Separatist rebels from India's north eastern state of Assam have started moving out of their bases in southern Bhutan after a deadline set by Bhutanese Government expired on Monday.
By Subir Bhaumik
BBC correspondent in Calcutta
Meanwhile, Indian security forces have increased patrolling along Bhutan's borders with Assam.
Indian forces have been fighting the rebels for two decades
Indian officials say the Bhutanese authorities are now closing supply routes, despite the monsoon.
One senior Assamese separatist leader died in clashes with Indian police on Sunday when he was moving from southern Bhutan with a group of guerrillas.
After the deadline for the separatists to leave the Bhutan expired the rebels say they are finding it harder to stay in the country.
Indian military officials say the Bhutanese forces are cutting off the supply routes of the rebels, denying them food and medicines which could be essential during the monsoon period
They have also warned Bhutanese villagers against supporting the rebels for financial gains.
There are several active guerrilla groups in Assam
However, Indian officials say they doubt Bhutan's capacity to mount a full-scale military offensive against the rebels of the United Liberation Front of Assam (ULF) and the National Democratic Front of Bodoland (NDFB).
Analysts say Bhutan's army is poorly equipped and it lacks decisive superiority in tactics, numbers and weapons to overwhelm the rebel bases.
But Indian military officials say that if the rebels are having their supply routes blocked they will be forced to abandon most of the camps.
Some camps have already been vacated and Indian military officials say several others are being dismantled.
The Assamese rebels say they have moved men and materials to the jungles of Meghalaya and western and northern Assam.
But in the process, the military officials say, they have suffered casualties, losing some senior leaders like Rustab Choudhury who looked after the finances of ULFA.