The Bhutanese Leading the way.
The industrial sector remains heavily dominated by small-scale industries, which make up over 70% of the country’s 13,008 active industry licenses, according to recent data.
While cottage industries account for nearly 25%, medium and large industries remain a minority.
The latest statistics reveal that among the total active industry licenses, small-scale industries constitute 9,183 (70.59%), followed by 3,219 cottage-scale industries (24.75%), 392 medium-scale industries (3.01%), and 214 large-scale industries (1.65%).
Despite the high number of small-scale industries, reports highlight several challenges that hinder their expansion into medium or large enterprises. These include limited access to financing, market competition, infrastructure gaps, and regulatory hurdles. Many small businesses struggle with scalability due to resource constraints, while cottage industries often lack the technological advancements needed for growth.
Additionally, there is a significant concentration of industries in specific dzongkhags and urban centers, which raises concerns about regional economic disparities. Rural areas continue to lag behind in industrial activity, highlighting the need for more inclusive industrial policies and incentives.
Beyond scale, Bhutan’s industries are also classified into three major categories: Service, Production & Manufacturing (P&M), and Contract. The distribution reveals that the majority—11,032 industries—fall under the Service category, while 1,355 belong to P&M and 621 to Contract-based businesses. This classification highlights the dominance of the service sector, reflecting Bhutan’s evolving economic structure.
The urban-rural divide is another key factor, with industrial activities predominantly centered in urban areas and thromdes, leaving rural regions with fewer opportunities for economic development.
As Bhutan aims for economic diversification, the government is considering targeted policies to support medium and large-scale industries. Investment incentives, easier access to credit, and infrastructure improvements are some of the proposed measures to help businesses scale up. Encouraging foreign investments and public-private partnerships may also contribute to a more balanced industrial landscape.
