Land of op­por­tu­ni­ties

FDI and pub­lic–pri­vate part­ner­ships in in­fra­struc­ture projects are wel­come as Bhutan of­fers sig­nif­i­cant op­por­tu­nity for projects in the ar­eas of air­port in­fra­struc­ture, high­ways, bridges, tun­nels and dry ports

Maritime Gateway - - Contents - By Sisir Prad­han

FDI and PPP in in­fra­struc­ture projects are wel­come in Bhutan.

With a GDP growth rate of 6.49 per cent (2015), the Hi­malayan king­dom is a buoy­ant eco­nomic growth story of South Asia de­spite be­ing land­locked. The coun­try has earned it­self a special place not only in South Asia but in the whole world for con­sid­er­ing Gross Na­tional Hap­pi­ness (GNH) as a critical growth in­dex. As per the devel­op­ment in­di­ca­tors, Bhutan has a per capita in­come of $2,500, which is one of the high­est in South Asia. In the last three decades, Bhutan’s econ­omy has ex­panded at a ro­bust pace driven by hy­dropower sec­tor. The coun­try’s econ­omy is largely based on tourism, agri­cul­ture, live stock and forestry. In 2016, the coun­try’s to­tal im­ports was valued at $4,57,019 and ex­ports was $1,40,604. Ma­jor­ity of exim ship­ment is through Visakhapatnam and Kolkata. Dur­ing FY2016 ex­ports from In­dia to Bhutan touched $469 mil­lion and im­ports from Bhutan to In­dia was $281 mil­lion. In­dia con­tin­ues to re­main Bhutan’s largest trad­ing part­ner. Ma­jor im­ports from In­dia to Bhutan are diesel, parts of hy­draulic tur­bines in­clud­ing reg­u­la­tors, fer­rous prod­ucts, petrol, wood char­coal, other coal, coke and semi coke, Port­land ce­ment, min­eral prod­ucts, base met­als and ar­ti­cles, ma­chin­ery, au­to­mo­biles & spares, an­i­mal prod­ucts, chem­i­cals, wood, plas­tic, rub­ber and agri­cul­tural prod­ucts. The ma­jor items of ex­port from Bhutan to In­dia are elec­tric­ity from the four hy­dropower plants at Basochhu, Chukha, Tala and Kurichhu; Ferro sil­i­con, Port­land ce­ment, dolomite, car­bides of cal­cium, car­bides of sil­i­con, ce­ment clink­ers, tim­ber and wood prod­ucts, and a range of agri­cul­tural prod­ucts. With the be­gin­ning of 2017, Bhutan has also ini­ti­ated move­ment of goods to Bangladesh through Bangla­bandha in­land port. No­tably, Bhutan, Bangladesh and In­dia had signed a tri­par­tite agree­ment in 1997 for land move­ment of goods and re­cently In­dia has also ini­ti­ated ef­forts for broader trade re­la­tion with Bhutan and Bangladesh through land move­ment of EXIM goods. Jaigaon acts as the most im­por­tant bor­der trad­ing point be­tween In­dia and Bhutan, cater­ing to around 90 per cent of the Bhutan trade. Re­cently, ef­forts have been ini­ti­ated to de­velop Jaigaon In­te­grated Check Post (ICP) to pro­vide seam­less goods move­ment. The lo­ca­tion of the ICP is be­ing con­sid­ered at a green field site at Balon Chopati si­t­u­ated on Pasakha Ac­cess road por­tion of the Asian High­way 48. More­over, Bangladesh, Bhutan, In­dia and Nepal Mo­tor Ve­hi­cle Agree­ment is en­vi­sioned to im­prove eco­nomic co-op­er­a­tion in the re­gion. A new agree­ment on Trade, Com­merce and Tran­sit be­tween In­dia and Bhutan has come into force with ef­fect from 29th July 2017. Bhutan in re­cent years has been en­cour­ag­ing FDI and pub­lic–pri­vate part­ner­ships in in­fra­struc­ture projects. While Bhutan’s do­mes­tic mar­ket is small, the coun­try’s special re­la­tion­ship with In­dia of­fers duty free ac­cess to In­dia and pref­er­en­tial ac­cess to the sub-con­ti­nent through SAFTA. Duty free and pref­er­en­tial ac­cess also ex­ists on cer­tain goods from Bhutan to the

EU, US and cer­tain other coun­tries in the re­gion. Due to Bhutan’s lim­ited fi­nan­cial and re­source ca­pac­ity, it of­fers sig­nif­i­cant op­por­tu­nity for projects in the ar­eas of air­port in­fra­struc­ture, high­ways, bridges, tun­nels, ca­ble cars, and lo­gis­tics fa­cil­i­ties such as dry ports, among oth­ers.

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