Tuesday, July 25 2006 12:00 Hrs (IST) - World Time -

New Delhi: India and Bhutan, the idyllic Himalayan kingdom that measures its wealth in terms of gross national happiness, are set to expand their economic and energy ties when Bhutanese monarch Jigme Singye Wangchuk comes here on a six-day working visit Wednesday.

During the king's visit, India and Bhutan are likely to sign an agreement on trade and commerce and another one on cooperation in hydro-electricity generation, official sources told sources.

Both countries are expected to renew the agreement on trade and commerce, which was inked in 1995, for another ten years.

Crown Prince Trongsa Penlop Dasho Jigme Khesar Namgyel Wangchuck, who is set to take over as Bhutan's king in 2008, is also accompanying Wangchuk to India. The focus is on boosting trade and investment between the two sides and is reflected in the composition of the king's delegation, which includes Trade and Industry Minister Lyonpo Yeshey Zimba.

The Bhutanese monarch will call on President A.P.J. Abdul Kalam and hold talks with Prime Minister Manmohan Singh on a wide range of bilateral and regional issues. The king is also likely to meet chairman of the ruling United Progressive Alliance coalition Sonia Gandhi.

Ways to further expand energy cooperation between India and Bhutan, also known as the land of the thunder dragon, are likely to be discussed exhaustively between the two sides.

India and Bhutan are also expected to sign the protocol to the Tala agreement on the 1,020 MW hydroelectric project - the biggest joint project between the two countries. The Tala project, managed by Tala Hydroelectric Project Authority (THPA), is located in Chukha Dzongkhag in western Bhutan.

According to a survey, Bhutan has the potential of producing 30,000 MW of hydropower. India has also agreed to purchase surplus power from Bhutan.

The kingdom's foreign policy is guided by India, which also contributes substantially to its development budget. New Delhi recently provided an assistance package worth $450 million to Thimpu for its ninth five-year plan ending 2007.

The 50-year-old king was here last year as chief guest on Republic Day. He was on a state visit again last year during which both sides reviewed an entire array of bilateral ties, including cooperation in hydropower projects, border management and security related issues.

India has hailed Wangchuk's decision to abdicate in favour of his son in 2008 and the transition to democracy that year. This dramatic transformation is set to provide Indian diplomacy an opportunity to cement further its warm relations with a country with whom it shares nearly 700-km-long border.