Certification and standardisation for trade with other countries through which Bhutan will be able to trade with about 185 different countries, construction of mini dry ports, increased tax on goods imported which can be made within the country and others were some of the measures highlighted by the minister of Foreign Affairs and External Trade, to narrow trade deficit.
This was highlighted during the 8th sitting of the 9th session of the Third Parliament, as Member of Parliament (MP) Gyambo Tshering from Bardo-Trong constituency asked the minister of foreign affairs and external trade (MoFAET), Dasho Dr Tandi Dorji, on issues regarding the negative balance of trade deficit. He said that it has dramatically increased and asked the government’s plans, programs and strategies to promote local industries, import substitution and stimulate export.
The MP said that during the year 2021, the trade deficit accounted to about Nu 32bn and similarly in 2022 the trade deficit accounted to about Nu 62bn. Import has increased to 31% and the export decreased to Nu 12bn.
On the concern raised by the MP, the foreign and external trade minister said that since 1961, the country started to import various commodities and even today about 91% of the commodities is import oriented.
“Today, because of the importance of IT, technological equipment about Nu 12bn worth were imported, followed by, essential oil of about Nu 11bn, rice of about Nu 3bn and mobile phones worth Nu 2bn,” the minister said, adding that, only about Nu 34bn worth were exported. It included ferrosilicon worth Nu 19bn, followed by electricity, mines and minerals.
The minister also shared to the house that the pandemic affected export route of the mines and minerals though there wasn’t problem in export of electricity.
“Before our country was allowed to export only asparagus and other commodities was not allowed with certain terms and conditions, however, the royal government has negotiated with the neighbouring countries on such issues,” the minister said, saying these were lessons learned from the Pandemic.
In addition, the minister said that the royal government has built mini-dry ports in Pasakha, Nganglam, Samdrup Jongkhar, Samtse, Gelephu, amongst others which will be helpful in the future. Industrial estates have been opened to give opportunity for local industry growth.
The minister informed that there are about 20 individuals who are interested in the ferrosilicon industry. “But with insufficient electricity, the royal government has to hold them,” he said, adding it is the reason why Bhutan is venturing into construction of small hydro power projects.
The minister shed light on some of the plans, programs and strategies in the house. It included the recent trade agreements with Bangladesh, preferential trade agreement with Thailand and Bangladesh, trade fair for 6 months that was held last year in Dubai. Currently about 20 people are in a trade fair in Australia. Similar trade fairs were conducted in Thailand and Bangladesh, amongst others.
In addition, the minister said that the royal government has been imposing high tax on the import of goods which are available in the country and less tax on commodities exported.
Meanwhile, the country is currently discussing with the government of India and Singapore for trade certification and standardization.
Sherab Dorji from Thimphu