AGP Executive Report

Bhutan-India Trade: Assam flagged off its first-ever commercial dairy export to Bhutan—5,627 litres of Purabi Premium ice cream—opening a new market for Assam’s dairy co-ops in Thimphu, Paro and Phuentshogling. Climate Finance & Carbon Markets: Bhutan’s Department of Environment and Climate Change signed an MoU with the Global Carbon Council to build readiness for international carbon markets, covering governance, methodologies, project development and digital registry support. Environment & Waste Management: A plastic recycling project in Phuentshogling remains idle months after machines were installed, pending approval from Druk Holding and Investments—delaying production of items like paver blocks and pipes. Investment Pipeline: MoICE invited all 20 dzongkhags to pitch investment-ready projects for the 2nd Invest Bhutan Summit (Jan 11–12, 2027), aiming to attract quality FDI beyond urban centres. Youth Jobs: Bhutan’s youth unemployment stays high despite an overall drop, with 15–24-year-olds facing much tougher entry into the workforce. Labour Mobility: Bhutan’s first placements under Singapore’s NTS Work Permit scheme sent eight workers to regulated service-sector roles, creating a new overseas pathway.

Hydropower Push: Public consultation backs Bhutan’s 180MW Bunakha Hydropower Project, with storage aimed at stronger winter generation and clearer resettlement/impact plans. Carbon Markets: Bhutan’s DECC signs an MoU with the Global Carbon Council to build readiness for high-integrity Article 6 carbon markets, including registry and issuance systems. Trade Pressure: Q1 2026 trade data shows imports of Nu 34.86bn versus exports of Nu 14.47bn, widening a Nu 20.4bn deficit and highlighting import dependence in food and machinery. Jobs & Skills: Youth unemployment stays high—overall unemployment falls to 2.7%, but ages 15–24 remain at 13.4%, driven by “recently completed studies” and skills/experience gaps. Industrial Parks: Industrial parks created 5,438 jobs, yet occupancy and operations lag in newer estates, leaving allocated plots idle and delaying investment take-off. Digital Connectivity: Bhutan’s Third International Internet Gateway is at a final stage, awaiting Indian regulatory clearances for cross-border fibre PoI work. Overseas Work Pathway: First results under Singapore’s NTS Work Permit place 8 Bhutanese workers in services, opening a regulated new route for jobseekers. Tourism & Business Pipeline: Bhutan plans the inaugural Asia Visionary Summit (6–8 Nov 2026) to convene leaders around innovation, sustainability and Gelephu Mindfulness City.

Bhutan’s Industrial Push: Bhutan’s industrial parks generated 5,438 jobs in FY 2025–26, but occupancy and operations still lag in newer estates, with many allotted plots sitting idle—highlighting the need for faster implementation and investor confidence. Digital Connectivity: GovTech says Bhutan’s Third International Internet Gateway is in its final preparatory stage, awaiting Indian regulatory clearances for a joint border survey to complete the cross-border fibre link. Trade Pressure: Q1 2026 trade data shows Bhutan imported Nu 34.86bn and exported Nu 14.47bn, leaving a Nu 20.4bn deficit, with imports dominated by machinery, fuels, and even food items Bhutan could potentially produce. Jobs Abroad: Bhutanese workers have secured their first placements in Singapore under the Non-Traditional Sources work permit scheme, with eight jobs in the services sector. Regional Leadership & Climate Finance: Bhutan will host the inaugural Asia Visionary Summit (6–8 Nov 2026) tied to Gelephu Mindfulness City, while the Global Carbon Council signed an MoU with Bhutan’s DECC to strengthen readiness for international carbon markets. Infrastructure Spending: Bhutan plans Nu 5.6bn in external borrowings for FY 2026–27, including project-tied funding for jobs, climate resilience, renewable power readiness, and housing. Local Business Friction: Thimphu parking complaints point to overcharging and misuse of tickets, adding pressure to everyday costs for commuters.

Regional Diplomacy: Maldives President Mohamed Muizzu urged SAARC members to return to dialogue to break the current deadlock, offering to mediate for regional peace and cooperation. Bhutan Trade Watch: Bhutan’s Q1 2026 trade gap widened as imports hit Nu 34.86 billion versus exports of Nu 14.47 billion, leaving a deficit of about Nu 20.4 billion, with machinery, fuels and vehicles among the biggest import categories. Digital Connectivity: Bhutan’s Third International Internet Gateway is in its final preparatory stage, but implementation hinges on Indian regulatory clearances for a joint border survey needed to complete the cross-border fibre link. Education & Skills: The Royal University of Bhutan (RUB) plans tighter admission rules from next year, including financial penalties, to curb students accepting seats then withdrawing and leaving university capacity unused. Tourism & Local Economy: A Phuentshogling initiative is training hotel and restaurant chefs to serve more authentic Bhutanese vegetarian dishes, compiling recipes into a new cookbook to boost culinary tourism and support local farmers. Cross-Border Business: Nepal announced the start of rail cargo from Kolkata to Biratnagar to cut transit costs and improve reliability for goods moving through India.

Higher Education & Jobs: Royal University of Bhutan is set to tighten admission rules from next year after students accepted seats and later withdrew, leaving unused places and wasted government resources—RUB says it can admit only about 23% of Class 12 graduates annually. Tourism & Hospitality: Phuentshogling is rolling out a push for authentic Bhutanese vegetarian cuisine, with 15 local chefs trained and a new cookbook to help hotels and restaurants serve traditional dishes beyond the usual staples. Skills & Employment: Bhutan’s part-time employment system is starting to convert registrations into real work—over 1,100 job seekers and 40+ employers have signed up, with students already gaining paid experience. Agribusiness: Monggar farmers are shifting toward large-scale fruit cultivation as Bhutan Agro Industries Limited becomes a guaranteed buyer, paying per-kg rates (including a premium for organic certified produce) and reducing the risk of unsold harvests. Regional Trade & Connectivity: Nepal has started a Kolkata–Biratnagar rail cargo service to cut transit costs and delays for goods moving via India, aiming to strengthen competitiveness for Nepali industrialists. GNH & Development Metrics: A Thimphu workshop explored building an international alliance to place well-being alongside GDP, positioning Bhutan’s GNH approach as a potential global reference point.

Higher-Ed Policy: Royal University of Bhutan (RUB) will tighten admission rules after a pattern of students accepting seats and then withdrawing, leaving unused places and wasted government resources; the revised approach includes financial penalties and targets repeat withdrawals. Crowdfunding Oversight: RSEBL’s earlier equity crowdfunding platform is still unable to contact a fruit-and-veg processing startup, Himalayan Food, raising fresh questions on regulator follow-through and investor protection. Digital Payments: India’s UPI keeps expanding abroad, with new cross-border links including Bhutan, while a proposed “UPI Checkout” feature faces pushback from major payments firms over competition concerns. Tourism & Hospitality: Phuentshogling is promoting authentic Bhutanese vegetarian cuisine beyond the usual staples, training chefs and compiling recipes into a new cookbook to boost local tourism-linked jobs. Agribusiness: In Monggar, farmers are shifting toward fruit cultivation as Bhutan Agro Industries Limited offers a guaranteed buyer for pineapple, mango and passion fruit, including incentives for organic certified produce. International Trade Logistics: Nepal says a new rail cargo service from Kolkata to Biratnagar has started, aiming to cut transit costs and delays for Nepali importers.

RUB Tightens Admissions: The Royal University of Bhutan will introduce stricter rules and financial penalties to curb students accepting places then withdrawing, protecting seat availability and reducing wasted government education resources. Crowdfunding Red Flag: RSEBL says it has been unable to contact a previously funded equity crowdfunding company, Himalayan Food, with regulators reportedly at odds over what happens next. Skills-to-Jobs Push: Bhutan’s part-time employment system is starting to convert registrations into real work, with students gaining internships and employers testing a new pathway into experience. Youth & Jobs Pressure: A fresh look at Bhutan’s youth exodus frames Gelephu Mindfulness City as a bid to create opportunity while keeping the country’s GNH values at the centre. Local Food Tourism: Phuentshogling is promoting authentic Bhutanese vegetarian cuisine beyond the usual staples, training chefs and compiling recipes into a new cookbook to boost hospitality and support local farmers. Agri Market Certainty: In Monggar, farmers are shifting toward fruit farming because Bhutan Agro Industries Limited offers a guaranteed buyer, including premiums for organic produce.

Bhutan Tourism & Food: Phuentshogling is pushing authentic Bhutanese vegetarian cuisine beyond ema datshi, with a week-long chef training and a new cookbook, aiming to help hotels and restaurants serve more traditional dishes and support local farmers. GNH & Development Policy: A Thimphu workshop explored building an international alliance to advance well-being-centred governance, positioning Bhutan’s GNH approach as a model for measuring progress beyond GDP. Agribusiness & Rural Income: In Monggar, farmers are shifting from maize to fruit cultivation as Bhutan Agro Industries Limited offers a guaranteed buyer for pineapple and mango, including a premium for organic produce. Jobs & Skills: Bhutan’s part-time employment system is starting to convert registrations into real work, with students gaining internships and employers building early hiring pipelines. Youth & Urban Strategy: Gelephu Mindfulness City is highlighted as Bhutan’s attempt to curb youth exodus by pairing economic opportunity with culturally anchored, values-led urban development. Regional Digital Payments Link: Bhutan is among countries connected to India’s UPI for person-to-merchant payments, expanding cross-border digital commerce options.

GNH on the world stage: A five-day workshop in Thimphu explored creating an international alliance to put well-being alongside GDP, with UN momentum building around broader progress measures. Tourism skills for local value: Phuentshogling’s hospitality sector is training chefs and compiling a cookbook to help hotels serve more authentic Bhutanese vegetarian dishes, aiming to boost local farmers and tourism experiences. Payments expansion with Bhutan link: Bhutan is listed among countries where UPI-based person-to-merchant payments are now live, showing India’s digital payments reach is widening beyond its borders. Farm-to-processor push in Monggar: Bhutan Agro Industries Limited is buying fruit harvests like pineapple and mango, driving a shift toward large-scale fruit farming with guaranteed buyers and added support for organic produce. Jobs pathway for students: Bhutan’s part-time employment system is starting to turn registrations into real work, with students gaining experience and income while employers test the model. Industry under tighter environmental watch: The Department of Industry inspected 154 industrial and delegated activities in 2025–26, focusing on pollution control, waste management, and compliance with environmental clearances. Youth exodus response: Gelephu Mindfulness City is being framed as a Bhutan-led solution to retain young people by pairing economic opportunity with cultural and environmental values.

Renewables Push: Bhutan’s Ministry of Finance has rolled out the implementation framework for the Renewable Energy Tax Exemption Act 2026, offering time-bound tax relief (customs duty, excise tax, GST on direct inputs, and POTT exemptions) to approved renewable projects as the country targets 25GW clean energy capacity. Tourism Demand: Bhutan welcomed 25,195 international visitors in June 2026—up 118.6% year-on-year—with Indian tourists still the biggest share (about 71%) and average stays at 5.76 days, supporting the push for more balanced market diversification. Jobs & Skills: A part-time employment system is starting to convert registrations into real work, with over 1,100 job seekers and 40+ employers already on board, giving students early workplace experience and income. Industry Expansion: A feasibility study for the proposed Bokajuli Industrial Park in Samdrup Jongkhar is complete and deemed viable, aiming to expand Bhutan’s industrial base in the east and strengthen cross-border trade links with India. Education Pipeline: Bhutan’s government says a Tsirang college under a PPP model is still in exploratory stages, with no formal proposal submitted yet and feasibility work required before moving forward.

Renewables Benchmark: A Stanford-backed “Solartopia” snapshot says Bhutan (along with Albania, Nepal and Iceland) is generating renewables at a 100% equivalent of what it consumes, reinforcing the global shift toward wind-water-solar. Renewable Investment Push: Bhutan’s Ministry of Finance has rolled out a Renewable Energy Tax Exemption framework under the 2026 Act, offering time-bound customs, excise and GST relief for approved projects to cut upfront costs and attract investors. Energy & Jobs Momentum: Monggar farmers are leaning into fruit farming with a guaranteed buyer model via Bhutan Agro Industries Limited, while a part-time employment system is starting to convert registrations into real internships and work experience. Skills-to-Work Focus: A World Youth Skills Day discussion highlighted the need to move beyond enrolment so young women can land sustainable jobs, with emphasis on partnerships, industry links and safe workplaces. Tourism Numbers: Bhutan logged 25,195 international arrivals in June 2026, up sharply year-on-year, with average stays of 5.76 days. Consumer Watch: A new market study warns Bhutan’s egg prices are the highest in South Asia, pointing to import restrictions that limit competition and keep prices elevated. Higher Education Plan: Government says a proposed Tsirang college under PPP is still at feasibility and no formal proposal has been submitted yet.

Bhutan Youth & Jobs: Gelephu Mindfulness City is being pitched as Bhutan’s answer to youth exodus, aiming to blend economic opportunity with Bhutan’s GNH values. Regional Finance Security: BIMSTEC wrapped up capacity-building on anti-money laundering and counter-terror financing, while member states also finalized an action plan to tackle illicit financial flows and set up a contact point network for FIUs. BIMSTEC Governance: BIMSTEC Secretary General Indra Mani Pandey said comparisons with SAARC are “misleading,” and hinted Bangladesh may host the 2027 summit marking BIMSTEC’s 30th anniversary. Local Agriculture Market: Monggar farmers are shifting into large-scale fruit farming as Bhutan Agro Industries Limited offers an assured buyback for pineapple and mango, including a premium for organic produce. Thimphu Employment Push: Bhutan’s part-time employment system is starting to convert registrations into internships and jobs, though early challenges remain. Industrial Oversight: Bhutan’s Department of Industry inspected 154 industrial activities in 2025–26 to strengthen compliance with environmental clearances. Cross-border Payments: UPI’s international expansion now includes Bhutan, with person-to-merchant payments live across nine countries.

Renewables Push: Bhutan’s Ministry of Finance has rolled out a Renewable Energy Tax Exemption framework under the 2026 Act, offering time-bound relief on customs duty, excise tax and GST for approved projects, plus exemptions on qualifying property transfer tax—aimed at cutting upfront costs and speeding clean power investment. Tourism & Trade: June 2026 brought 25,195 international arrivals to Bhutan, up 118.6% year-on-year, with Indian visitors still leading but non-India markets holding steady; meanwhile, Tsirang is building roadside stopovers along the Thimphu–Gelephu highway to create local sales opportunities as Gelephu Mindfulness City ramps up traffic. Jobs & Skills: A part-time employment system is moving from registrations to real work, with early uptake by students and employers—showing promise while highlighting operational teething issues. Food Security & Prices: Bhutan’s egg market study warns prices are among the highest in South Asia, pointing to import policy limits that reduce competition; and a Food Balance Sheet update reiterates heavy reliance on imports for staples like cereals, oils and sugar despite strength in some crops. Climate Watch: NCHM warns a strong El Niño may persist through the monsoon, with above-normal temperatures and uncertain rainfall patterns. Regional Business Signals: Bhutan is also mentioned in India’s UPI cross-border expansion, with UPI merchant payments live in Bhutan via partner institutions.

Bhutan Industry Watch: Bhutan’s Department of Industry inspected 154 industrial and delegated activities in FY2025–26, with tougher checks on environmental management plans, pollution control, waste systems and Environmental Clearance conditions—41 in Thimphu and 113 elsewhere—signaling tighter oversight as new parks and estates expand. Renewables Push: The Ministry of Finance rolled out the Renewable Energy Tax Exemption Act 2026 framework, offering time-bound customs duty, excise tax and GST relief on direct renewable project inputs, plus exemptions on qualifying property ownership transfer tax, to attract investment and diversify beyond hydropower. Industrial Expansion: A feasibility study for the proposed Bokajuli Industrial Park in Samdrup Jongkhar is complete and deemed viable, positioning it as an eastern industrial hub near the Assam border and linked to Phuntshorabtenling to boost jobs and cross-border trade. Tourism Demand: Bhutan recorded 25,195 international tourist arrivals in June 2026, up 118.6% year-on-year, with Indian visitors still leading (17,814) while non-India markets remain steady; average stay was 5.76 days. Regional Finance & Security: BIMSTEC finalized an action plan against illicit financial flows and capacity-building steps on AML/CFT, while its security chiefs endorsed practical maritime guidelines for disaster relief and law enforcement cooperation.

BIMSTEC Diplomacy: BIMSTEC Secretary General Indra Mani Pandey pushed back on comparisons with SAARC, saying they’re “misleading and misplaced,” and stressed BIMSTEC’s own mandate on Bay of Bengal development and security. Regional Finance: BIMSTEC also finalised an action plan to curb illicit financial flows, alongside an MoU on capacity building to fight money laundering and terrorist financing, with a 2026-28 work plan and plans to operationalise a contact point network for FIUs. BIMSTEC Summit 2027: Pandey said Bangladesh, as chair, may host the 2027 summit to mark BIMSTEC’s 30th anniversary. Bhutan Energy Investment: Bhutan’s Ministry of Finance issued the implementation framework for renewable energy tax exemptions under the 2026 Act, offering time-bound relief on customs duty, excise tax and GST for approved projects to attract investors. Tourism Numbers: Bhutan recorded 25,195 tourist arrivals in June, up 118.6% year-on-year, with Indian visitors still the largest share. Education PPP Check: A Tsirang college under a PPP model remains at the exploratory stage, with no formal proposal submitted yet. Food Prices Watch: A new study flags Bhutan’s egg prices as the highest in South Asia, linking it to import policy limits on competition. Food Security: Bhutan’s Food Balance Sheet 2024 shows heavy reliance on imports for staples like cereals, oils and sugar despite strength in some crops. Wildlife & Livelihoods: WWF-Bhutan-supported Snow Leopard Women’s Groups in Nubri are helping document livestock attacks to improve responses to human-wildlife conflict.

BIMSTEC Maritime Security: Ajit Doval chaired the 5th BIMSTEC National Security Chiefs’ meeting in New Delhi, where members including Bhutan adopted non-binding maritime HADR guidelines and endorsed guiding principles for maritime law enforcement to improve safety and coordination in the Bay of Bengal. Digital Payments Watch: India’s UPI hit 55.49 crore users by June 2026 and processed 24,161.69 crore transactions worth ₹314.23 lakh crore in FY26, while UPI is now live in Bhutan and other countries—an important signal for Bhutan’s own digital finance ambitions. Food Prices & Competition: Bhutan’s egg market study says high retail prices (about Nu 18 per egg) are being sustained by the long-standing ban on private egg imports, limiting competition even as domestic production exists. Consumer Protection: Bhutan’s CCAA reports refund refusals and undelivered goods as top consumer complaints, with interventions securing refunds of Nu 2.78 million. FDI Momentum: Bhutan approved 21 new FDI projects worth Nu 165.6 billion in 2025–26, with 704 expected jobs, even as new FDI registrations fell. Local Business & Tourism Infrastructure: Tsirang District is building roadside stopovers along the Thimphu–Gelephu highway, including an agro-tourism park and a streamside recreational facility, to support travellers and local farmers. Climate Risk: NCHM warns a very strong El Niño is likely to persist through the 2026 monsoon, raising the odds of above-normal temperatures and uncertain rainfall.