The Bhutanese Leading the way.
The Free Trade Agreement (FTA) between Bhutan and Thailand will now extend to the Gelephu Mindfulness City (GMC).
Previously, the FTA excluded special administrative regions. The two countries have both agreed to remove that clause now.
The revision was presented to the National Assembly on Wednesday by the Minister for Industry, Commerce and Employment, Namgyal Dorji.
The objectives of the agreement are to liberalise and facilitate trade in goods between the two countries, strengthen economic and technical cooperation for mutual benefit, enhance the efficiency and competitiveness of their respective economies, and promote transparency in the implementation of laws and regulations related to trade.
A wide range of Bhutanese products are expected to benefit from zero customs duty under the FTA. Key exports such as essential oils and yathra, which currently attract a five percent tariff, will qualify for duty-free access. Products facing a 10 percent tariff, including juices, areca nut, apples, cordyceps, and cement, will also benefit.
Spices such as ginger, turmeric, and cardamom, which currently face a 20 percent tariff, along with honey, pickles, and jams subject to a 30 percent tariff, will be eligible for zero customs duty. Higher tariff items, including oranges, matsutake mushrooms, and coffee that currently face 40 percent tariffs, as well as potatoes, tea, and alcoholic beverages subject to a 60 percent tariff, will likewise be covered under the agreement.
However, other applicable taxes, such as Goods and Services Tax and Value-Added Tax, will continue to be imposed in both countries in accordance with their respective national regulations.
Under the Customs Duty Act of Bhutan 2021, most goods imported from third countries, including Thailand, are currently subject to a 10 percent customs duty.
According to the Ministry of Industry, Commerce and Employment, the FTA aims to boost Bhutan’s exports by liberalising and facilitating trade in goods, strengthening economic and technical cooperation, improving economic efficiency and competitiveness, and promoting transparency in trade-related laws and regulations.
