Dechen Dolkar

Recognisng the importance of Foreign Direct Investment (FDI) in the agriculture sector, the government will introduce a bold policy, where Bhutan is ready for business.

Bhutan is dedicated to business-friendly policies, reflecting its commitment to open markets. The country has an uncompromising focus on long-term sustainability for the well-being of people and the planet; and leverages dynamic opportunities.

During the opening of the Bhutan Agrifood Trade and Investment Forum (BAFIT) 2024 yesterday, the Minister for Industry, Commerce, and Employment, Namgyal Dorji, presented enabling policies for investment in agrifood systems transformation in Bhutan.

Lyonpo said that Bhutan was making strategic policy moves to create an environment that is not only business-friendly but also deeply rooted in sustainable and ethical practices.

Lyonpo also said that government would soon announce bold FDI policy change where reforms are underway.

The upcoming revision of the FDI policy is expected to bring a much-needed paradigm shift, enhancing the investment environment and making it more appealing to investors.

The government also aims to increase FDI to over Nu 100 billion by 2029 from the current Nu 60 billion.

While presenting an enabling policy for investment in the agrifood system, Lyonpo said that the government proposed to allow up to 100 percent foreign ownership, where foreign investors can establish FDI companies in the agriculture sector without requiring a local partner.

Previously, foreign investment in this sector was owned at 74 percent.

Lyonpo said that agriculture was one of the priority sectors where FDI is strongly encouraged. Investments are allowed in both the cultivation and processing of agricultural products. This sector is identified as a high priority for fiscal incentives.

Investors will be able to repatriate dividends and capital without any restrictions and will have unrestricted access to foreign exchange for the import of capital goods and operational expenses.

“The government also proposed to relax provisions related to land access, especially in the agri-food sector,” Lyonpo said.

This includes extending lease terms and improving access to state land for long-term leases.

To ensure that FDI companies do not face challenges due to a lack of local expertise, the government will allow the employment of foreign expatriates without any restrictions on the maximum capacity.

Additionally, foreign investors will be provided with investor cards, granting them the right to reside in the country.

Currently, the country has two FDIs in agriculture,  Mountain Hazelnut Venture, which first started in the eastern part of the country and now brings together over 8,000 smallholder farmers across 19 districts, and Druk Metho, an EU-certified organic farm in Punakha, which partners with Swiss Alpine Herb to grow, process, and export edible flowers to Europe.

Lyonpo said that these ventures highlighted Bhutan’s unique agricultural potential and ability to create niche markets worldwide.

“These foreign investment ventures are empowering our farmers and weaving together a powerful narrative of resilience, innovation, and the transformative power of collaboration,” Lyonpo said.

Lyonpo said that India and Bangladesh have made Bhutan overcome the tyranny of geography.

The government values the partnership of the private sector and foreign investors in the country’s economic transformation journey.

Similarly, under the HiHi investment initiative, Bhutan has identified six food value chain interventions which include, citrus mandarin, quinoa, rainbow trout, black pepper, organic asparagus and organic strawberry. The interventions include production and postharvest management interventions.

The Ministry of Agriculture and Livestock in collaboration with the Ministry of Industry, Commerce and Employment, the Ministry of Foreign Affairs and External Trade, the Bhutan Chamber of Commerce and Industry, Food Agriculture Organisation, and the European Union, is organising the BATIF 2024 from May 15 to 19 in Thimphu.

The main purpose of the Forum is to bring together Bhutanese and foreign investors, traders, business enterprises, entrepreneurs, exporters, and financial institutions to explore possibilities of partnership in Bhutanese agri-food trade and investment.