𝐁𝐡𝐮𝐭𝐚𝐧 𝐄𝐲𝐞𝐬 𝐃𝐞𝐞𝐩𝐞𝐫 𝐓𝐫𝐚𝐝𝐞 𝐏𝐚𝐜𝐭 𝐰𝐢𝐭𝐡 𝐁𝐚𝐧𝐠𝐥𝐚𝐝𝐞𝐬𝐡

Bhutan is exploring the possibility of signing a Free Trade Agreement (FTA) with Bangladesh as the two countries seek to strengthen economic cooperation and expand bilateral trade beyond the existing Preferential Trade Agreement (PTA).

According to reports from Bangladeshi media, Bangladesh has asked Bhutan to submit a formal proposal outlining its interest in negotiating an FTA. This came after Bhutan expressed its intention to upgrade the current trade arrangement during a the 10th Commerce Secretary Level Meeting (CSLM) between the two countries. which was held from 9 – 10 March 2026 in Dhaka, Bangladesh.

Bangladesh’s Commerce Secretary Mahbubur Rahman was quoted in the Daily Star as saying that once Bhutan submits its proposal, it will be forwarded to the Technical Committee on Trade for evaluation before a final decision is taken.

FTA typically provides broader tariff reductions, improved market access, and enhanced cooperation in areas like customs procedures, logistics, and trade facilitation.

During the meeting, Bhutan  made requests to expand the number of products eligible for duty-free access under the existing PTA.

Currently, Bangladesh grants duty-free access to 34 Bhutanese products. Bhutan allows duty-free entry for 100 Bangladeshi goods.

Bhutanese officials have proposed increasing the number of Bhutanese products covered under the agreement to help boost exports to the Bangladeshi market.

Trade analysts say expanding duty-free access could benefit Bhutanese exporters, particularly in sectors such as agriculture, agro-processing, and niche manufacturing.

Another key issue discussed during the talks was Bhutan’s access to seaports in Bangladesh.

During the discussions, the Bhutanese delegation proposed using Chattogram Port, Bangladesh’s largest seaport, for imports and exports.

Bangladesh’s Commerce Secretary said Dhaka would review Bhutan’s request to use the port.

In the meantime, Bangladesh has indicated that Bhutan may use Pangaon Inland Container Terminal in Keraniganj and Khanpur River Port in Narayanganj for transporting goods.

Officials said these facilities could provide Bhutan with additional options for accessing global shipping networks.

Recently, Bhutanese importers conducted a trial shipment from Thailand through Chattogram Port, marking an important step in exploring alternative trade routes.

If Bhutan is granted regular access to Chattogram Port, relevant government agencies—including the ministries responsible for road transport and shipping—would determine the fee structure for the use of port facilities.

In December 2020, the two countries signed the Bhutan-Bangladesh PTA, marking a milestone in their economic partnership. The agreement was particularly significant for Bangladesh, as it represented the country’s first bilateral trade agreement with any nation.

Under this both countries committed to providing preferential market access to selected products.

Bangladesh granted duty-free access to 34 Bhutanese products, including items such as fruit juices, mineral water, boulders and stones, gypsum, and certain agricultural goods.

Bhutan offered duty-free entry to 100 Bangladeshi products, including textiles, processed foods, pharmaceuticals, and consumer goods.

Trade between Bhutan and Bangladesh has grown gradually since the agreement came into effect, although the overall volume remains modest compared with Bhutan’s trade with larger partners such as India.

Bangladesh is considered an important potential export market for Bhutan due to its large population and expanding economy. Bangladesh also represents a significant opportunity for Bhutanese exporters seeking to diversify their markets.

Bangladesh’s economy has experienced rapid growth in recent years and improved market access through an expanded PTA or a future     FTA could enable Bhutanese producers to increase exports of niche products such as organic food, natural mineral water, and environmentally sustainable goods.

“Bangladesh offers a large and growing market for Bhutanese products,” a Bhutanese trader said. “Strengthening trade agreements could help Bhutan diversify its export base and reduce dependence on a single market.”

Another important factor in strengthening Bhutan-Bangladesh trade is improving logistics and connectivity. “Access to maritime ports is critical for landlocked countries like Bhutan,” an official from the trade department said. “It allows exporters to reach global markets more efficiently.”

The proposal for a free trade agreement represents an important step in Bhutan’s broader strategy to diversify trade partnerships and strengthen regional economic cooperation.

If negotiations move forward, an FTA could deepen economic integration between Bhutan and Bangladesh by expanding market access, improving trade facilitation, and encouraging investment flows between the two countries.

Officials say discussions are still at an early stage, and further consultations will be required before formal negotiations begin.

However, both countries have indicated strong interest in strengthening economic ties and exploring new opportunities for collaboration. For Bhutan, expanding trade partnerships beyond traditional markets could play an important role in supporting economic diversification and long-term growth.

Tashi Namgyal

From Thimphu