Businesses across the country have flagged tax and trade barriers, limited access to finance, labour shortages and weak infrastructure as some of the most persistent obstacles to doing business, as the Ministry of Industry, Commerce and Employment (MoICE) takes its regulatory reform consultations across the country.
The concerns emerged during the ministry’s nationwide Business Regulatory Process Review (BRPR) consultations, where businesses and residents have raised issues ranging from Goods and Services Tax (GST) cascading and licensing delays to inadequate access to Indian rupees, foreign-worker permit delays and difficulties moving goods across borders.
While the issues differ from one locality to another, trade- and finance-related constraints have emerged repeatedly, pointing to challenges that extend beyond individual businesses and into the wider business environment.
In areas dependent on cross-border trade, businesses said the inadequate availability of Indian rupees continues to affect transactions and day-to-day operations. Traders also raised concerns over bottlenecks at border gateways, high toll fees and the need for more efficient dry-port facilities to improve cargo movement.
For businesses, these issues translate into higher costs and delays in getting goods to market.
Access to finance remains another major concern. Participants said high interest rates and limited access to affordable financing are restricting investment, expansion and productive activities.
Participants said the financing problem is compounded by difficulties in accessing reliable markets for agricultural products. Without dependable market linkages, they said, increasing production does not necessarily translate into higher incomes.
Businesses also raised concerns over lengthy procedures for obtaining licenses and other approvals, saying delays in processing licenses are causing inconvenience to the establishment of new businesses and the expansion of existing ones.
Taxation has added to the concerns. Businesses pointed to cascading under the Goods and Services Tax (GST), where tax can accumulate at different stages of the supply chain, increasing business costs and ultimately affecting consumers.
The private sector also wants a greater role in national planning. Participants said businesses should be involved in shaping policies and development plans that affect investment and economic activity, rather than being consulted only after decisions have already been made.
Businesses facing shortages of skilled workers said restrictions and lengthy processing of foreign-worker permits made it difficult to fill vacancies and maintain operations. For industries dependent on foreign workers, delays in obtaining permits can directly affect their ability to meet demand.
Poor infrastructure, particularly road conditions, was also raised as a constraint. Businesses said unreliable roads increase transportation costs and travel time and can disrupt supply chains.
The consultations have also brought attention to gaps in public services and trade infrastructure. Discussions have covered border facilitation, customs and other government procedures, industrial infrastructure, licensing and export opportunities, reflecting a broader concern that regulatory reform alone may not be enough to ease the pressures facing businesses.
Tourism operators and stakeholders, meanwhile, raised the need for a coordinated emergency response mechanism for incidents involving international visitors.
Meanwhile, MoICE Minister Namgyal Dorji said not every district needs to pursue tourism and that regions should instead identify their own economic strengths and develop sectors suited to their local potential.
Samtse, he said, should not try to become a tourism destination simply because tourism is being promoted nationally, but should build on its strength as an industrial hub.
The government has also pointed to infrastructure investments as part of the response to trade-related constraints. With the completion of Nganglam Mega Dry Port, for instance, is expected to improve cargo movement and ease logistical difficulties for businesses.
Director General of the Department of Industry Chhime Tshering said the department is working on improving the Integrated Business Licensing Service (IBLS) system to strengthen trade and logistics processes.
The ministry has reassured participants that the concerns raised during the consultations will not remain on paper. The minister said the issues raised will be taken up for action, with the ministry expecting them to be discussed and resolved by the end of September.
For businesses, the value of the exercise will ultimately be measured not by the number of issues recorded, but by whether the reforms reduce the time and cost involved in obtaining licenses, accessing finance, moving goods, hiring workers and complying with tax requirements.
MoICE’s ongoing review has already identified a substantial number of regulatory issues nationwide, with the ministry reporting that 151 of 196 identified issues had been addressed, while 31 requiring higher-level intervention were being pursued further.
The minister said the nationwide consultations are therefore moving the discussion from identifying regulatory barriers to testing whether reforms are working for businesses on the ground.
The consultation has so far covered 16 districts, with three districts remaining before the nationwide exercise is completed.
Nidup Lhamo, Thimphu
