The agreement has been updated to suit the needs of modern times
Trade: The ongoing National Assembly session will pass the Trade, Commerce and Transit Agreement between Bhutan and India.
The agreement was signed on November 12 by economic affairs minister Lekey Dorji and Indian commerce and industry Minister of State Nirmala Sitharaman in Thimphu.
The bilateral trade agreement expired in July. But the validity was extended with effect from July 29, 2016 for a period of one year or till the new agreement comes into force.
Lyonpo Lekey Dorji said the agreement has been updated to meet the needs of changing times. The development of the Pasakha dry port, for instance, has been taken into consideration in the renewed agreement, he said.
“New features have been added in the agreement,” he added. “The agreement has to be ratified by the Parliament.”
According to a press release from India’s Commerce and Industry ministry, the new bilateral trade agreement aims to enhance trade between the two countries through trade facilitation by improving procedures and cutting down on documentation.
The agreement will also provide for adding additional exit/entry points for Bhutan’s trade with other countries. “It is also expected to further strengthen the excellent relations between the two countries,” states the press release.
The agreement was approved by the union cabinet of India chaired by Prime Minister Narendra Modi last month.
The agreement provides for a free trade regime between two countries. The agreement also provides for duty free transit of Bhutanese merchandise for trade with third countries.
The bilateral trade relations between India and Bhutan are governed by the Agreement on Trade, Commerce and Transit between the Government of India and Bhutan, according to a press release from Press Information Bureau (PIB) of the Government of India.
The agreement was renewed on July 29, 2006 for a period of ten years.
“The traditionally unique bilateral relations characterised by trust and understanding between India and Bhutan have matured over the years and would be further strengthened by execution of the proposed Agreement on Trade, Commerce and Transit Agreement,” the press release states.
The first Agreement on Trade and Commerce between Bhutan and India was signed in 1972. Since then, the agreement has been renewed four times.
During her visit to Bhutan, the Indian Commerce and Industry minister also called on Prime Minister Tshering Tobgay among other dignitaries.
She also had a bilateral meeting with a high level Bhutanese delegation led by Lyonpo Lekey Dorji, where both the leaders discussed various issues related to bilateral trade, transit and investment.