biennial meetings, creating a structured platform for dialogue on political and economic development, trade relations, governance, human rights, climate change, and development cooperation. The 12th Annual Consultations were held in Brussels on 9 September 2024.

The EU Ambassador to India is concurrently accredited to Bhutan, while Bhutan maintains an embassy in Brussels, accredited to the EU and several EU Member States. Regular visits by the EU Ambassador to Bhutan, often jointly with EU Member State Ambassadors, provide opportunities for in-depth discussions to further strengthen the EU-Bhutan partnership. The most recent joint visit took place from 28 September to 2 October 2024, marking the largest EU Heads of Mission (HoMs) delegation to Bhutan in recent years, with representatives from 17 EU Member States and the EU itself.

The EU considers Bhutan a "development success story," with decreasing poverty, peaceful democratization, and responsible stewardship of culture and environment, resulting in improved human development indicators. 

The EU is Bhutan's third-largest donor after India and Japan. The partnership was further strengthened with the signing of a Framework Agreement between the Royal Government of Bhutan (RGoB) and the European Investment Bank (EIB) in November 2020, ratified by Bhutan’s Parliament in March 2021. This agreement enables the EIB to finance sustainable physical and social infrastructure projects that respond to the needs identified by the Bhutanese government and its private sector counterparts.

In April 2024, Bhutan signed its first EIB loan agreement worth EUR 150 million to support solar power and small hydro investments, underlining the EU’s commitment to Bhutan’s socio-economic transformation, following its graduation from Least Developed Country (LDC) status to Middle-Income Country on 13 December 2023. The EU has also provided a technical assistance grant to enhance Bhutan’s energy sector and advocated for the EIB’s development branch, EIB Global, to support MSMEs/SMEs impacted by COVID-19, fostering resilience and competitiveness in Bhutan's economy.

Bhutan also benefits from the Neighbourhood, Development, and International Cooperation Instrument (NDICI-Global Europe) of the EU, receiving EUR 31 million in grants for 2021-2024. This support extends to climate change, governance, and digital transformation, with an additional EUR 11 million allocated for 2025-2027. Bhutan is also a beneficiary of several multi-country EU programmes and the Everything But Arms (EBA) scheme.

Hence, the Multiannual Indicative Programme (MIP) 2021-2027 has contributed to strengthening bilateral cooperation. The MIP focuses on three priorities:

1. Climate Change and Green Growth: A EUR 15 million budget supports sustainable agri-food systems, nutrition security, and gender equity through climate-resilient practices (2022-2027). Bhutan is also one of the five pilot countries for the Sustainable Agri-food Systems Intelligence (SASI) initiative.

2. Good Governance for Inclusive Socio-Economic Development: The EIB Framework Agreement leverages the European Fund for Sustainable Development Plus (EFSD+) to diversify Bhutan’s clean energy generation system. A budget support program (EUR 8.3 million, including EUR 1.3 million for technical assistance, 2023-2027) will bolster local governance, decentralization, and social accountability mechanisms.

3. Digital Transition: In partnership with UNICEF, a EUR 1 million program (2024-2027) promotes digital education and skills development, seeking to enhance employability and reduce disparities.

The EU also funds civil society projects and their engagement with the parliament (EUR 3.5 million), private sector investments (EUR 1.3 million), and sustainable tourism initiatives (EUR 1.3 million).

By the end of 2027, EU cooperation will have contributed to:

• More sustainable agri-food systems using climate-resilient practices, technology, and infrastructure.

• Reduced economic vulnerability through diversification and improved resource mobilization.

• Enhanced human development indicators via digital solutions for public services, including sectors like education.

Robust EU-Bhutan relations are also reflected in parliamentary ties. Under the EU’s "Parliaments in Partnership" project, Bhutan’s National Assembly and National Council have developed connections with EU Member State Parliaments. Through the EU’s project   “Promoting Good Governance: Support to Civil Society and Bhutanese Parliament engagement with Civil Society Organisation, Bhutan launched its first "Strategy for Parliament Collaboration and Civil Society Organizations," guiding partnerships between legislatures and CSOs in May 2023. Bhutanese Members of Parliament recently met the EU delegation on 12 October 2023.

The EU and Bhutan share interests in combating climate change, upholding multilateralism, achieving the UN Sustainable Development Goals (SDGs), and fulfilling the Paris Agreement and Sendai Framework on Disaster Risk Reduction objectives. As Bhutan transitions beyond LDC status, the EU remains a committed partner in its sustainable development journey.

Key Events

1. On 28 January 2025, Prime Minister Tshering Tobgay visited Brussels for meetings with, i.a. the President of the European Council António Costa, HRVP Kaja Kallas and 

Christel Schaldemose, Vice President of the European Parliament;

2. The 11th Annual Consultations between the Royal Government of Bhutan and the EU, held in Thimphu on 5 May 2023, marked a constructive dialogue covering a wide range of topics, including governance and human rights, trade relations, sectoral cooperation, and various multilateral and regional issues.

3. The 2018 elections were observed by the EU’s "DiploWatch" mission of 11 countries in a visitors' program arranged by the Bhutanese Election Commission, witnessing the polls in 7 districts. 

4. In 2015, the Prime Minister of Bhutan, Tshering Tobgay, was the first Bhutanese Head of Government to visit Brussels. The newly elected Prime Minister Dr. Lotay Tshering made an official visit to the European Union in Brussels and Luxembourg from 16 – 22 March 2023. He had visited earlier in 2019 at the invitation of the former President of the European Commission, Mr. Jean-Claude Juncker.