Even as Bhutan adjusts to the Goods and Service Tax (GST) regime that India rolled out last July, issues remain.
The most prominent being the formalities required in the export of cardamom to India. For some time now, our cardamom growers and exporters were facing problems exporting cardamom and starting November 28, all export, formal or informal has come to a complete halt.
While the implementation of GST may have triggered this knot, the issue here is more to do with the certification process. The system set up across the border asks for quarantine clearance. The Plant Quarantine Services of India (PQSI) does not issue the clearance for Bhutan’s cardamom. The clearance that Bhutan Agriculture and Food Authority (BAFRA) provides is not recognised across the border.
Concerns about this issue was raised and documented since last year but little appears to have been done to resolve it. The foreign minister recently requested the Indian foreign secretary to look into this issue while BAFRA and agriculture ministry officials and others are already working on holding a meeting with their counterparts in New Delhi.
As one of the largest export crops in Bhutan, cardamom farming is one of the main means of livelihood for most farmers in the south. We export the spice to India and Bangladesh and the trade is already rife with problems. Middlemen distorting prices and influx of inferior quality into the market have hit the cardamom business hard. The clearance issue only compounds the issue further.
The drop in price has started to discourage farmers from cultivating cardamom. While work is underway to iron out these issues, it becomes important to understand why BAFRA’s certification is not recognised across the border. The duplication in its mandate with Bhutan Standards Bureau and the tension in their responsibilities over setting national standards however rarely it may be followed needs attention.
We were aware of the impacts GST would have on the economy. Delegations were fielded to India to understand its consequences and the mechanisms that could have been put in place. The issue with cardamom shows that we may not have understood the regime well to comprehend and prepare for its impact on our cash crops and farmers.
Should we be willing to give it attention, untangling this process may not be as complicated as it is made to be, especially given the exemplary relation and the free trade agreement the two countries share. At a time when we are celebrating 50 years of diplomatic relations, facilitating trade by smoothening the processes such as the recent one, could have a bigger impact in strengthening relations and understanding between the peoples of two nations than organising cultural programmes.