Bhutan is independent in it's internal affairs. I think they have a treaty with India with regard to external defense, in order to protect itself from the obvious threat posed by China.
Tibet has a very similar culture and people as the Bhutanese.
So, their relationship with India is sort of similar to the Marshall Islands, Palau, and Micronesia with the United States: they are considered sovereign, but their defense is provided by the United States in return for American use of their territory during war? Can India use Bhutanese territory if their is war in that region?