This article examines Indo-Bhutan relations since the mid-20th century. Increased relations with India occurred as a result of political events in the region (Indian independence and the founding of the People's Republic of China) and Bhutan's own retreat from isolationist policies. The article discusses development assistance, trade, investment, and labor relations between the two countries, noting that India is Bhutan's single largest foreign aid donor and also Bhutan's most important trade partner. The article also considers problems such as the use of Bhutanese jungle areas as bases for Indian militant groups as well as concerns about future economic relations. (Ben Deitle 2006-02-09)