AGP Executive Report

ADB Solar Push for Bhutan: The Asian Development Bank approved a US$160 million loan to expand Bhutan’s solar capacity by 310MW through three projects, including 120MW Wobthang and 40MW Pedseling in Bumthang by DGPC, plus a 150MW Dramthang project in Lhuentse via a DGPC–Tata Power Renewable Energy joint venture, with Bhutan Power Corporation building 46km of transmission lines to cut winter import reliance. Energy Project Kickoff: Construction has started on Bhutan’s 100MW solar project at Tashithang Gewog, Samdrup Jongkhar, expected to support more reliable winter generation, with phased commissioning through 2028. Dry Monsoon Risk: A dry monsoon outlook for the Hindu Kush Himalaya region is raising crop-loss fears across Nepal, India, Bhutan and Pakistan, with experts warning that even fewer rains can still mean floods and landslides due to extreme bursts and heat. Cross-Border Payments Upgrade: NPCI partnerships with HSBC India and J.P. Morgan Payments will let Indian UPI users see real-time rupee costs for overseas payments and enable real-time FX conversion and settlement. Tourism & Trade Branding: Bhutan’s government signed a contract to brand and digitise Phuentsholing’s tourism push, aiming to reposition the border town as a destination with a dedicated online portal for visitors. Household Ritual Spending: Bhutan’s NSB reports households spend nearly Nu 28,000 annually on ritual activities, with higher-income families spending more in absolute terms while lower-income households allocate a larger share. Circular Economy in Action: Reverse vending machines in Gelephu, Paro and Phuentshogling have recovered over 7 million plastic containers nationwide, paying users per item and supporting local income.

Renewables Push in Bhutan: ADB approved a $160m loan for Bhutan’s Solar Farm Expansion Project, targeting at least 310 MW of new solar and grid upgrades, with private investment expected via Bhutan’s first private-majority public-private energy partnership. Solar Project Starts in Samdrup Jongkhar: Construction has begun on a 100MW solar plant in Tashithang Gewog, Samdrup Jongkhar, with phased commissioning (30MW by mid-2027; 70MW in early 2028). Circular Economy in Action: Reverse vending machines across Gelephu, Paro and Phuentsholing have recovered over 7 million plastic bottles and cans, paying users in Nu and keeping waste out of streets. Household Ritual Spending: Bhutan’s NSB reports households spend nearly Nu 28,000 a year on rituals (about 5% of consumption), with Wangdue and Punakha highest. Phuentsholing Tourism Branding: Government signed a contract to build destination branding and a digital tourism platform for Phuentsholing, aiming to turn the border town into a stay-worthy gateway. Cross-border Payments Upgrade: NPCI partnered with HSBC India and J.P. Morgan Payments to enable real-time FX settlement for overseas UPI transactions.

ADB Solar Push for Bhutan: The Asian Development Bank approved a $160m loan for Bhutan’s Solar Farm Expansion Project, targeting at least 310 MW of new solar capacity and grid modernization, with private-sector participation via Bhutan’s first private-majority public-private energy partnership. Phuentsholing Branding Drive: Bhutan’s Phuentsholing Thromde Enhancement Programme has signed a contract to build destination branding and a digital tourism platform, aiming to shift the border town from “transit” to a stay-worthy destination. Cross-border UPI Gets More Transparent: NPCI partnered with HSBC India and J.P. Morgan Payments to enable real-time FX conversion and settlement for overseas UPI payments, letting travellers see the exact INR amount at checkout; UPI is already live in Bhutan and other countries. Fuel Cost Relief in India, Ripple Effects for Bhutan Trade: India cut ATF by ₹5/litre from July 1 and revised export duties on petrol/diesel/ATF, while domestic excise taxes stayed unchanged—important for regional aviation and logistics costs. Digital Census Planning: Bhutan’s NSB is preparing PHCB 2027 as the country’s first fully digital census using CAPI, with UNFPA support. Tourism Investment Signals: Japan’s development cooperation to Bhutan is shifting toward a human security approach, prioritising resilience and livelihoods.

Digital Payments in Focus: UPI value moderated to ₹28.9 lakh crore in June (from a record ₹29.9 lakh crore in May) while annual growth stayed strong at ~20% YoY; volume slipped month-on-month to 22.72 billion, but the daily average hit a new high of 757 million—showing UPI’s push into low-value payments. Cross-Border UPI Upgrade: NPCI partnered with HSBC India and J.P. Morgan Payments to enable real-time FX conversion and settlement for international UPI transactions, letting users see the exact INR amount at checkout as UPI expands across countries including Bhutan. Fuel Costs & Aviation Relief: India cut domestic ATF by ₹5/litre to about ₹110/litre, easing a major airline cost, alongside revised export duties from July 1 (diesel/ATF down, petrol up) to protect domestic supply. Bhutan Development & Skills: Bhutan’s first batch of Climate Studies PhD graduates received certificates from CNR, building local expertise for climate-resilient agriculture and food systems. Census Modernisation: Bhutan is preparing PHCB 2027 as its first fully digital census using CAPI to improve data quality and speed. Entrepreneurship Push: Bhutan launched a National Entrepreneurship Strategy 2026 to tackle inactive licenses and help startups scale through regulatory, finance and market-access reforms. Tourism & Integrity: A Thimphu regional meet discussed measuring anti-corruption effectiveness, while Bhutan’s tourism investment drive and GI product launches aim to boost incomes and heritage-linked trade.

Digital Census Push: Bhutan’s NSB is preparing for PHCB 2027, set to be the country’s first fully digital census using CAPI devices to improve data quality and speed, with UNFPA support. Entrepreneurship Drive: Bhutan’s National Entrepreneurship Strategy 2026 aims to scale startups beyond survival by tackling regulatory hurdles, inactive licenses, and gaps in finance, skills, and market access. Cross-Border Payments: NPCI has partnered with HSBC India and J.P. Morgan Payments to enable real-time FX settlement for international UPI transactions, improving transparency for Indians paying abroad; UPI is already live in Bhutan and other countries. Tourism Policy Watch: NITI Aayog flags India’s licensing overload and restrictive visas as key brakes on tourism growth, urging visa-on-arrival and faster e-visa systems. Fuel & Aviation Costs: India cut domestic ATF prices by ₹5/litre to about ₹110/litre and revised export levies from July 1 (petrol up, diesel and ATF down), which could ease airline operating costs. Regional Trade Signals: India’s corn exports are set for a three-year high as competitive pricing draws buyers including Bhutan. Climate Capacity: Bhutan graduated its first PhD batch in Climate Studies from CNR, building local research on climate-resilient farming and food systems.

Bhutan Entrepreneurship Push: Bhutan’s Ministry of Industry, Commerce and Employment launched a National Entrepreneurship Strategy 2026 to turn startups into growth firms, tackling scaling barriers like inactive licences and the dominance of sole proprietorships through regulatory reform, finance access, skills, support services and market access. Urban Housing & Resilience: ADB approved a USD 13m package to strengthen resilient urban infrastructure and expand affordable housing in Thimphu and Phuentsholing. Power Sector Skills: DGPC, BPC and South Korea’s Hyosung signed a tripartite MoU to boost maintenance capacity for gas insulated switchgear, including training and spare parts support. Climate-Safe Planning: A UNDP-backed geotechnical study is guiding safer, disaster-risk-informed development in Phuentsholing as landslides and extreme rainfall strain the gateway city. Heritage to Incomes: Bhutan launched its first four Geographical Indication products—Bumthang Yathra, Bumthang Honey, Dhur-Tandingang Gonthok and Merak-Sakteng Zoetey—to protect authenticity and improve producer earnings. Local Markets: Tsirang farmers in Thakorling Chiwog gained a dedicated, disability-friendly vegetable market facility along the Tsirang-Sarpang highway.

Renewables Policy Push: Bhutan’s Ministry of Finance has started implementing the Renewable Energy Tax Exemption Act 2026, offering time-bound exemptions on customs duty, excise tax and GST for approved renewable projects—aimed at cutting development costs and attracting investment toward the 25GW target. Cost of Living Relief: The GST Amendment Act 2026 has expanded tax exemptions on 31 essential items, including key kitchen staples like cooking oils and butter, with the relief applied retroactively from the bill’s passage. Heritage to Income: Bhutan has launched its first four Geographical Indication products—Bumthang Yathra, Bumthang Honey, Dhur-Tandingang Gonthok (buckwheat flour) and Merak-Sakteng Zoetey (fermented yak cheese)—to protect authenticity and improve producer earnings. Power Sector Skills: DGPC, BPC and South Korea’s Hyosung signed a tripartite MoU to strengthen maintenance of GIS systems, including spare parts supply and training/certification for Bhutanese engineers. Urban Resilience Planning: A new geotechnical study is guiding safer, climate-resilient development in Phuentsholing, supported by UNDP and CDRI, with risk-informed planning for key areas like Pekarshing and Ammochhu. Tourism Investment Drive: Gelephu Mindfulness City unveiled a tourism investment programme and forum pitching a portfolio of attractions and activities to invite Bhutanese and international investors. Agriculture Market Access: Tsirang farmers in Thakorling Chiwog now have a dedicated vegetable market facility along the Tsirang–Sarpang highway, built to improve vendor comfort and boost sales. GI & Energy Momentum: Together, the GI launch, renewable tax incentives and power-sector capacity-building point to a wider push to turn Bhutan’s local strengths into investable, income-generating opportunities.

ADB Funding: The Asian Development Bank approved a USD 13 million package to boost resilient urban infrastructure and expand affordable housing, focusing on Thimphu and Phuentsholing. Climate-Safe Planning: A new geotechnical study is mapping safer construction zones in Phuentsholing as climate risks intensify, with UNDP and CDRI support under the Disaster Resilient Infrastructure Project. Renewables Push: Bhutan’s Ministry of Finance has started implementing the Renewable Energy Tax Exemption Act 2026, offering time-bound tax relief (including customs duty, excise tax and GST on direct inputs) to speed up renewable energy development. Lower Living Costs: GST-registered businesses have been told to stop charging 5% GST on an expanded list of essentials, including key kitchen staples and disability-related welfare items, with relief applied retroactively. Education & Skills: The Royal Institute of Management has asked for release of Nu 43.3 million to strengthen faculty capacity and expand professional education, while the Royal University of Bhutan plans to reallocate funds to accelerate international programme accreditation. Higher Education Finance: The RUB also flagged a GST-related ambiguity on government infrastructure projects that it says has contributed to budget overruns. Local Governance: Women make up nearly 40% of candidates for Thromde Tshogpa and Thrompon roles in Thimphu and Phuentshogling, but only one woman is running for Thrompon, leaving Phuentshogling’s mayoral race male-only. Gelephu Growth: Gelephu Mindfulness City (GMC) unveiled a tourism investment programme with 20 attractions and 20 activities, inviting private investors to shape a high-value, sustainable destination. Flood Disruption: Heavy rain hit Phuentshogling, displacing over 70 families and damaging homes and infrastructure, with emergency evacuation and machinery deployed. Economic Stimulus: India has released more than 83% of its Nu 15 billion commitment to Bhutan’s Economic Stimulus Programme, with the latest fifth tranche of Nu 2.5 billion bringing total disbursement to Nu 12.5 billion. RIM International Reach: RIM’s request also targets marketing courses to international students and expanding management education programmes.

Gelephu Mindfulness City (GMC) Tourism Push: GMC has unveiled a multi-million-dollar tourism investment drive, pitching a portfolio of 20 attractions and 20 activities and inviting private investors to shape a globally recognised, high-value sustainable destination. Renewable Energy Tax Incentives: Bhutan’s Ministry of Finance has started implementing the Renewable Energy Tax Exemption Act 2026, offering time-bound exemptions on customs duty, excise tax, GST on direct inputs, and POTT for approved renewable projects—aimed at accelerating the push toward 25 GW capacity. Cost-of-Living GST Relief: After the GST Amendment Act 2026, GST-registered businesses must stop charging the 5% GST on an expanded list of essential items, including key kitchen staples and disability-related welfare items, with relief applied retroactively. Economic Stimulus Disbursement: India has released over 83% of its Nu 15bn commitment to Bhutan’s Economic Stimulus Programme, with the latest fifth tranche of Nu 2.5bn bringing total disbursement to Nu 12.5bn, including support for fuel price smoothing and investments in agriculture, education and digital transformation. Flood Disruption in Phuentshogling: Heavy rain caused flooding and road blockages in Phuentshogling, displacing 70+ families; shelters and schools were used for evacuation, and mitigation machinery was deployed. Insurance Licensing Pause: Bhutan’s RMA has suspended new insurance licence applications for six months as it reviews the licensing framework following a Financial Services Act amendment that will allow insurers to offer both life and general insurance under one company.

Bhutan Energy & Investment: Bhutan’s energy push is in focus as the government backs private investment to reach 10,000MW of solar by 2030, while also accelerating onshore and offshore gas exploration to ease the country’s long-running power and gas shortages. Insurance Regulation: The RMA has paused new insurance licensing for six months, after a Financial Services Act amendment that will allow insurers to offer both life and general coverage under one company—drawing interest from about seven potential entrants. Digital & Public Finance (Regional spillover): The World Bank approved $250m for Bangladesh’s public-institution upgrades, including digital systems for revenue, procurement, and audit—an important reminder for Bhutan as it deepens governance and data-driven policy. Flood Disruption at the Border: Heavy rain has hit Bhutan and India’s gateway towns, with Phuentsholing among the worst affected; floods and washed-out links disrupted movement and even swept LPG cylinders into Jaigaon. Local Economy & Governance: The ECB released the final roll for 2026 thromde elections with 10,309 voters registered (Thimphu: 9,159; Phuentshogling: 1,150), plus verified postal voting applications.

Bhutan Insurance Regulation: Bhutan’s RMA has paused new insurance company licensing for six months after a Financial Services Act amendment that will let insurers offer both life and general coverage under one company; interest has already come from about seven would-be entrants, but the regulator says it must first review the licensing framework and market conditions. Bhutan Local Economy & Governance: The ECB has released the final electoral roll for the 2026 thromde elections, with 10,309 voters registered across Thimphu Thromde (9,159) and Phuentshogling Thromde (1,150), plus 95 approved postal ballot voters—an important step for local leadership and business-facing municipal decisions. Regional Trade & Connectivity Disruption: Incessant rain has triggered floods and landslides across North Bengal and neighbouring Bhutan, including Phuentsholing, where waterlogging and washed-out links disrupted cross-border movement and even swept LPG cylinders into Jaigaon. Energy Policy Signals: Bhutan’s wider region is pushing energy security—one parliament report highlights renewable incentives (solar equipment and battery duty exemptions, tax holidays to 2031) alongside accelerated gas exploration, a reminder of how power reliability and fuel supply shape costs for households and firms. Agrifood Investment Theme: Bhutan-linked agrifood finance is in focus too, with a regional push for structured funding and organic/agri value chains—relevant for Bhutan’s rural enterprises and export-ready supply chains.

Bhutan–India Economic Stimulus: India handed Bhutan the fifth tranche of INR 250 crore under the Economic Stimulus Programme, bringing disbursed support to INR 1,250 crore out of the committed INR 1,500 crore, with officials citing gains for farmers, students, youth, SMEs, startups, and tourism, plus a related INR 250 crore fuel-price smoothening framework. Bhutan Digital Economy & Consumer Costs: Bhutan’s GST Amendment Act 2026 expands GST exemptions on essentials, including cooking oils, multiple rice categories, sanitary napkins, salt, and wheelchairs—retroactive to 18 May—cutting costs for households and businesses. Bhutan Elections: The Election Commission of Bhutan released the final roll for 2026 thromde elections, with 10,309 voters registered (9,159 in Thimphu Thromde; 1,150 in Phuentshogling), and postal voting verified for 95 voters. Regional Finance Shock (Bangladesh): The World Bank approved $1.1 billion emergency financing for Bangladesh to protect food security and livelihoods amid fertilizer and fuel price volatility, including $300 million for fertilizer imports for Aman and Boro seasons and $713 million for rapid emergency response. Transport & Cooperatives (India): Union Cooperation Minister Amit Shah launched cooperative ride-hailing platform Bharat Taxi in Gujarat, targeting fairer driver economics and challenging private app-based cab firms over “unfair competition.” Flood Disruption (Assam–Bhutan link): Aie River floodwaters swept away a bamboo bridge in Chirang, disrupting access for students and residents and prompting boat services while authorities discuss exam arrangements.

World Bank Emergency Financing: The World Bank approved $1.1 billion for Bangladesh to protect food security and livelihoods amid global fertilizer and fuel price volatility, including $300m for emergency fertilizer imports for the Aman and Boro rice seasons and $713m for rapid cash transfers, livelihood support, and fuel/energy for essential services. Bhutan-India Economic Stimulus: India handed Bhutan the fifth tranche of INR 250 crore under the Economic Stimulus Programme, bringing total disbursement to INR 1,250 crore out of INR 1,500 crore, with funds supporting farmers, youth, SMEs, startups, and tourism. Bhutan GST Relief: Bhutan’s GST Amendment Act 2026 expands exemptions on everyday essentials, including cooking oils, rice categories, sanitary napkins, salt, and automatic wheelchairs, with retroactive effect from 18 May. Digital Transition & Social Impact: Viral school bullying videos in Thimphu have sparked debate on youth conduct and digital responsibility, prompting police and education probes and student suspensions. Regional Business/Transport: India’s Amit Shah launched cooperative ride-hailing Bharat Taxi in Gujarat, accusing private cab aggregators of unfair competition and promising expansion to 500+ cities. Flood Disruption (Neighboring Region): Assam’s Aie River flood swept away a bamboo bridge in Chirang, disrupting access for students and residents and raising concerns over ferry-bridge management.

Economic Stimulus: India handed Bhutan the 5th tranche of its Economic Stimulus Programme—INR 250 crore (Nu 2.5 billion)—bringing total disbursed support to INR 1,250 crore out of INR 1,500 crore, with the funds credited to post-Covid recovery and jobs across farmers, students and youth, SMEs, startups, creative industries, and hospitality/tourism. Fuel Cost Relief: Alongside the tranche, India also approved additional support for Bhutan’s National Fuel Price Smoothening Framework to cushion the impact of rising fuel prices. Tax Relief for Daily Life: Bhutan’s GST Amendment Act 2026 expands GST exemptions on essentials, including cooking oils, multiple rice categories, sanitary napkins, salt, and automatic wheelchairs—retroactive to 18 May. Digital Transition Watch: Viral school-bullying videos in Thimphu have sparked debate over youth behaviour and digital responsibility, with police and education authorities investigating and students suspended. Health & Community: Cancer survivors in Thimphu highlighted how family and community support helped them recover, as HRH Ashi Kesang Wangmo Wangchuck attended Cancer Survivors Month events.

India–Bhutan Economic Stimulus: India has handed Bhutan the fifth tranche of its Economic Stimulus Programme—₹250 crore (Nu 2.5bn)—bringing total support to ₹1,250 crore out of a ₹1,500 crore commitment, with the funds tied to post-pandemic recovery and jobs across farmers, youth, SMEs, startups, creative industries, and tourism. GST Relief for Daily Life: Bhutan’s GST Amendment Act 2026 is now in effect for a wider set of essentials, with GST removed on an expanded list including multiple cooking oils, rice categories, sanitary napkins, salt, and motorized wheelchairs—retroactive to 18 May. Digital Push: Bhutan’s digital transformation is gaining traction, with the digital economy flagged as a growing source of employment and income, alongside progress on the National Digital Identity system and plans to expand the digital economy in 2026–27. Capital Markets: Bhutan’s stock market is showing “gradual maturation” after a strong early-year surge, with trading and turnover stabilising across March–May as more investors use RSEB’s mobile platform. Digital Transition Stress Test: Viral school bullying videos have sparked debate in Bhutan over youth behaviour and digital responsibility, prompting police and school action.

India–Bhutan Economic Stimulus: India has released the fifth tranche of its Economic Stimulus Programme to Bhutan—₹250 crore (Nu 2.5 billion)—bringing total support to ₹1,250 crore, with the embassy handing over the cheque in Thimphu and Bhutan’s foreign minister citing benefits for farmers, youth, SMEs, startups, creative industries, and hospitality/tourism. Digital Bhutan & GST: Bhutan’s digital transformation push is gaining traction, with the State of the Nation report highlighting the National Digital Identity system and growth in digital-economy jobs and income; meanwhile, the GST Amendment Bill 2026 expands GST exemptions for essential goods from 9 to 31 items to ease cost-of-living pressures. Social Media & Schools: Viral bullying videos from a Thimphu school have sparked debate on youth behaviour and digital responsibility, with students suspended and footage removed after police and education probes. Markets Watch: Bhutan’s capital market is showing gradual consolidation, with RSEB data pointing to more stable trading after a strong March surge.