New transit routes to boost trade with India
Five new additional entry and exit points for Bhutan’s trade with India were included in the renewed bilateral trade agreement between the two countries, which will be presented at the National Assembly for adoption on December 5.
Minister for Economic Affairs, Lekey Dorji, presented the Agreement on Trade, Commerce and Transit between Bhutan and India at the ongoing session of the Assembly on November 30.
The bilateral agreement was first signed
in 1972. This is the fifth time the agreement has been revised. One new article has been added to the agreement and two articles were revised.
In addition to the existing 16 entry and exit points, the five new trade routes will open up trade in goods from Bhutan’s new industrial zones in Samtse, Samdrup Jongkhar and Lhamoizingkha in Dagana, according to the economic affairs minister.
“Being a landlocked country, it’s critical for us to have access to the world through favorable transit arrangements. Bilateral free trade, transit and commerce agreement between the two countries is the most liberal and one of its kind reflecting the close ties of friendship,” said Lyonpo Lekey Dorji.
The protocol to the agreement clearly spells out entry and exit documentation through these transit points so that Bhutanese businessmen and women don’t get harassed due to unclear rules of procedures, added Lyonpo.
Besides the five new transit points, the economic affairs minister also said many other trade routes are in advanced stages of discussion. One such transit point is at upper Khogla near Pasakha industrial area.
“The road being built from the Indian side will connect to a Land Customs Station (LCS) being planned and will be built in Pasakha. This LCS would free up traffic through the main entry gateway in Phuentsholing to Bhutan,” said Lyonpo. “The work is under process and we hope upper Khogla transit point would be notified soon.”
Further, the two governments are also negotiating Mathanguri transit points among others.
Meanwhile, the new article in the Agreement requires the completion of internal ratification procedures of both the countries for the Agreement to come in to force. Article 8 which has been revised states that both countries would undertake measures to ensure proper documentation of trade data and exchange trade data periodically and put in place mechanisms to reconcile the same at regular intervals.
The revision of Article 11 states that there would be no prohibition imposed by either country on export of essential food items to the other country provided they meet reasonable end user requirement, and the items are identified by mutual consent and notified from time to time. Concluding the deliberation on the agreement, the House expressed that the Agreement would further cement the friendship between Bhutan and India.
Lyonpo Lekey Dorji and Minister of State for Commerce and Industry of India, Nirmala Sitharaman, signed the Agreement on Trade, Commerce and Transit between the Bhutan and India in Thimphu on November 12, 2016.
The last Agreement was renewed on July 28, 2006 and was valid till July 29, 2016. The validity of the Agreement was extended for a year or till the date of coming into force of the new Agreement, whichever is earlier, by exchange of diplomatic notes between the countries.
India is Bhutan’s largest trading partner. The trade volume between India and Bhutan stood at Nu 85.54bn in 2015, which accounts for 83% of Bhutan’s total trade.
The new agreement will come into force once the National Council ratifies it.