Agreement on Trade Commerce and Transit between India and Bhutan
On 12th February 2020, India and Bhutan signed an agreement on trade, commerce and transit, which is expected to further boost the relationship between the two neighboring countries. The agreement was signed by the Commerce and Industry Minister of India, Piyush Goyal and the Economic Affairs Minister of Bhutan, Lyonpo Loknath Sharma.
The agreement is aimed at promoting bilateral trade while ensuring free transit of goods between the two countries. Under the agreement, Bhutan will have free access to the Indian market, and its exports to India will be exempted from any duties or taxes. This is expected to give a major boost to Bhutan‘s economy, which is heavily reliant on India for trade.
India, on the other hand, will have access to Bhutan‘s hydropower sector, which could help India in meeting its growing energy demands. The agreement also includes provisions for the establishment of trade facilitation centers, joint trade committees and a dispute resolution mechanism.
The agreement is seen as a major milestone in the relationship between the two countries, as it will not only boost trade but also help in improving connectivity and promoting people-to-people contact. India and Bhutan share a unique relationship built on strong cultural and historical ties, and this agreement is expected to further strengthen this bond.
This agreement is also in line with India‘s ‘Neighborhood First‘ policy, which aims to strengthen ties with its immediate neighbors. Bhutan, being one of India‘s closest neighbors, holds a strategic position in India‘s foreign policy.
However, there are some challenges that need to be addressed for the agreement to be fully effective. One of the major challenges is the lack of infrastructure, which hinders the smooth movement of goods between the two countries. This issue needs to be addressed through the development of better transportation facilities and infrastructure.
In conclusion, the agreement on trade, commerce and transit between India and Bhutan is expected to have a positive impact on the bilateral relationship between the two countries. It has the potential to boost trade, improve connectivity, and promote people-to-people contact. However, the effective implementation of the agreement will require the building of infrastructure and addressing other challenges that currently exist. It is hoped that the two countries will work together to overcome these challenges and realize the full potential of their trade relationship.