Trade Agreement Between Bhutan And India

There is a free trade system between Bhutan and India. The framework for trade relations is the India-Bhutan Friendship Treaty of 2007. The Trade, Trade and Transit Agreement was first signed in 1972 and is renewed every ten years. It was last renewed in July 2006 and the meeting between Bhutan and India on the renewal of the Bhutan-India Agreement on Trade, Trade and Transit was held in New Delhi from 5-6 July 2016. On 12 November 2016, Nirmala Sitharaman (Independent Government) responsible for trade and industry, the Indian government and Lyonpo Lekey Dorji, Bhutan`s economy minister, signed the new trade, trade and transit agreement between India and the Royal Government of Bhutan on 12 November 2016. On August 8, 1949, Bhutan and India signed the Friendship Treaty in which they called for peace between the two nations and non-interference in the internal affairs of the other. [9] However, Bhutan agreed to let India “conduct” its foreign policy and the two nations would work closely together on foreign and defence policy issues. The treaty also introduced free trade and extradition protocols. [9] Scholars consider the effect of the treaty by making Bhutan a protected state, but not a protectorate, because Bhutan still has the power to conduct its own foreign policy. [3] [10] The 1972 trade and transit agreement between India and Bhutan established a free trade regime between the two countries. The first trade and trade agreement between India and Bhutan was signed in 1972. Since then, the agreement has been renewed five times.

The last agreement was renewed in November 2016. The agreement also provides for duty-free transit of Bhutanese exports to third countries. In 2018, bilateral trade reached Rs/Nu. 9228 Cr. Imports from India were imports from India. 6011 The cr. accounts for 84% of Bhutan`s total imports. Bhutan`s exports to India amounted to Rs/nu. 3217 children (including electricity) and 78% of their total exports.

In accordance with the bilateral trade agreement, the Indian government reimburses excise duties on imports from the Country of India and this reimbursement has been increased from 291 crs for 2015 to 400.11 million euros for 2016. Bilateral trade is conducted in Indian Ruupie, which is entirely by Ngultrum. Although Bhutan has a negative trade balance with India, the balance of payments with India ended last year with a surplus. A few years ago, a shortage of rupees led to a sharp condensation of imports. However, the medium-term outlook is good, as hydel capacity is expected to increase from 1600 MW currently to nearly 5000 MW over the next five years. More than 90% of the electricity generated is exported to India. Although relations have remained close and friendly, the Bhutanese government has expressed the need to renegotiate parts of the treaty in order to strengthen Bhutan`s sovereignty. [9] Bhutan slowly began to maintain an independent position on foreign policy by associating the United Nations in 1971, recognizing Bangladesh and signing a new trade agreement in 1972 that exempted export duties from Bhutan`s products to third countries.

[9] Bhutan also exercised its independent position at the United Bloc Movement (NAM) summit in Havana, Cuba, in 1979, voting with China and some Southeast Asian countries, not With India, on the issue of Cambodian Khmer Rouge participation in the conference. [9] Unlike Nepal, where the 1950 treaty with India was the subject of great political controversy and nationalist resentment due to Indian immigrants to Nepal, the nature of Bhutan`s relations with India was not influenced by concerns about the treaty`s provisions. [11] [14] From 2003 to 2004, the Royal Bhutanese Army conducted operations against the anti-Indian insurgents of the Assam Liberation Front (ULFA), who operated bases in Bhutan and used their territory to carry out attacks on Indian soil. [15] The bilateral meeting on trade and transit between Bhutan and India to discuss trade-related issues takes place at inter-independence