Bhutan- India bilateral trade and transit talks explore more transit routes
To enhance trade between the two countries by removing bottlenecks that are impeding free flow of trade, the bilateral trade and transit meeting between Bhutan and India was held in the capital on 25th May 2015.
During the meeting officiating secretary of the ministry of economic affairs Sonam P. Wangdi said the subject matter of the meeting was on trade and transit agreement which is one of the oldest free trade agreements in the world. The agreement was signed on January 17, 1972 and predates the World Trade Organization. The agreement is truly a mutually beneficial one that has served the interest of both our countries.
He further said that during the tenure of the current one, in its 4th renewal avatar, total trade has grown from Nu.22.76 billion in 2005 to Nu.79.65 billion last year, a growth of 250 percent. While, the imports had grown by 274 percent from Nu.12.80 billion to Nu. 47.85 billion. Whereas the exports had grew only 219 percent from Nu. 9.97 billion to Nu. 31.80 billion.
The trade balance has always been in favor of India, with Bhutan carrying a trade deficit of Nu. 16.05 billion last year, a whopping 467percent since 2005. As a result, Bhutan experienced severe balance of payment problems since 2012, said the officiating secretary.
He added that the agreement also provides transit provisions for Bhutan’s trade with third countries: and ports, airports, entry and exit points, whenever needed, are identified and notified to facilitate trade. We are working on 27 entry and exit points.
“The annual meeting was mainly to monitor the implementation of the agreement and resolve issues impeding trade flows”, he added.
Mr. Rajiv Kher, Commerce Secretary, Government of India said that India Bhutan trade relationship was a part of much larger canvas of two countries relationship and this relationship provides all prospective, all framework of bilateral engagement which transact beyond typical diplomatic, our relationship within the bond extended by both sides.
He added that the bilateral relationship between India and Bhutan is something which shines as a jewel in the regions; we look at this relationship not just as a pure major of transiting goods that happen in any place. The exchange of goods and services will happen but having more important is that facilitate and the dimension has to be very strong pronounce beside particularly in the context of neighboring countries, it is extremely important that India’s investment are encourage in a manner that the trade and investment connects strengthen and our own value change.
While, the main purpose of the talk was to enhance trade between the two countries by removing bottlenecks that are impeding free flow of trade. Among other matters, Bhutan would be seeking additional entry/ exist points through India to facilitate Bhutan’s trade with third countries. The last bilateral trade talk between the two countries was held in the capital last year.
India is the largest trading partner of Bhutan. Total trade including electricity between the two countries increased from Nu. 38.82 billion in 2008 to Nu. 79.65 billion in 2014, which is a staggering 100 percent increase in the last five years.
Meanwhile, last year the total value of imports from India was Nu. 47.85 billion and total value of export to India was Nu. 31.80 billion. Bhutan’s major import items from India consist of mineral fuels and oils, cereals, motor vehicle and parts, electrical machinery and iron and steel products while electricity, calcium carbide, ferrosilicon, semi finished products of iron, Portland cement and dolomite comprise its main export items to India.