AGP Executive Report

Regulatory Bottlenecks at Borders: A new BCCI review flags 54 regulatory and operational hurdles choking trade and investment in Phuentsholing and Samtse, from licensing delays and GST frictions to skilled-worker shortages and weak trade infrastructure. FDI Push & Jobs Plan: Bhutan’s State of the Nation Report targets Nu. 3.5bn FDI, digital expansion, and employment for 5,500 youth under 2026–27 priority programmes, with focus on clean tech, creative industries, IT-enabled services, renewables, wellness and agro-processing. Public Finance Turnaround: The government says it flipped a projected Nu 56bn deficit to a Nu 20bn surplus within two years of the 13th FYP, alongside a 30% GDP rise to Nu 364bn. Insurance Licensing Pause: The RMA imposed a six-month moratorium on new insurance company licensing while reforms and legislative amendments are reviewed. Tourism Investment in Gelephu: The GMC tourism forum opened an EOI process for Bhutanese entrepreneurs, with investment ideas spanning adventure parks, capsule hotels and other attractions. Corporate Signals: AGM season shows mixed dividend payouts for FY2025 across RSEB-listed firms, with BTCL leading at 25%. Health & Social Support: The Third Child Plus Programme has identified 5,458 eligible mothers for Nu 10,000 monthly allowances, while 467 schools get expanded feeding and nutrition support for 2026–27. Business Skills: Bhutan held its first live sound essentials training to build local technical capacity for the growing events and creative sector.

FDI & jobs push: Bhutan’s 2026–27 priorities target Nu. 3.5 billion in foreign direct investment, digital expansion, and employment for 5,500 youth, with new startups and industries planned beyond Thimphu. Public health enforcement: BFDA tightens the public smoking ban, with Nu 500 fines and clear rules for shops and commercial centres to stay smoke-free. Insurance market pause: The RMA imposes a six-month moratorium on new insurance company licensing while regulatory reforms are reviewed. Gelephu investor framework: Parliament adopts a Double Taxation Avoidance Agreement with Singapore, aimed at boosting confidence for GMC investors. GMC tourism pipeline: A Gelephu Mindfulness City forum pitches tourism investment opportunities for Bhutanese entrepreneurs, with an EOI process and projects ranging from USD 100,000 to 40M+. Business licensing reform: The National Entrepreneurship Strategy 2026 targets faster licensing—down to three working days—plus better access to finance and market support. Connectivity for the region: Air India announces direct Guwahati–Dubai and Guwahati–Abu Dhabi flights from August 4, strengthening regional travel links that also connect to Bhutan. Corporate dividends: Listed companies show a mixed FY2025 dividend picture, with some rewarding shareholders while others retain earnings amid cautious conditions.

FDI & jobs push: Bhutan’s 2026–27 priorities target Nu. 3.5bn in FDI, digital expansion, agro-processing and clean/creative industries, with plans to back startups and create 5,500 youth jobs. Gelephu Mindfulness City pipeline: The GMC Tourism Investment Opportunity Forum opened doors for Bhutanese SMEs and entrepreneurs, with an Expression of Interest process and a wide menu of tourism attractions/activities. Tax clarity for investors: Parliament adopted a Double Taxation Avoidance Agreement with Singapore, aimed at boosting confidence for GMC investors. Digital identity: Bhutan joined the 50-in-5 campaign to strengthen privacy-preserving digital ID and trusted digital foundations. Insurance sector caution: The RMA imposed a six-month moratorium on new insurance company licensing while regulatory reforms are reviewed. Public policy with business impact: BFDA tightened the public smoking ban with Nu 500 fines, affecting commercial premises. Household support rollout: OCASC is verifying 5,458 eligible mothers for the Third Child Plus allowance, with first payments expected by month-end. Corporate signals: Listed companies’ FY2025 dividend payouts were mixed, with BTCL leading at 25%.

Higher Education Funding: A parliamentary committee called India’s higher education allocation “underwhelming,” urging spending to reach 6% of GDP under NEP 2020 and warning of weak facilities, teacher shortages, and stalled enrolment growth. Entrepreneurship Push: Bhutan’s National Entrepreneurship Strategy 2026 targets faster business licensing in three working days, better access to finance, and wider market support to help startups scale. Gelephu Mindfulness City Ideas: Pelsups pitched 30 solutions for GMC, including bamboo supply plans to cut imports and app-based emergency alerts to improve safety. Phuentshogling Tourism Upgrade: A contract will develop tourism branding and digital media tools for the border town, including a dedicated website to boost visitor experience and local commerce. Trade Disruption at Amochhu: Recurring floods in Phuentshogling are stranding exporters’ vehicles and delaying labour permits, with rules like the 24-hour driver exit requirement adding pressure. Secured Lending Systems: Bhutan’s National Registration Agency for Secured Transactions and State Compensation met RMA officials to strengthen secured transactions registries that support credit access. Hydropower Outlook: DGPC highlighted its role as Bhutan’s sole hydropower producer, powering domestic demand and driving export revenues, with capacity plans to meet rising needs. Digital Talent Pipeline: Youth Tech-Novation Hackathon 2026 showcased digital solutions and training for young innovators across youth centres and colleges. Crypto Market Watch: Crypto prices slipped again, with Bitcoin hovering below key levels as traders watch support zones.

Entrepreneurship Push: Bhutan’s National Entrepreneurship Strategy 2026 aims to cut business licensing to within three working days, boost access to finance (including angel investors and venture capital), and strengthen business support centres, with entrepreneurship programmes planned for 90% of schools and colleges. Gelephu Mindfulness City Ideas: Pelsups from the Pelsung programme pitched 30 solutions for GMC, including turning agricultural and food waste into products and building bamboo nurseries to reduce imports and create rural income, plus app-based emergency alert concepts. Phuentsholing Tourism Branding: The Phuentshogling Thromde Enhancement Programme has started a contract to develop tourism branding and digital media tools, including a dedicated website, to position the border town as a cleaner, safer gateway for visitors and trade. Secured Lending Infrastructure: Bhutan’s National Registration Agency for Secured Transactions and State Compensation met senior Royal Monetary Authority officials to exchange experience on secured transactions and collateral registry systems, supported by the IFC. Digital Talent Drive: A Youth Tech-Novation Hackathon 2026 showcased digital solutions from 21 teams, engaging 900+ young people across youth centres, schools and tertiary institutions. Crypto Market Watch: Crypto prices slipped again, with Bitcoin trading below key levels as the market tests its longer-term average.

Waste & Circular Economy: Recykal raised $23m in a bridge round (primary $17.6m, secondary $5.4m) to scale its deposit return system and global waste-management solutions, including tech upgrades and circular-economy investments. Tourism & Border Trade: Phuentsholing is set to get tourism branding and digital promotion tools under the Thromde Enhancement Programme, aiming to position the border town as a cleaner, more experiential gateway. Hydropower & Energy Security: DGPC was highlighted as Bhutan’s sole hydropower producer meeting domestic demand and contributing major government revenue and foreign exchange, with plans to expand installed capacity to meet rising needs. Trade Facilitation Pressure: Recurring Amochhu floods are disrupting export operations and labour permits, with exporters and Indian drivers facing delays under the 24-hour exit rule. Digital Skills for Youth: A Youth Tech-Novation Hackathon showcased digital solutions from 21 teams, training 900+ young people across youth centres and colleges to support Bhutan’s digital economy. Culture & Heritage Funding: Religious organisations are urging higher gewog grants for temple and heritage preservation, saying current allocations are delaying key renovations and activities. Health Spending Efficiency: Bhutan’s health ministry and the World Bank discussed ways to reduce wasteful health spending as expenditure rose sharply from 2021 to 2025. Natural Wool Dye Revival: Training for women weavers in Chhumey aims to revive natural wool dyeing for yathra weaving as sheep-rearing declines. Secured Transactions & Credit: Bhutan’s RMA met Bhutan’s secured transactions registry agency to exchange experience on improving access to credit and legal safety for collateral-backed lending. Crypto/Fintech Ecosystem: BNB Chain’s EASY Residency Season 4 opened applications for Web3 builders to work from Gelephu Mindfulness City with up to $500k funding per team.

Industrial Expansion: SY Panel inaugurated two new plants in Chitwan—SY UPVC and SY Cosmetic—backed by about Nu 60 crore, with six-month construction timelines and a push for jobs, skills, and exports. Energy & Finance: A first-of-its-kind move in Bhutan—securitisation of hydropower receivables—puts DGPC’s central role in power supply and government revenue in sharper focus. Border Tourism Push: Phuentsholing is set to be repositioned as a cleaner, safer tourism and trade gateway, with a contract for destination branding and digital media tools. Regulatory Pressure on Trade: Local business groups are calling for a review of the 24-hour SDF waiver zone in Phuentsholing, saying strict rules are turning the town into a transit corridor. Digital Readiness for Hotels: A national digital readiness programme found many Bhutanese hotels lack control of Google listings and have outdated websites, limiting online bookings. Public Sector Costs: Pay revision is expected soon, but only after a required process—starting with a pay commission—amid rising inflation pressures. Culture & Heritage Funding: Religious organisations want higher gewog grants for heritage preservation, saying current allocations delay temple and monastery maintenance. Skills for the Digital Economy: Youth Tech-Novation Hackathon 2026 showcased digital solutions, training 900+ young people across youth centres and colleges.

Secured Lending & Legal Safety: Bhutan’s National Registration Agency for Secured Transactions and State Compensation met Royal Monetary Authority officials to exchange experience on the secured transactions registry system, aimed at boosting access to credit and protecting transaction legality. Digital Payments Inspiration: South Africa is looking at India’s UPI model to accelerate its cashless push, with the South African Reserve Bank governor citing UPI as low-cost and accessible. Tourism & Port Logistics: Kolkata’s Syama Prasad Mookerjee Port mapped a tourism push including an international-standard river cruise terminal and museum, while Adani explores West Bengal opportunities across ports, logistics and data centres. Health Spending Efficiency: Bhutan’s health ministry and the World Bank discussed ways to cut wasteful health spending as Bhutan’s health expenditure rose sharply from 2021-2025. Craft Revival for Jobs: Training in natural wool dyeing is being rolled out in Bumthang to revive Yathra weaving as sheep-rearing declines. Flood Disruptions: Recurring Amochhu flooding in Phuentshogling is delaying boulder exports and labour permits, with vehicles stranded and permit rules complicating recovery. Digital Skills for Youth: A Tech-Novation Hackathon 2026 showcased digital solutions by 21 teams, engaging 900+ youth through youth centres and tertiary institutions. Gewog Heritage Funding: Religious organisations want gewog grants for heritage preservation raised, saying current allocations delay temple and monastery maintenance. Hotel Online Presence: A digital readiness programme found many Bhutan hotels struggle with Google listings, outdated websites and weak online responsiveness, limiting bookings. Pay Revision Watch: Government signals a new civil service pay revision process after inflation pressures, with a pay commission to assess feasibility. Economic Transformation Plan: The State of the Nation report outlines eight priority programmes for 2026-27, including FDI mobilisation, startup growth, new industries beyond Thimphu, and tourism package expansion. Web3 Accelerator in Bhutan: BNB Chain’s EASY Residency Season 4 is accepting applications for a 10-week programme with up to $500K funding, with builders living in Gelephu Mindfulness City.

Climate & Risk: ICIMOD warns that even with a weaker monsoon forecast for the Hindu Kush Himalaya (including Bhutan), short bursts of intense rain, landslides and flash floods remain a serious threat, alongside rising water stress and drought risk. Trade Disruption: Recurring Amochhu flooding in Phuentshogling is repeatedly stranding boulder exporters and delaying labour permit access, with Indian drivers facing a 24-hour exit rule that becomes unworkable during road cut-offs. Health Spending Efficiency: Bhutan’s health ministry and the World Bank discussed ways to curb wasteful health expenditure as spending rose sharply from 2021 to 2025, focusing on better purchasing and resource allocation. Digital Readiness for Tourism: A national digital readiness programme finds many Bhutan hotels—especially 3-star—lack control over Google and social profiles and run outdated websites, hurting visibility and bookings. Local Economy & Skills: A Youth Tech-Novation Hackathon showcased digital solutions by 21 teams, while training aims to revive natural wool dyeing for Yathra weaving in Bumthang. Culture Funding: Religious organisations are urging higher gewog grants for heritage preservation, saying current allocations delay temple and monastery maintenance. Energy/Policy Context: Bhutan’s pay revision is expected soon, with the government citing an economic assessment process amid inflation pressures.

Bhutan Digital Economy: A new “digital readiness” push found many three-star hotels in Bhutan can’t fully manage Google listings, social media and online travel profiles, hurting visibility and bookings; officials say outdated websites and limited access to accounts (often created by former staff or agencies) are common, and the programme is meant to fix these gaps. Public Finance & Wages: Bhutan’s pay revision is expected soon, but only after a pay commission assesses economic conditions; the government points to inflation pressures and notes the process must follow legal steps before Cabinet and Parliament consider any raise. Private Sector Credit Costs: The government will review Bhutan’s lending rate framework with the Royal Monetary Authority and banks after concerns that high borrowing costs are slowing business growth and investment. Economic Transformation Plan: The PM’s 2026-27 priorities include eight national programmes, aiming to mobilise Nu 3.5bn in FDI, create startups and new industries beyond Thimphu/Chhukha, and expand tourism packages with targets like 300,000 visitors. Climate & Risk: Regional climate outlooks warn that even with below-normal monsoon rainfall in parts of the HKH (including Bhutan), short bursts of intense rain can still trigger flash floods and landslides, alongside drought and water-stress risks.

Parliament & Public Finance: Bhutan’s pay revision is expected soon, but only after an economic assessment and the required pay commission process. Economic Transformation: The PM’s 2026-27 priorities include eight national programmes, with targets for startups, early-stage business growth, new industries outside Thimphu/Chhukha, and tourism packages (including a Red Panda flagship aiming at 300,000 visitors). Cost of Credit: Finance Minister says Bhutan will review the lending rate framework with the RMA and banks to see if borrowing costs can be reduced without hurting financial stability. Oversight & Procurement: The PAC flags a systemic engineering and procurement capacity gap behind recurring public works irregularities, pointing to unresolved audit observations and technical staffing shortages. Tourism & Digital Readiness: A digital readiness programme finds many Bhutan hotels—especially smaller ones—lack control over Google/social/OTA listings and run outdated websites, limiting online bookings. Climate & Risk: WMO highlights Asia’s worsening extremes; for Bhutan and the HKH, experts warn that even a weaker monsoon can still bring dangerous flash-flood and landslide conditions.

Bhutan Economy & Policy: Bhutan’s 13th Five-Year Plan is showing momentum, with GDP up 30% since July 2024 and hydropower capacity rising to 3,576 MW, while the Prime Minister flags youth outmigration and fuel-price shocks as the biggest long-term risks. Public Finance & Business Climate: The government has directed the RMA and banks to review Bhutan’s lending-rate framework to tackle high borrowing costs, and the PAC warned of systemic engineering and procurement capacity gaps behind recurring public works irregularities. Tourism & Trade: Bhutan is pushing tourism growth through the Bhutan International Travel Mart (BITM) and is also deepening agri-food ties, including a first Mini Bhutan Market opening in Singapore. Demographics & Social Policy: The Third Child Plus Program offers Nu. 10,000 per month for third and subsequent children under age three, targeting a declining birth rate and ageing population. Water & Resilience: A safe-water filtration expansion is already benefiting 75,000+ children, while regional climate reporting highlights worsening heat and disaster risks across the HKH.

Bhutan Economy & Policy: Bhutan’s economy grew about 30% since the start of the 13th FYP, with GDP now at Nu 364bn, driven by hydropower, agriculture, tourism and manufacturing; the PM also flagged youth outmigration and fuel price vulnerability as key risks. Hydropower & Infrastructure: The State of the Nation update highlighted hydropower expansion (capacity rising from 2452MW to 3576MW) and ongoing work on major projects, alongside plans for dry ports and connectivity upgrades. Business & Finance: The government will review Bhutan’s lending rate framework with the RMA and banks to tackle high borrowing costs for SMEs. Public Procurement Oversight: Parliament’s PAC warned of a engineering and procurement capacity crisis behind recurring public works irregularities, pointing to unresolved audit observations. Tourism & Trade: Bhutan is pushing tourism through the Bhutan International Travel Mart (BITM) 2026, while also deepening agri-food trade with Singapore via a first Mini Bhutan Market. Digital Identity: Bhutan joined the 50-in-5 self-sovereign ID push to strengthen trusted digital foundations for services and growth. Climate & Risk: The WMO launched its State of the Climate in Asia 2025 report in Paro, underscoring faster warming and water-security threats that matter for Bhutan’s economy and planning.

Lending Rates Watch: Bhutan’s Finance Ministry has directed the RMA and banks to review the lending rate framework, including the Minimum Lending Rate and expected credit loss rules, as businesses and households push back against high borrowing costs. Public Works Capacity Crisis: Parliament’s PAC says recurring irregularities in infrastructure projects stem from a systemic engineering and procurement capacity gap, including shortages of experienced technical staff and weak supervision. Tax System Accountability: MPs flagged waste and losses tied to BITS 1.0, directing an Action Taken Report and calling for stronger procurement controls and accountability. Tourism Deal-Making: Bhutan wrapped up BITM 2026 with 200+ international buyers from 15 countries, signaling a shift toward structured partnerships under the “High Value, Low Volume” model. Agri-Food Trade Push: Bhutan and Singapore deepened ties as the first Mini Bhutan Market opened in Singapore, aiming to expand agri-food business links. Digital Identity Move: Bhutan joined the 50-in-5 campaign to strengthen its privacy-preserving self-sovereign digital ID ecosystem. Demographics Support: The Third Child Plus Program launched with Nu 10,000 monthly support for third and subsequent children under age three. Water Security Expansion: A safe water filtration programme is already benefiting 75,000+ children and is scaling toward universal access by 2030.

Lending Rates Review: Bhutan’s MoF has directed the RMA and banks to review the lending rate framework, including the Minimum Lending Rate and expected credit loss rules, as MPs push for cheaper credit to ease pressure on households and help SMEs grow. Public Works Accountability: The PAC flagged a “systemic failure” in engineering and procurement capacity behind recurring irregularities in infrastructure spending, citing unresolved audit observations and a shortage of experienced technical staff. Digital Identity for Growth: Bhutan joined the 50-in-5 campaign to strengthen its self-sovereign digital ID and trusted digital public infrastructure, aiming to improve service delivery and unlock new economic opportunities. Tourism Trade Push: Bhutan and Singapore deepened agri-food ties and marked a first Bhutan market debut in Singapore, while Bhutan also concluded its first International Travel Mart (BITM 2026) with 200+ global buyers from 15 countries. Agrifood & Storage Plans: Government moves include expanding safe water access nationwide and plans to set up 2,000 mini cold storages to help farmers store produce and secure fairer prices. Legal & Governance Reform: Parliament advanced insolvency reform plans for distressed businesses and tightened enforcement on long-pending audit cases, including mandatory court referrals for serious matters.

Safe Water Initiative: Bhutan’s school and institution filtration programme has expanded to reach over 75,000 children, covering about 85% of schools and aiming for universal clean water access by 2030. Tourism Partnerships: BITM 2026 in Thimphu drew 200+ international buyers from around 15 countries, signalling a shift toward structured global partnerships under Bhutan’s “high value, low volume” model. Family Policy & Demographics: Government launched the Third Child Plus Program, offering Nu. 10,000 monthly for third and subsequent children up to age three, as fertility and births continue to fall. Public Finance Accountability: Parliament discussed IFMIS-linked steps to curb misuse of Closed Work Accounts, while new enforcement will push serious unresolved audit cases into mandatory court referrals. Legal Aid Reform: The National Council deferred a Jabmi Amendment after debate on replacing “indigent persons” with “accused” to broaden access to pro bono legal services. Innovation in Services: RCSC’s first Civil Service Innovation Day showcased citizen-focused solutions, from accessibility tools to better resource management. Green Economy Products: Bhutan launched 11 ABS-certified biodiversity products, including moringa and other wellness items, to scale the green economy. Agrifood Storage Plan: Agriculture Minister said Bhutan is setting up 2,000 mini cold storages to reduce post-harvest losses and improve farmers’ prices. Digital Identity Push: Bhutan joined the 50-in-5 campaign as it advances privacy-preserving self-sovereign digital ID and trusted digital public infrastructure. Tourism & Media Collaboration: Media professionals, influencers, and CSOs met to boost visibility for grassroots stories in Bhutan’s digital age.