Points:- Bhutan royal family educated in India. Bhutan signed the 1949 treaty of friendship and renewed this in 2007 declaring India will help guide it's foreign policy without interfering in the internal affairs or declaring Bhutan as a protectorate. Move was initially to prevent Chinese claims on Bhutan as traditional Chinese territory. Given the existence of the treaty, the report is laughable. But then this is never proof enough. So allow me to go on. Indian Nationals travelling between Bhutan & India do not need Visa. An identity document, be it either passport or an election commission I. D card or a Pan card or any document proving Indianness is sufficient to walk across the border. Any national apart from an Indian is charged $200 per day for the tours. Indians are charged much much lower. Indian Rupee accepted everywhere. Indian military posts and doctors inside Bhutan are the preferred medical centres for treatment not only for tourists but also for local Bhutanese. India allows 16 entry and exit points for Bhutanese trade with other countries (the only exception being the PRC) and has agreed to develop and import a minimum of 10,000 megawatts of electricity from Bhutan by 2020. Bhutan runs on GNH (Gross National Happiness) Index, and not a GDP which is a unique concept in the world. The country does not want to become a significantly large economy. It is somewhere between a monarchy and socialist state. It is a pro-Indian country afaik and India should look forward to offer them a merger. Another reason being they can't hang in such a small place between big giants.