Issues discussed at ministerial meet earlier this month

Dechen Dolkar 

Export of goods from Bhutan to India could be smoothed with the Economic Affairs minister, Loknath Sharma, discussing issues related to trade and commerce with top Indian leaders during a recent visit to India earlier this month.

The minister, on January 11,  met the commerce and industry minister of India, Piyush Goyal, power minister, Raj Kumar Singh and foreign secretary Harsh Vardhan Shringla where issues related to export of agriculture products and hydropower projects were discussed.

Although Bhutan and India have a free trade agreement, exporters, especially exporting agriculture produce and farmers said that there are a lot of ad hoc regulations which hinder export of perishable goods. The problem is with the export of potatoes, ginger and areca nuts because of the import policy 2017 of India. The policy has not allowed the import of vegetables from Bhutan.




Lyonpo said that Bhutanese exporters repeatedly complained of issues related to export of potato, ginger, apple and areca nut. On the request of the government, the government of India allowed export to  potatoes without import license till June 2022.

Lyonpo said that there were few import policies adopted in India, and with the pandemic few non-tariffs, as well as tariff barriers, were introduced in general.

Bhutanese exporters also complained of hurdles in the export of scrub materials, export of flour mill products and requirement of certification on gypsum products to India.

Lyonpo said that the export of scrub materials was stopped since August last year citing that Bhutanese exporters did not fulfill the requirements as per the handbook of procedures issued by the director general of foreign trade of India.




Bhutan exports about 170,000MT of gypsum to India. However, in November 2020,  the directorate of plant protection quarantine storage of India imposed the requirement of a plant quarantine inspection certificate as per the plant quarantine order 2003.

Lyonpo said that all issues were discussed with the trade and commerce minister and the outcomes are favourable in terms of trade and commerce as well as the hydropower sector. However, the details were not shared with Kuensel.

The minister said  they have also requested the government of India to allow the import of fertilizer from India. There is an acute shortage of fertilizers in the country. Many farmers complained of not getting fertilizers last year and attributed that to the drop in yield of paddy.

Meanwhile, Lyonpo said that he has requested that Bhutan freely access the trading entry and exit points agreed and operational between India and Bangladesh that are relevant to Bhutan.




“We have requested the government of India to allow Bhutan to use all entry and exit points agreed and notified between Bangladesh and India that has proximity and relevance to Bhutan particular routes like Haldibari-Chilahati (railway), Golakgani-Sonarhat and Mankachar-Rowmari.

Lyonpo said that facilities of international trade are already there and permitting Bhutan will not increase the cost as the volume of trade will be minimal.

Hydro projects

The minister-level meeting also discussed the closing of the  Mangdechhu Hydroelectric Project Authority (MHPA) project and the way forward on Punatsangchhu Hydroelectric Project Authority (PHPA-I), and cooperation in hydropower. MHPA, currently is in the inter-governmental model with its authority members and all of which is independent. After closing of the project then it will come to the government of Bhutan ownership.

“To close the project, the final cost of the project is not yet approved by the government of India and there is also an issue with MHPA and BHEL,” Lyonpo said.

Lyonpo said that the meeting agreed that all the existing issues regarding MHPA need to be resolved and the project closed.

On PHPA-I, Lyonpo Loknath Sharma said that both sides agreed that the options of barrage or dam will have to be carefully weighed and decided so that the existing geological issue is fixed.




“The decision on the way forward of PHPA-I will be taken once the DPR for barrage is ready, which will be ready by February end. It requires extensive and careful evaluation of the two options so that the project does not face another geological challenge,” Lyonpo said.

The minister  discussed the long overdue third international internet gateway. Bhutan has proposed a third international gateway via route Gelephu to Agartala in India to Commilla in Bangladesh to Kuakata in Bangladesh to Singapore.

Bangladesh has communicated with Bhutan on their offer of the friendship rate of USD 3 per Mbps per month from Singapore up to the Commilla exit point in Bangladesh.