In a historic step that will give Bhutan more freedom in foreign policy and military purchases and redefine its special ties with India, the two countries will sign an "updated" version of its 57-year-old friendship treaty when future king Jigme Khesar Namgyal Wangchuk comes here next month.
"The updated treaty will be suited more to the 21st century than to the colonial era of the 1950s. It will weed out some archaic portions from the treaty and make it more contemporary," Bhutan's envoy to India Dago Tshering said.
"It will be in interests of contemporary India and Bhutan," the envoy stressed.
By archaic portions of the treaty, the envoy meant Article 4, which refers to India returning 32 square miles territory in the area of Dewangiri.
"India returned it long time back. It's redundant," the envoy said.
"The treaty will be signed when the king comes here next month. It will be sometime in the second week of February. Dates are being finalised," he said.
This issue figured prominently in discussions between Bhutan's Prime Minister Lyonpo Khandu Wangchuk and External Affairs Minister Pranab Mukherjee here Monday. Wangchuk was in India to attend an international conference on Mahatma Gandhi.
The envoy is also excited about the planned transition of his country from a monarchy to constitutional democracy next year.
"Everything will go according to plan," he said while referring to Bhutan's tryst with multi-party democracy next year.
"Preparations are already on. We plan to hold mock elections in July this year to prepare the Bhutanese people for actual elections next year,"
The signing of the updated treaty is meant to send a larger message about New Delhi's intention to modernise its relations with its smaller neighbours and imbue these ties with contemporary context.
An updated treaty between India and Nepal, also in the throes of democratic transition, is also being actively discussed between the two sides.
The updated treaty with Bhutan envisages broad changes that will mean New Delhi giving more freedom to Thimphu to pursue its foreign policy as long as it does not clash with its strategic interests.
Article 2 of the treaty asks Bhutan to be "guided by the advice of government of India in regard to its external relations."
This section is likely to be reworded to reaffirm Bhutan's sovereignty in the arena of international affairs.
Article 6 of the treaty which permits Bhutan to import "arms, ammunition, machines, warlike material or stores" for its "strength" but with India's "assistance and approval" is also set for revision, informed sources
In practical terms, it would mean India relaxing the provision for its prior approval for Bhutan buying non-lethal military stores and equipment.
India and Bhutan, the idyllic Himalayan nation that prefers to measure its national wealth in terms of gross national happiness, reached an agreement on the text of an updated India-Bhutan friendship treaty, inked in Darjeeling on August 8, 1949, last month.
The revised treaty will broaden the burgeoning economic cooperation between the two countries across a spectrum of areas, including hydropower cooperation, trade and commerce and human resources development.
The restructuring of the treaty had long been in the making and was reviewed and discussed during the visit of Bhutanese King Jigme Singye Wangchuk here in July, Foreign Secretary Shivshankar Menon's trip to Thimpu in October and Pranab Mukherjee's visit to the Bhutanese capital last month.
In a royal edict read out to people of Bhutan last month, King Jigme Singye Wangchuk abdicated to make way for his eldest son -- the 26-year-old US and Oxford-educated Jigme Khesar Namgyal Wangchuk. A date for his coronation has yet to be decided.