Press Information Bureau

Government of India

Ministry of Commerce & Industry

03-February-2012 15:25 IST

India Exempts Essential Commodities to Bhutan from Export Bans Target of Developing 10000MW Hydropower in Bhutan on Schedule India-Bhutan trade to Double in less than Five Years: Anand Sharma

Bhutan has expressed happiness over acceptance of their request of exemption from application of any export bans on essential commodities. The Minister of Commerce, Industry and Textiles, Shri Anand Sharma, during his meeting with Mr. Lyonpo Khandu Wangchuk, Minister for Economic Affairs of Bhutan ,here today, informed that Director General of Foreign trade has issued notification exempting Bhutan from the application of export ban on Milk Powder, Wheat, Edible Oil, Pulses and Non-Basmati Rice with annual limits indicated by the Bhutanese side. “India values the special relationship with Bhutan and we will be happy to expand our multifaceted cooperation which already covers key sectors such as hydropower, health, education, human resource development, media, telecom, ICT and infrastructure” said Shri Anand Sharma.

Both leaders expressed satisfaction that progress in meeting the target of developing 10,000 MW of hydropower capacity in Bhutan by 2020 is on schedule. Bhutan has an estimated hydropower potential of 30,000 MW with a little over 1,472 MW harnessed. Three major hydroelectric power projects (HEPs) have been built with Indian assistance in Bhutan - 336 MW Chukha, 60 MW Kurichhu and 1020 MW Tala HEPs. In July 2006, India and Bhutan signed an Agreement wherein India agreed to develop and import 5000 MW of electricity from Bhutan by 2020. This target was revised to 10,000 MW during PM’s visit to Bhutan in May 2008.

Bhutan has been requesting for Ghasuapara and Dalu in Meghalaya on Indo-Bangladesh border as on exit/entry points for Bhutan’s trade with Bangladesh. Shri Anand Sharma informed that the Letter of Exchange (LOE) has been signed for allowing LCSs from 1st February, 2012. Similarly, The Letter of Exchange (LoE) to amend the Letter of Guarantee (LoG) under the India-Bhutan Agreement on Trade, Commerce and Transit has been finalised for implementation from 01.02.2012.

Total trade between the two countries has been increasing. Total exports to Bhutan were $ 176.00 million while total imports from Bhutan were $ 201.57 million during 2010-11. India’s trade balance with Bhutan has turned negative from 2006 i.e. India imports more than it exports to Bhutan. Both the Minister expressed the confidence that the trade can be diversified and also be doubled in less than 5 years.

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Exemption from export bans allows essential commodities to cross borders under annual limits following official notification and exchange. An official notification exempts specified essential commodities from export bans subject to annual quantity limits agreed by the importing party, while a Letter of Exchange and an amendment to the Letter of Guarantee implement designated exit/entry points and transit arrangements under the bilateral Trade, Commerce and Transit framework.