Smooth flow of trade between Bhutan and India expected: Agriculture Minister

In 2020, 43,850MT of vegetable export to India has been recorded of value worth Nu 2.5bn

Following the Commerce Secretary Level Meeting (CSLM) between Bhutan and India in Delhi last month, there is likely to be a smooth flow of trade between the two countries, according to Agriculture and Forests Minister Yeshey Penjor.

The minister was responding to the question from the Member of Parliament (MP) from Bartsham – Shongphu constituency, Passang Dorji, (PhD), who questioned about the problems confronted by Bhutanese farmers in exporting vegetables to India.

 The MP added that exporting domestic goods is plagued with huge problems, and asked the minister about the measures to facilitate export.

Responding to the question, Lyonpo Yeshey Penjor said the CSLM was held to promote and facilitate trade and commerce between the two countries. However, due to the Covid-19 pandemic, the meetings could not be convened for the last few years.

“The CSLM 2021 reviewed the trade and transit issues including measures to further strengthen bilateral trade relations and issues of mutual interest, including ways to increase trade connectivity between the two countries,” Lyonpo said.

Lyonpo added that there were five broad agenda items in total which were considered favorably during the meeting. The Letter of Exchange to include seven additional entry and exit points in the Protocol to the Trade, Commerce, and Transit agreement between the two countries was also signed.

“The trade between the two countries has steadily grown over the years with India being the largest trading partner for Bhutan. In 2020, total trade value with India was recorded at Nu 95bn, accounting for 82% of Bhutan’s total trade,” Lyonpo added.

Lyonpo shared with the house that though the lockdown in Phuentsholing has been lifted, the export of vegetables will depend on the situation across the borders. The export via Jaigaon in India came to an abrupt halt when it was the peak time for farmers to export using Phuentsholing as the route.

“But if there are buyers across the borders, we must elevate exports for our farmers. It is important to keep this export channel proper and streamlined,” Lyonpo said.

“Export is ongoing and it must be done more as long as there are buyers across the borders,” Lyonpo said, adding that with the introduction of the Goods and Service Tax in India, there have been several new digital developments especially at the entry points (borders) that require documentation and adherence to domestic laws and regulations.

According to MoAF, the government will stick to formal trade which requires documentation and adherence to domestic laws and regulations after the border roads open but if the people insist on informal trade, it is up to the people to do business.  

Meanwhile, for decades, Bhutan has been exporting vegetables to India formally, but a majority of these vegetable exports have been informal including cash crops like areca nuts, cardamom, ginger, and oranges.

In 2020, 43,850MT of vegetable export to India has been recorded of value worth Nu 2.5bn and around 51,000MT of vegetable worth Nu 1.7bn till date, this year, to COTI (Countries Other than India).

 “Before the pandemic, most of the vegetable exports were informal where vegetables were sold easily with good rates. But the new taxation hampers all these informal trades,” Lyonpo said.

Agriculture Minister Yeshey Penjor said that importers in India need an import license and those vegetables being imported need to be notified as per the Plant Quarantine Order (PQO) of India for which a Pest Risk Analysis needs to be conducted.

“There are also other import conditions that need to be fulfilled while importing vegetables into India, such as sanitary and phytosanitary conditions, volume restrictions, minimum import price, and etc,” Lyonpo said, adding that the importers there aren’t aware of such requirements and in particular importers in the bordering areas.

Meanwhile, the government is exporting other goods from 17 entry and exit points, and to 14 countries, even during the pandemic, but at a reduced volume. 

Kinley Yonten from Thimphu