India opens additional trade routes for the movement of goods between India and Bhutan

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Published: July 22, 2020 5:07 PM

Bhutan is India’s closest partner and New Delhi continues to positively engage with neighbouring country in an effort to boost trade between the two countries.

This is possible through enhanced connectivity, among others and will help in trade growth with the North Eastern States.

Post COVID-19, for further enhancing the movement of industrial raw materials and goods, India has in response to the request of the Royal Government of Bhutan, opened up an additional trade route under Jaigaon Land Customs Station (LCS). As a temporary measure, this was opened up at Ahllay, Pasakha last week on July 15. Bhutan is India’s closest partner and New Delhi continues to positively engage with neighbouring country in an effort to boost trade between the two countries. This is possible through enhanced connectivity, among others and will help in trade growth with the North Eastern States.

“This will help in the movement of heavy industrial raw materials and goods heading towards Pasakha Industrial Estate. While helping in boosting bilateral trade & commerce, it will help in the decongestion of vehicular traffic along the Jaigaon – Phuentsholing route,” a source confirmed to Financial Express Online.

Under an agreement on Trade, Commerce and Transit which was last renewed in 2016, it allows for free trade and commerce between India and Bhutan. The agreement also talks about 21 entry/exit trade points, including ten trade points with Land Customs Stations at the Indo-Bhutan border.

Some of these trade points are also used by Royal Government of Bhutan for trade with third countries.

Other initiatives being taken by India for strengthening relations with Bhutan

A feasibility study for establishing a railway link between Mujnai (West Bengal) and Nyoenpaling (Bhutan) has already commenced.

Land Ports Authority of India has also identified Jaigaon (Alipurduar District of West Bengal) for development of an Integrated Check Post.

The trade between India and Bhutan at Jaigaon-Phuentsholing border trade point is around Rs 6000 crores annually, which is much bigger in value terms compared to some of the existing ICPs.

According to sources, the trade with countries other than India through this border trade point is an additional Rs 1400 crores annually. And this trade point caters to around 75 per cent of the overall trade between the two countries and around 74 per cent of Bhutan’s overall trade with the world including India.

Bhutan has requested to notify Jitti-Nagrakata LCS as Permanent LCS, because in 2013, this was notified as Seasonal LCS for trade in three crops namely Orange, Ginger and Cardamom.

Now, the request has been made for facilitating the export of boulders and river bed materials to India and Bangladesh particularly since the Bhutanese exporters are finding it difficult to export these products through the nearest Permanent LCS (Loksan-Bhimtar) due to high transportation costs and restriction on load capacity of river bridges enroute.

The bilateral trade between the two countries stood at Rs 9227 crores in 2018. Bhutan imports base metals, vehicles, vegetable products, plastics, mineral products, machinery and mechanical appliances, electrical equipment and articles from India. And it exports wood products, potatoes, cardamom and fruit products, electricity, portland cement, dolomite, and timber.

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