The Ministry of Economic Affairs (MoEA) is following up with the Government of India (GoI) about Bhutanese farmers not being able to export areca nuts and vegetables to India.
The exports of ginger and areca nuts from Bhutan were stopped in May 2021.
The export of potatoes from Bhutan was stopped in 2020 but temporary exemptions were provided by the GoI in 2020 and also in 2021.
The current exemptions from the import restrictions for potatoes are valid till June this year.
Since 2020, the matters were taken up through diplomatic channels, various bilateral consultation meetings at the commerce secretary-level meeting and during the visit of the MoEA minister to New Delhi last year.
Why not able to export
Areca nut is a prohibited item as per the Import Policy 2017 of India; ginger and potatoes are also among the restricted items.
There was also an agriculture infrastructure and development cess being applied on the export of Bhutanese apples which came to 45%, including a surcharge. A cess is a form of tax levied by the government on tax with specific purposes till the time the government gets enough money for that purpose.
Officials from the department of trade under MoEA said that towards the end of February this year, the GoI informed that cess would no longer be applied for imports from Bhutan.
The export of areca nut was prohibited because of not fulfilling the Minimum Import Price (MIP).
The conditions outlined in the import policy state that export of areca nuts to India is free only if the Cost Insurance and Freight (CIF) value is Rs 251 per kg. However, the import of areca nut below value of Rs 251 is prohibited.
Bhutanese traders purchase the areca nuts domestically at prices ranging from Nu 40 to 50 per kg.
Trade officials said that since the prescribed CIF value is way above the market prices, exporters are not able to meet the CIF value of Rs 251 to be exempt from this condition.
Export and import quantity
Bhutan used to export potatoes to India at an average of 20,000MT, an average of 3,000MT of gingers, 12,000MT of areca nuts, and 1300MT of apples annually.
Bhutan imported 1.96 MT of ginger and 308 Kgs of areca nuts according to the Bhutan Trade Statistic in 2021.
These specific agricultural exports account for less than 1 percent of the domestic production of India.
The officials from trade said that there is a bilateral trade, transit and commerce agreement with India. “There are no import restrictions imposed by Bhutan on anything from India, including the import of ginger and areca nuts, unless required by exigent circumstance.”
An official said: “We are optimistic that there will be positive outcomes announced soon on these matters”.