Indian Prime Minister Narendra Modi has arrived in the neighbouring Bhutan for his first foreign visit after assuming office in a bid to foster bilateral ties.
The Hindu nationalist prime minister is expected to meet with his Bhutan counterpart Tshering Tobgay during the two-day visit to the tiny Buddhist kingdom, a month after his Bharatiya Janata Party secured a landslide election victory.
Modi said relations with Bhutan "will be a key foreign policy priority of my government".
"India and Bhutan enjoy a unique and special relationship ...forged by ties of geography, history and culture," he said in a statement late on Saturday.
"Therefore, Bhutan as the destination for my first visit abroad as prime minister is a natural choice."
Bhutan's Tobgay was one of seven regional leaders invited to Modi's inauguration and analysts say the decision to make Bhutan his first port of call is designed to underline the importance he attaches to neighbourly relations, which suffered under the last government led by the Congress party.
India cut fuel subsidies to the Himalayan nation last year in a move seen as a rebuke over Bhutan's moves to engage more with China.
"Bhutan may be a small country but it is strategically very important and ... China is on the other side," said Ranjit Gupta, a retired ambassador whose postings included Nepal and India's UN mission.
During the visit, Modi will meet with King Jigme Khesar Namgyel Wangchuck, along with Tobgay, and address a joint session of the country's parliament.
Talks are expected to focus on strengthening ties over the kingdom's hydropower plants, which supply much-needed clean energy to India. Bilateral trade was $1.1bn in 2012.
India, a power deficit nation with severe outages, has helped Bhutan develop three hydropower plants with another three under construction.
In April, the two countries signed a framework agreement on four more joint venture power projects totalling 2,120 megawatts, India's foreign secretary Sujatha Singh told reporters on Friday.
"Our hydropower cooperation with Bhutan is a classic example of win-win cooperation and a model for the entire region," said Modi, who will lay the foundation stone for a new power project during the visit.