New Delhi, Oct 27 (KNN) In a move that would strengthen the regional value chain, the Union Cabinet has approved an Agreement on Trade, Commerce and Transit between India and Bhutan.

Presently, the bilateral trade relations between India and Bhutan are governed by the Agreement on Trade, Commerce and Transit between the Government of India and Bhutan. The Agreement provides for a free trade regime between two countries.

The Agreement also provides for duty free transit of Bhutanese merchandise for trade with third countries.

The Agreement was renewed on 29th July 2006 for a period of ten years. The validity of this Agreement was extended, with effect from 29th July 2016, for a period of one year or till the new agreement comes into force, through exchange of Diplomatic notes.

The traditionally unique bilateral relations characterized by trust and understanding between India and Bhutan have matured over the years and would be further strengthened by execution of the proposed Agreement on Trade, Commerce and Transit Agreement.

India is Bhutan’s largest trading partner. Major imports from India to Bhutan are diesel, parts of hydraulic turbines, including regulators, ferrous products, petrol, wood charcoal, other coal, coke and semi coke, portland cement, husked brown rice, mineral products, base metals and articles, machinery, automobiles & spares, vegetables, nuts, spices, processed food and animal products, chemicals, wood, plastic and rubber.

The major items of export from Bhutan to India are electricity from the four Hydropower Plants of Basochhu, Chukha, Tala and Kurichhu (a total of 1840MW of electricity is generated, out of which about 460MW is consumed domestically and the rest, exported to India), ferro silicon, portland cement, dolomite, carbides of calcium, carbides of silicon, cement clinkers, timber and wood products, potatoes, cardamom, fruit products etc.

During the last financial year, India exported goods worth over USD 440 million to Bhutan and imports were valued around USD 280 million. (KNN Bureau)