Dechen Dolkar

Despite the lifting of restrictions on sugar exports in November 2022, the Association of Bhutanese Industries (ABI) continues to face hurdles in importing sugar from India.

The Government of India (GoI), through the Directorate of Sugar and Vegetable Oils, allows the export of sugar to various countries, allocating an export quota of 0.6 million metric tonnes for the period from 2022 to 2023, until October 2023.

The ABI has reported that, although the government has granted permission for vendors to export sugar from India, low demand from Bhutanese importers has led vendors to prefer exporting to larger markets in Europe and the Middle East, resulting in their reluctance to entertain supply orders from Bhutan. Industries in Bhutan require approximately 1,123 metric tonnes of sugar on a monthly basis.

Pema Namgyel, the general secretary of the ABI, highlighted the significant difficulties faced by small industries and traders in contacting approved vendors and securing the necessary supply.

He said that importers are forced to pay higher rates for sugar due to the monopolistic practices within the industry, along with substantial freight charges. Furthermore, vendors demand full payment in advance.

Namgyel added that importers encounter challenges in meeting the millers’ demands to lift significant quantities of sugar in a single shipment. This requirement often presents difficulties due to space and budget constraints faced by local industries.

Importers have also reported the need to switch from one vendor to another once their allocated quotas are exhausted. This process of building new vendor relationships introduces delays and hampers timely responsiveness, according to Namgyel.

The ABI has recommended that the government provide support to facilitate the import of sugar from India. They have urged the GoI to expand the list of approved vendors and sugar mills, proposing the inclusion of sugar mills located in neighbouring Indian states for direct export to Bhutan.

This initiative, they believe, would help mitigate freight expenses, reduce turnaround time, and enhance cost-effectiveness for importers.

Additionally, the association suggested that considering Bhutan’s relatively small sugar import quantities compared to domestic and other countries, the GoI should facilitate the direct export of sugar from local vendors to Bhutan.

During a recent meet-the-press session, Minister of Foreign Affairs, Dr Tandi Dorji, said that the only sugar millers willing to sell sugar to Bhutan are located in Uttar Pradesh, resulting in high transportation costs due to the relatively small quantity requirement.

However, he noted that during a meeting with GoI officials on May 25, Bhutan submitted a list of 30 millers closer to Bhutanese retailers and 10 industries, as per the GoI’s request. The GoI will now inform those millers to sell sugar to Bhutan.

Regarding trade-related issues, minister said that the government has also requested the GoI to address concerns regarding the import of wheat and flour, as well as the export of potatoes, coal, and scrub. He assured that all trade-related issues would be resolved in the coming weeks.