India is Bhutan’s largest trading partner. A free trade regime exists between India and Bhutan. The India-Bhutan Trade and Transit Agreement was first signed in 1972. 2006 was the last time that this Agreement was renewed, for a period of 10 years. This Agreement also provides for duty free transit of Bhutanese exports to third countries.
In 2014, bilateral trade reached Rs.7965 crore. Imports from India were Rs. 4785 cr., accounting for 84.13% of Bhutan’s total imports. Bhutan’s exports to India stood at Rs. 3179 cr. (including electricity) and constituted 89.38% of its total exports. Total bilateral trade grew by about 9.31% in 2014.
Exports to Bhutan (Imports from India) (Rs. Cr)
Exports to Bhutan from India as a % to total Bhutanese import
Imports from Bhutan(Exports to India) (Rs. Cr)
Imports from Bhutan to India as a % to total Bhutanese export
Major imports from India to Bhutan are diesel, parts of hydraulic turbines, including regulators, ferrous products, petrol, wood charcoal, other coal, coke and semi coke, portland cement, husked brown rice, mineral products, base metals and articles, machinery, automobiles & spares, vegetables, nuts, spices, processed food and animal products, chemicals, wood, plastic and rubber.
The major items of export from Bhutan to India are electricity from the four Hydropower Plants of Basochhu, Chukha, Tala and Kurichhu (a total of 1840MW of electricity is generated, out of which about 460MW is consumed domestically and the rest, exported to India), ferro silicon, portland cement, dolomite, carbides of calcium, carbides of silicon, cement clinkers, timber and wood products, potatoes, cardamom, fruit products etc.