Bhutan opens two more formal trade routes with India

New Delhi: Bhutan's two more formal trade routes with India are approved and will start functioning next month near the borders in Lhamoidzingkha in Dagana and Chhuchungsa in Samtse, the officials said. The routes will be operational after the official inauguration next month.

According to Bhutan's local newspaper Kunsel, the traders in Lhamoidzingkha said they are excited about the business opportunities once the Lhamoidzingkha-Kulkuli border is opened. Another trader Dilip Mukhia said, "It is a huge achievement."

Bhutan and Indian traders currently export their products via Phuentsholing. It takes two days to transport goods to India through Jaigoan. "There will be an 80 per cent reduction in cost. We can now export goods in two hours," a trader said.

An owner of Ghishing Shop said that the route would help business people and residents. The Lhamoidzingkha-Kulkuli route was identified as a seasonal trade route in 2013 (August to March every year) for the export of oranges.

Lhamoidzingkha is close to both Assam and West Bengal in India. "Lhamoidzingkha also has a high potential for dry ports and waterways.

An official from the trade department said that the Government of India on December 8 notified that Kulkuli Land Customs Station (LCS) and Nagarkata LCS in West Bengal had been upgraded as a full-time LCS without any commodity restrictions.

Bhutan’s minister for Foreign Affairs, Dr Tandi Dorji, said that the formal opening of these routes would greatly benefit the traders in the country, who in the past had to export at a very high cost.

Bhutan’s minister for Economic Affairs, Loknath Sharma, said that the trade between the two countries would be enhanced as business opportunities improve in the region.

Tourists are also expected to come in through this route if Lhamoidzingkha becomes one of tourism's entry and exit points. "It is a long-awaited achievement for the people of Dagana and the neighbouring dzongkhags," said the National Council member of Dagana, Surjaman Thapa.

There has been free trade and commerce between India and Bhutan since the Treaty's signing in 1949.

India and Bhutan signed the first formal Agreement on Trade and Commerce in 1972. It has undergone five revisions (1983, 1990, 1995, 2006 and 2016.

The current Agreement on Trade, Commerce and Transit between the Royal Government of Bhutan and the Government of the Republic of India is valid till 2026.

India has been the largest and the most critical trading partner for Bhutan. In 2020, overall trade with India was at Rs 94.89 billion (including electricity), which accounted for 82% of Bhutan's total external business.

Bhutan's major exports to India include electricity, ferrosilicon, dolomite, semi-finished iron or non-alloy steel product, Portland pozzolana cement, cardamoms, pebbles, and gravel, gypsum, carbide of silicon, ordinary Portland cement, etc. The total export value in 2020, including electricity, was Rs 43.51 billion.

Bhutan's major imports from India comprise diesel, petrol, motor vehicles for transporting goods(dumper), ferrous products, telephones, electrical distribution panel board, coke and semi-coke, soya-bean oil, passenger cars and petroleum bitumen. The total imports from India, including electricity, were Rs 51.37 billion.

There are 28 entry, and exit points in India and Bhutan notified under the Agreement on Trade, Commerce and Transit between India and Bhutan.