AGP Executive Report

Digital Payments & Trade Links: India’s UPI kept surging, with transaction volume up 27% to about 145 billion in the first half of FY27, ahead of new merchant discount rate (MDR) charges on high-value payments—an important signal for regional cashless commerce that Bhutan businesses watch closely. Infrastructure & Urban Resilience: Gelephu’s flood protection project is now complete and handed over to Gelephu Mindfulness City, strengthening vulnerable river stretches in Sarpang to support safer growth under the Mindfulness City push. Health & Innovation Economy: Druk Holding & Investments partnered with the US Tower Council Foundation to build a “generational health” ecosystem—research, clinical practice, data and innovation—aimed at creating new health-sector opportunities for Bhutan’s innovation-led economy. Hydropower Supply Chain: ANDRITZ won a contract to supply four turbine-generator units for Bhutan’s 600MW Khorlochhu hydropower project, supporting the country’s green power expansion. Regional Conservation & Tourism Potential: Bhutan’s wider Himalayan region saw tiger reintroduction momentum in India’s Buxa Tiger Reserve, with authorities planning more releases—an angle that could feed future cross-border eco-tourism interest. ICT & Cross-Border Business: Bhutan’s digital asset exchange BTSE received a financial services license for digital asset trading in Gelephu Mindfulness City, reinforcing the city’s push to attract investment and new services.

Bhutan-India Business & Health: TOWER Council Foundation and Druk Holding & Investments (DHI) announced a strategic partnership to build Bhutan’s “Generational Health” ecosystem, linking research, clinical practice, data and innovation to support long-term health and development. Hydropower Contract: ANDRITZ won a contract to supply four Pelton turbine-generator units for Bhutan’s 600MW Khorlochhu hydropower project in Trashiyangtse, supporting the country’s green power expansion. Gateway Tourism & Trade: Phuentsholing launched a new destination brand and digital visitor services under the Thromde Enhancement Programme, aiming to move travellers beyond transit and keep them longer in Bhutan’s busiest southern gateway. Regional Security Cooperation: BIMSTEC member states met in New Delhi for the 11th Joint Working Group on Counter Terrorism and Transnational Crime, including Bhutan, to coordinate action on terrorism, trafficking, illicit drugs and money flows. Economy Watch: ADB kept Bhutan’s 2026 growth forecast at 6.5% while raising its inflation projection. Cross-border Infrastructure: India’s Siliguri corridor security and logistics plans highlight the wider regional push to strengthen connectivity near Bhutan.

Hydropower Deal: ANDRITZ won a contract to supply four turbine-generator units for Bhutan’s 600MW Khorlochhu project in Trashiyangtse, supporting the country’s green power expansion. Health & Investment: TOWER Council Foundation and Druk Holding & Investments (DHI) partnered to build Bhutan’s “Generational Health” ecosystem, linking research, clinical work, data and innovation with DHI’s 10X strategy. Tourism & Trade Gateway: Phuentsholing launched a new destination brand and digital visitor services to help the southern entry town move beyond “transit” and attract longer stays. Regional Security Cooperation: Bhutan attended the BIMSTEC counter-terrorism and transnational crime working group meeting in New Delhi, focused on threats like trafficking, illicit drug flows, money laundering and radicalisation. Macro Outlook: ADB kept Bhutan’s 2026 growth forecast at 6.5% but raised its inflation projection, keeping cost pressures in focus for businesses. Cross-Border Movement: Assam prepared a temporary immigration office near the India-Bhutan border ahead of Bhutan’s “Project 108” events, aiming to manage expected visitor flows.

Bhutan’s SME growth angle: A new business opportunity is emerging for Bhutan’s SMEs as the country shifts from GDP-only thinking toward Gross Ecosystem Product (GEP), tying economic value to nature and sustainability. Energy & tech for resilience: DrukSmart Talks 2026 highlighted how Industrial AI, digital twins and predictive intelligence could help Bhutan’s hydropower operators move from reactive maintenance to earlier fault detection and better planning around water availability and demand. Tourism gateway upgrade: Phuentsholing launched a destination brand plus digital visitor services and new experiences to encourage longer stays, aiming to move the southern entry point beyond “transit” and support local businesses. Regional security cooperation: Bhutan joined BIMSTEC talks in New Delhi on counter-terrorism and transnational crime, reviewing threats and sub-group work on trafficking, illicit drugs, money laundering and radicalisation. Macro outlook for Bhutan: ADB kept Bhutan’s 2026 growth forecast at 6.5% but raised its inflation projection, keeping cost pressures in focus for businesses and households. Cross-border movement for Project 108: India’s Assam plans a temporary immigration office near the Dadgiri-Hatisar border ahead of Bhutan’s November 1 “Project 108” programme, with thousands expected to pass through.

Crypto Regulation in Bhutan: BTSE Bhutan received a Financial Services License from the Gelephu Financial Services Office, allowing it to run a regulated virtual-asset trading facility and institutional custody under the GMC framework, with phased onboarding starting soon for BTC/USDT and ETH/USDT spot trading. Public Health Milestone: WHO validated Bhutan’s elimination of dog-transmitted human rabies as a public health problem, noting zero dog-mediated human deaths since June 2023 and highlighting Bhutan’s “One Health” systems. Energy Tech for Resilience: DrukSmart Talks 2026 explored how industrial AI, digital twins and predictive intelligence could help Bhutan shift from reactive hydropower maintenance to earlier fault detection and better planning around water availability and demand. SME Growth Angle: A new business opportunity frames a move “From GDP to GEP” for Bhutan’s SMEs, tying enterprise planning to Gross Ecosystem Product thinking. Regional Security Cooperation: BIMSTEC’s 11th counter-terrorism and transnational crime working group meeting in New Delhi reviewed threats like trafficking and illicit drug flows, including anti-money laundering and legal cooperation. Tourism & Trade Gateway: Phuentsholing launched a destination brand and digital visitor services to encourage longer stays, while Bhutan-India border logistics for “Project 108” are also shaping visitor flows.

Tourism & Trade: Phuentsholing is rolling out a new destination brand (“Prosperous Phuentshogling”), digital visitor services and online payments/booking plans under the Phuentshogling Thromde Enhancement Programme—aimed at shifting the border town from a quick transit stop to a place where travellers stay longer and spend more. SME Growth & Jobs: ADB kept Bhutan’s 2026 growth forecast at 6.5% but nearly doubled its inflation projection, a mix that matters for business costs and consumer demand. Digital Finance: BTSE Bhutan received a Financial Services License in Gelephu Mindfulness City to run a regulated virtual-asset trading facility and institutional custody; onboarding is set to start soon with BTC/USDT and ETH/USDT spot trading. Public Health & Risk: WHO validated Bhutan for eliminating dog-transmitted human rabies as a public health problem, supporting “One Health” prevention systems ahead of World Rabies Day. Energy & Tech: DrukSmart Talks 2026 highlighted how AI could move Bhutan’s hydropower operations from reactive maintenance to predictive decision-making. Regional Security: BIMSTEC counter-terrorism talks in New Delhi included Bhutan and focused on traditional and emerging threats, plus cooperation on trafficking and money-laundering.

Crypto Regulation in Gelephu Mindfulness City: BTSE Bhutan has secured a Financial Services License from the Gelephu Financial Services Office, allowing it to run a regulated virtual-asset trading venue and institutional custody, with phased onboarding starting soon for BTC/USDT and ETH/USDT pairs. Public Health Milestone: Bhutan was officially recognized by the WHO for eliminating dog-transmitted human rabies as a public health problem, with zero human deaths since June 2023—backed by a long-running “One Health” approach. Healthcare Policy: Bhutan’s National Primary Health Care Forum 2026 is underway in Tsirang, focusing on a roadmap toward universal health coverage, including governance, digital health, workforce, traditional medicine and sustainable financing. Energy & Tech for Hydropower: DrukSmart Talks 2026 highlighted how industrial AI and predictive maintenance could help Bhutan’s energy sector move from reactive repairs to earlier fault detection and better planning around water and demand. Trade & Tourism Push: Bhutan’s Black Mountain festival (Oct 2-4) in Trongsa will spotlight local products and community experiences, while tourism initiatives also include digital branding for Phuentshogling. Regional Security/Connectivity: India hosted the 11th BIMSTEC counter-terrorism and transnational crime working group meeting with Bhutan among member delegations. Cross-Border Logistics: Assam is preparing a temporary immigration office at the Dadgiri-Hatisar border ahead of Bhutan’s “Project 108” programme on Nov 1.

Crypto Regulation in Gelephu Mindfulness City: BTSE Bhutan has secured a Financial Services License from the Gelephu Financial Services Office, allowing it to run a regulated virtual-asset trading venue and provide institutional custody, with phased onboarding starting with BTC/USDT and ETH/USDT spot pairs. Digital Finance Expansion: BTSE also frames the launch as a step toward a broader retail crypto platform, with fiat on- and off-ramps planned later. Public Health Milestone: Bhutan received WHO validation for eliminating dog-transmitted human rabies as a public health problem, with zero human deaths since June 2023—an outcome tied to its “One Health” rabies control programme. Tourism & Brand Recognition: The Postcard Hotel won 12 World Travel Awards 2026 honours across Asia, including multiple “Leading” titles spanning boutique, wildlife and mountain resort categories that include Bhutan properties. Healthcare Policy Forum: Bhutan’s National Primary Health Care Forum 2026 begins in Tsirang, focusing on a roadmap toward universal health coverage, including governance, digital health, workforce and financing. Tourism Development: Chhukha launched sustainable tourism initiatives for Phuentshogling, including a new brand identity with digital tools and a regulatory sandbox work stream. Aviation & Trade Linkages: LGBI Airport’s new “Bamboo Orchids” terminal was highlighted as a top global airport design, reinforcing its role as a gateway for tourism and commerce.

Bhutan Health & Policy: Bhutan has been certified rabies-free by the WHO, with no human deaths from dog-transmitted rabies since June 2023, credited to a long-running “One Health” approach and community-wide action. Primary Healthcare & UHC: Bhutan’s National Primary Health Care Forum 2026 is underway in Tsirang, focusing on a roadmap to universal health coverage, including governance, digital health, workforce, traditional medicine and sustainable financing. Tourism & Local Economy: On World Tourism Day, Bhutan launched sustainable tourism initiatives in Phuentshogling, including a new “Prosperous Phuentshogling” brand with digital tools, online payments and a booking platform. Business & Growth: Bhutan is targeting at least two home-grown enterprises to reach USD 50M+ valuation by 2030, with technology flagged as a key growth area but finance and collateral still major hurdles. Food Security: Bhutan’s agriculture report highlights crop losses despite higher production, with thousands of tonnes lost to climate impacts, pests/diseases and human-wildlife conflict. Culture & Events: The Black Mountain festival returns in Trongsa (Oct 2-4), with community experiences, local products and a highway activation to boost tourism spending.

Public Procurement: Bhutan Broadcasting Service Corporation re-invites sealed quotations for shelters, towers, fencing, and earthling, AC and ventilation installation—bidders must pay BTN 2,000 bid cost. Tourism & Trade Links: Thailand’s Tourism Authority renews its Japan partnership and launches a co-tourism push with Bhutan ahead of Bhutan’s European market expansion next year. Local Entrepreneurship: Thimphu’s first ramen shop, Hayate Ramen, marks its 10th anniversary and is drawing steady demand despite high-altitude cooking challenges. Climate Diplomacy: Bhutan joins Nepal’s UNGA push “Sagarmatha to the Sea,” framing Himalayan-to-ocean climate risks as interconnected and calling for coordinated action. Business Growth Plan: Bhutan targets at least two home-grown enterprises reaching USD 50M+ valuation by 2030, but finance and sector identification remain key hurdles. Food Security Pressure: Bhutan’s agriculture report flags thousands of tonnes of crops lost to climate impacts, pests, and human-wildlife conflict, underlining that higher production doesn’t always reach markets.

Bhutan-EU Cooperation: Bhutan and European Parliamentarians met in Bhutan to discuss climate, energy resilience, adaptation finance and digital transformation, with EU support tied to sustainable development and LDC graduation. Trade & Logistics: Bhutan’s Mega Dry Port in Pasakha is completed and ready for operations, aiming to centralize customs and clearance agencies, cut congestion at Phuentshogling, and handle up to 100 truckloads a day. ICT Sector Challenge: A new report flags a policy-to-practice gap in Bhutan’s ICT industry, citing skills shortages, financing constraints and red tape as key hurdles. Entrepreneurship Push: Bhutan’s National Entrepreneurship Strategy 2026 targets at least two home-grown enterprises reaching USD 50M+ valuation by 2030, but finance and scaling bottlenecks remain. Food Supply Losses: Bhutan’s agriculture report shows thousands of tonnes of crops lost to climate impacts, pests, disease and human-wildlife conflict, underlining that higher production doesn’t automatically mean more food reaches markets. Regional Context: Nepal used UNGA events to push “mountains to sea” climate action, while Bhutan’s leaders also featured in regional climate diplomacy.

Bhutan’s New Growth Metric: Bhutan became the first country to adopt Gross Ecosystem Product (GEP) nationally, valuing ecosystem services at about US$6.2bn for 2024 and positioning it alongside GDP and Gross National Happiness. Parliament-to-Policy Push: Bhutan and EU parliamentarians met in Bhutan to discuss climate resilience, renewable energy, education and digital transformation, with emphasis on adaptation finance and resilient infrastructure. Trade Logistics Upgrade: Bhutan’s Mega Dry Port in Pasakha is completed and set to begin operations, aiming to centralize customs and clearance agencies, cut pressure on Phuentshogling, and handle up to 100 truckloads a day. Regional Climate Diplomacy: Nepal hosted “Sagarmatha to the Sea” at the UN with Bhutan as co-host, calling for integrated action from mountains to oceans and highlighting shared climate risks. ICT Industry Bottlenecks: A report flags skills, financing and red tape as key hurdles slowing Bhutan’s ICT sector from policy ambition to real delivery.

Trade & Logistics: Bhutan’s Mega Dry Port in Pasakha is completed and is set to start operations, aiming to streamline cargo clearance and reduce pressure on Phuentshogling by bringing key trade agencies under one roof. Climate & Energy Diplomacy: Bhutan and European Parliamentarians met in Bhutan to discuss climate resilience, renewable energy, education and digital transformation, with a clear focus on adaptation finance and resilient infrastructure. Green Economy Policy: Bhutan became the first country to adopt Gross Ecosystem Product (GEP) nationally, valuing ecosystem services at about US$6.2bn for 2024 alongside GDP and Gross National Happiness. UN Business-Climate Link: Bhutan’s PM Tshering Tobgay pitched Gelephu Mindfulness City at UNGA, positioning GMC as a development and investment idea tied to Bhutan’s broader climate and resilience agenda. Payments & Regional Tech: UPI is now accepted in 11 countries including Bhutan, with India’s new UPI MDR framework from Oct 15 raising questions on how merchant charges may apply across borders. ICT Sector Challenge: A report highlights hurdles facing Bhutan’s ICT industry, pointing to a gap between policy ambition and on-the-ground implementation.

Climate Diplomacy: Nepal used UNGA week to push a coordinated “Sagarmatha to the Sea” climate call, led by Foreign Minister Shishir Khanal, linking Himalayan risks to island and coastal impacts and urging integrated action. Regional Resilience Proposal: Nepal PM Balendra Shah floated a Himalayan Climate Resilience Mechanism with Nepal, India and China, calling for shared satellite monitoring, joint early-warning and cross-border disaster coordination. Bhutan’s Economic-Environment Shift: Bhutan became the first country to adopt Gross Ecosystem Product nationally, valuing ecosystem services at about US$6.2bn for 2024 alongside GDP and GNH. Trade Logistics: Bhutan’s Mega Dry Port in Pasakha is completed and set to start operations, aiming to streamline customs and cargo clearance and ease pressure on Phuentshogling. ICT & Digital Economy: Bhutan’s ICT industry still faces a gap between policy ambition and on-the-ground delivery, with hurdles around skills, financing and red tape. Payments & Cross-Border Links: UPI is now accepted in 11 countries including Bhutan, as India prepares MDR changes from Oct 15, 2026. UNGA Networking: Bhutan PM Tshering Tobgay met other leaders during UNGA, with discussions spanning trade, investment and bilateral cooperation.

Gross Ecosystem Product (GEP): Bhutan became the first country to adopt Gross Ecosystem Product nationally, valuing ecosystem services at about US$6.2bn for 2024 and positioning it alongside GDP and Gross National Happiness. Trade & Logistics: Bhutan’s Mega Dry Port in Pasakha is completed and now awaits operations, a Nu 1.2bn facility meant to streamline cargo clearance, reduce pressure on Phuentshogling, and cut heavy-vehicle movement. Payments & Cross-border Ease: UPI is now accepted in 11 countries including Bhutan, with India’s new UPI MDR framework set to start from Oct 15, raising questions on whether merchant charges will apply overseas. Regional Climate Diplomacy: Nepal’s PM Balendra Shah used the UNGA to argue for climate justice and proposed a Himalayan Climate Resilience Mechanism led by Nepal, India and China—an approach that directly links regional risk management with cross-border cooperation. Digital Banking Linkages: Bangladesh Bank issued letters of intent for digital banks, including DK Digital Bank backed by Bhutan’s DK Bank, as part of a push toward branchless banking and wider financial inclusion.

Gross Ecosystem Product (GEP): Bhutan has become the first country to adopt Gross Ecosystem Product at national level, valuing ecosystem services at about US$6.2bn for 2024, with PM Tshering Tobgay announcing it in New York alongside Climate Week and the Science Summit. UN Climate Diplomacy: Nepal’s PM Balendra Shah used the UNGA to push that “climate justice” can’t stay only in UN documents, proposing a Himalayan Climate Resilience Mechanism led by Nepal, India and China to share satellite data, strengthen early warnings and coordinate cross-border disaster response. Payments Policy Watch: India’s new UPI Merchant Discount Rate (MDR) rules from Oct 15 could extend to 11 overseas markets where UPI is available, including Bhutan, raising questions for foreign merchants while travellers are expected to avoid the levy. Bhutan-Linked Finance: Bangladesh Bank issued letters of intent for five digital banks, including DK Digital Bank backed by Bhutan’s DK Bank, moving them to the next step before full licences. Aviation & Tourism Connectivity: Pokhara’s first daily international flight (Flydubai to Dubai) marks a major boost for Nepal’s tourism access, but the key question is whether the government can sustain decentralised international connectivity.