Bhutan and Bangladesh strengthen cooperation

MoU gives Bhutan alternative sea routes through the ports in Chittagong and Mongla

Bhutan and Bangladesh signed six memoranda of understanding including two agreements in the presence of the two prime ministers on the first day of Prime Minister Sheikh Hasina’s visit yesterday.

Renewal of the Agreement on Culture Cooperation between the two countries is expected to encourage hosting of cultural art exhibitions, provide support through scholarships,  and training and research in the field of art and culture. “It will strengthen cooperation in the field of culture, promote mutual understanding and knowledge between the peoples of the two countries,” a press release from the foreign ministry stated.

The agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income will clarify the taxing rights of both countries on forms of income flows arising from cross-border business activities. The agreement is expected to minimise the double taxation of such income, which is expected to reduce barriers to cross-border investment and boost trade and economic flows between the two countries.

The MoU on Use of Inland waterways for Transportation of Bilateral Trade and Transit Cargoes between the two countries serve as an instrument to initiate the use of feasible inland water transport routes for trade.

The Royal University of Bhutan (RUB), Bhutan and Bangladesh Academy for Rural Development (BARD), Comilla, Bangladesh, through the MoU signed yesterday, would establish  mutual  collaboration and  reinforce  the  academic  relationship  between the two institutions and  strengthen capacity  for  sustainable  development.

The MoU between Bhutan Standards Bureau (BSB), and Bangladesh Standards and Testing Institution (BSTI), will assist the two agencies in the development of standards, exchange information on product certification, recognise test certificates and support each other in the field of metrology and calibration services.

Bhutan Agriculture and Food Regulatory Authority (BAFRA), and the Department of Agricultural Extension, Bangladesh will ensure that the trade of food and agricultural products between the two countries are safe and meet the requirements of the importing country.

The inland water route, stretching from Indian territory through the Brahmaputra river until Mongla and Chittagong in Bangladesh, will soon be accessible to Bhutan.


PM Sheikh Hasina arrived at the Paro International Airport on a Drukair flight yesterday

PM Sheikh Hasina inspects the Guard of Honour

Well wishers on the Paro-Thimphu highway display an offering of fruits to the visiting prime minister

Students welcome the prime minister along the Paro-Thimphu Highway


While Bangladesh has allowed Bhutan to use its inland water transport routes for cargo since in 2012, the two countries were sharing and working on the draft Memorandum of Understanding (MoU) and protocol until now. The agreement was expected to be signed in 2012. To date, Bhutan has been using the Kolkata seaport for export and import of goods to third countries. The realisation of this agreement is expected to provide Bhutan with alternative sea routes. The ports in Chittagong and Mongla have inland water connectivity, which will reduce the time and cost of transportation.

The secretarial level meeting between Bhutan and Bangladesh held in March this year also decided to work on the MoU between the Bhutan Standards Bureau (BSB) and Bangladesh Standards and Testing Institution (BSTI) to recognise each other’s standards and classifications. The meeting also decided to come up with a MoU between the Bhutan Agriculture and Food Regulatory Authority (BAFRA) and the agriculture ministry of Bangladesh to accept each other’s testing and certification. This MoU is a move to remove non-tariff barriers.

Secretary in-charge of the Bangladesh commerce ministry, Shubashish Bose at the meeting last month said the two countries have immense potential in trade but not much has been explored. He cited the example of Bhutan’s hydropower potential and its benefit to both the countries.

Bhutan’s major export items to Bangladesh are mineral products, food items, fruits, beverages and oat. Bangladesh’s exports to Bhutan include garments, computer accessories, dry food, pharmaceuticals, toiletries and textile items.

In a landmark trade agreement signed between the government of Bangladesh and Bhutan on November 7, 2009, the government of Bangladesh had agreed to eliminate tariff on 18 major agricultural products Bhutan exports to Bangladesh.

Bangladesh is the only country with which Bhutan has a trade surplus. Total trade between the two countries has grown from Nu 1.98 billion in 2015 to Nu 2.62 billion last year.

Tshering Palden

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