A historic agreement indeed
Bhutan and India renewed the trade, commerce and transit agreement yesterday in Thimphu. The last agreement was signed in New Delhi in July 2006 and had remained in force for ten years. The agreement had let to the expansion of the bilateral trade and collaboration in economic development of the two countries.
One of the main articles of the agreement is the free trade and commerce between the territories of the Royal Government of Bhutan and the Government of Republic of India. Further the trade agreement also allows Bhutan to impose such non – tariff restrictions on the entry into Bhutan of certain goods of Indian origin as may be necessary for the protection of industries in Bhutan.
However such restrictions will not stricter than those applied to goods of third country origin.
Further it also states that the governments of the two countries may impose such non tariff restrictions on entry into their respective territories of goods of their country origin as may be necessary.
The agreement also gives the flexibility for both the government of India and Bhutan to agree to enter into immediate consultations with each other at the request of either side in order to overcome such difficulties as may arise in the implementation of this agreement satisfactory and speedily.
One of the most important clauses in the agreement is that all exports and imports of Bhutan to and from third countries other than India will be free from and not subject to customs duties and trade restrictions of the Government of India, which is utmost importance for a land locked county.
India-Bhutan trade in 2015 was recorded at Rs 85.54 billion, which accounts for 83 percent of Bhutan’s total trade. India was the largest and most important trading partner of Bhutan.
The agreement also expects to further strengthen the excellent relations between the two countries and enhance people-to-people contact.
Bhutan-India Free Trade Agreement is considered one of the most liberal trading agreements in the region that is mutually beneficial to both the countries.
While continuing to provide a platform for free and friendly trade between our two countries, the renewed agreement provides even more facilities and support for transit of Bhutanese goods to and from third countries. This is especially importance for our landlocked country. In addition, India has agreed to exempt Bhutan from any export ban of essential food items like rice, sugar and cooking oil.
The agreement ratified by the Parliament this session will become a law of the land and once law it will be truly be a historic trade agreement. We must thank the government and people of India for their kind gesture and we look forward for their support in future.