5 November, 2009 - A key feature in the renewed Bhutan – Bangladesh bilateral trade agreement that will be signed when Bangladeshi Prime Minister, Sheikh Hasina, visits this week is the addition of a new trade route that should benefit eastern Bhutan.
The new route to Tamabil, northeastern Bangladesh, passes through the Indian states of Assam and Meghalaya and is the fifth route the two countries have identified to enhance trade.
It will be a shorter distance for eastern Bhutanese exporters to use this route than come to Burimari near Siliguri, India, from the southeastern town of Samdrup Jongkhar which is about 400 kilometres away,” said trade director of the ministry of economic affairs Sonam P Wangdi. “Once the agreement is signed people can start using this route and check its feasibility.” Export items from the east include gypsum, dolomite, limestone, talc and mandarin.
Burimari, which is about 117 kilometres from Phuentsholing, is the most active trade route currently being used by Bhutan to export horticulture and mineral products and import garments and melamine products from Bangladesh.
The other three routes are Banglabandh via the Indian state of West Bengal, which is used by Nepal, and Haluaghat and Nakugaon on the Meghalaya border that could be used by central Bhutan. These routes have not been used so far.
The number of items that could be traded between the two countries has also been increased to 90 after consultations with the private sector said trade officials. On the Bangladeshi export list are garments, cosmetics, pharmaceuticals, footwear, kitchenware, carpets, furniture and packaged foods. Bhutan’s export list mainly consists of processed agriculture and horticulture products and some mineral products. Mandarin is Bhutan’s top export to Bangladesh.
“Since the start of the trade with Bangladesh in 1988 Bhutan has been giving duty free access to all imports from Bangladesh,” said the joint director of the foreign trade division of the ministry of economic affairs, Sonam Wangchuk. Bangladesh imposes a reduced 15 percent duty on 18 products imported from Bhutan.
Sonam Wangchuk said that trade with Bangladesh was one of the main sources of hard currency earning for Bhutan other than the tourism industry. Bhutan also always had a trade surplus with Bangladesh.
“This has got to do with the size of our market,” said trade director Sonam P Wangdi. “If you look around almost every household in Bhutan has Bangladesh made melamine kitchen ware but there is only so much we can buy.”
Another benefit of trading with Bangladesh was that it had made warm clothes affordable to most Bhutanese.
The bilateral trade agreement which was first signed in 1988 and renewed several times does not talk about the possibilities of export of power to Bangladesh which has been mentioned by Bangladeshi officials in recent years.
By Phuntsho Wangdi
