Bhutan, being a land locked country, has limited trade opportunities. With the Ngultrum being pegged with the Indian Rupee, Bhutan conducts a majority of its cross border trade with India. Apart from India, the other important trading partners are Bangladesh and Nepal.
An analysis done on Non Tariff Measures (NTMs) in South Asia: Assessment and Analysis points out that the rapid growth in NTMs was major obstacle in trade liberalization among SAARC nations.
The Assessment and Analysis of NTMs in South Asia also says that the major recommendations made by the study include developing a lobby and advocacy agenda for reducing and eliminating NTMs by creating a forum for regular interactions between the key government officials and trade bodies on NTM issues.
The Deputy Secretary General, Bhutan Chamber of Commerce and Industry (BCCI), Kezang Wangdi, said that BCCI is bridge between the private sector and the government for facilitation and promotion of trade in the country, and in the region related to tariff and non tariff as there is lack of clear directives. BCCI expects the findings of the NTMs in South Asia study to further improve and promote trade in the region.
Shaquib Quoreshi, Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, said that the main deliverable of project are to further diagnosis of non-tariff measures in the region to identify their trade restricting impact, if any, and come up with appropriate policy recommendation and to build, and create a platform for regional public-private dialogue for regular interaction and policy discussion among the stakeholder in the region.
He said the lack of Mutual Recognition Agreement (MRA) of quality standards amongst the countries of the region and absence of regional accreditation board is a major impediment for market access. He said that major bottlenecks are also caused due to the lack of harmony between the different customs and procedures of the countries in the region.
According to the analysis on NTMs in South Asia, the specific NTM issues in Bhutan are port restrictions. Exports from Bhutan are required to pass through notified exit and entry points (Land Custom Stations) in India, Bangladesh and Nepal. Being a landlocked country, Bhutan has to use Indian territories and ports for transshipment of products to other countries. For transshipments to Bangladesh, India and Nepal, Bhutanese exports have to go through specific ports of entry as per the requirements of relevant trade protocols existing between India, Bangladesh, Nepal and Bhutan.
The other restriction is the quantitative restriction. The imports from countries other than India, in the SAARC countries, enters Bhutan in truck loads and not in the standardized containers-loads of quantity into comparable container-loads of quantity is avoided, and thus this quantitative restriction on imports is not applied for imports from SAARC countries.
Other restrictions include license requirement, certification requirement, and para-tariffs. Each import consignment is required a separate import license for the already registered importer. However, the import license is issued free of cost, and does not take more than 1 to 2 working days.
As for the certification requirement, Bhutan’s export of selected fresh farm produce, tangerines in particular, need certification for mandatory fumigation, and other health related issues, in compliance with SPS requirements. Mandatory grading and sorting is done and relevant certificates are issued for tangerines, and also for pebbles and boulders for export.
Bhutan faces a variety of state-level para-tariffs while entering India. Bhutanese products face para-tariffs in Bangladesh in the form of supplementary and regulatory duty for many products.
The analysis also point to irregularity in banking transaction with a particular Bangladeshi bank was concern. However, a major initiative has been already been taken by forming a Bhutan- Bangladesh Banking Sub-Group to address the financial transaction irregularities. The NTMs in South Asia, Assessment and Analysis says that absence of any bank branches at the major border port on the Bangladeshi side at Burimari is an inconvenience to Bhutanese traders.