Bhutan: Trade Profile

Foreign Trade in Figures

Bhutan is a small economy highly open to foreign trade, which represented 85% of its GDP in 2021 (World Bank, 2023). Bhutan has been involved in a sub-regional economic cooperation process for several years, being a member of several regional organisations (SAPTA/SAARC) and a candidate to join the WTO since 1999. Nevertheless, the accession process has remained frozen since 2017 as the government estimates joining the WTO would be a distraction from providing necessary conditions for a high gross happiness index (GNH).

The country exports essentially Ferroalloys (USD 224 million), Dolomite (USD 30.9 million), Planes, Helicopters, and/or Spacecraft (USD 17 million), Cement (USD 15.6 million), and Gypsum (USD 15.1 million), exporting mostly to India (USD 322 million), Nepal (USD 10.4 million), Italy (USD 6.16 million), South Korea (USD 1.45 million) and Germany with USD 1.3 million (OEC, 2023). Hydropower also contributes over 20% of government revenue and 14% of Bhutan's GDP, with production levels expected to increase. Bhutan imports Refined Petroleum (USD 105 million), Computers (USD 96.8 million), Coke (USD 36.7 million), Light Synthetic Cotton Fabrics (USD 35.8 million) and Wood Charcoal (USD 35 million), importing mostly from India (USD 868 million), China (USD 108 million), Thailand (USD 65.5 million), United Arab Emirates (USD 12.1 million), and South Korea (USD 11 million).

India is the country’s main trading partner, accounting for 93.3% of total exports and 77.3% of total imports in 2021 (data by the Ministry of Finance & OEC, 2023). India's largest electricity trader PTC India signed a power purchase agreement in 2019 with Bhutanese state-owned generator Druk Green Power to buy the firm's surplus output.

Since 2008, Bhutan has registered a trade deficit; a trend that is expected to continue in the years to come. Bhutan has the second largest trade deficit among the South-Asian countries, after Nepal. Over the years, imports increased drastically while exports remained generally stable. In 2021, the country exported USD 784 million worth of goods and USD 82 million of services while imports stood at USD 1220 million for goods and 221 million for services (WTO, 2022). This brought the trade deficit to USD 575 million. Bhutan recorded a trade Balance deficit in Bhutan increased to 11555 BTN Million (156 million USD) in the third quarter of 2022. (Royal Monetary Authority of Bhutan, 2023).

Foreign Trade Indicators	2017	2018	2019	2020	2021
Imports of Goods (million USD)	1,029	1,048	981	899	1,220
Exports of Goods (million USD)	573	606	674	651	784
Imports of Services (million USD)	203	221	209	215	221
Exports of Services (million USD)	160	181	167	133	82
Imports of Goods and Services (Annual % Change)	-0	7	-6	-12	16
Exports of Goods and Services (Annual % Change)	6	5	14	-20	9
Trade Balance (million USD)	-470	-417	-401	-311	-171
Foreign Trade (in % of GDP)	81	84	82	76	85
Imports of Goods and Services (in % of GDP)	51	53	48	46	53
Exports of Goods and Services (in % of GDP)	30	31	34	30	32

Source: WTO – World Trade Organisation ; World Bank - Latest available data.

To go further, check out our service Import Export Flows

Main Services

0.2 bn USD of services exported in 2019
TravelTravel +	71.34%
Personal travelPersonal travel	65.98%
Business travelBusiness travel	5.36%
TransportationTransportation	22.82%
Financial servicesFinancial services	2.15%
Insurance servicesInsurance services	1.55%
Computer and information servicesComputer and information services	1.21%
Government servicesGovernment services	0.91%
Other business servicesOther business services	0.01%
Royalties and license feesRoyalties and license fees	n/a%

0.2 bn USD of services imported in 2019
TravelTravel +	29.30%
Personal travelPersonal travel	27.33%
Business travelBusiness travel	1.97%
Construction servicesConstruction services	24.08%
TransportationTransportation	23.87%
Other business servicesOther business services	7.99%
Government servicesGovernment services	4.57%
Financial servicesFinancial services	4.20%
Computer and information servicesComputer and information services	3.44%
Insurance servicesInsurance services	2.46%
Royalties and license feesRoyalties and license fees	0.10%

Source: United Nations Statistics Division, Latest Available Data

Commercial Policy

International Economic Cooperation: Member of South Asian Association for Regional Cooperation (SAARC)

Member of Economic Cooperation Forum (BIMSTEC)

Bhutan is also a signatory to ‘Agreement on South Asian Free Trade Area (SAFTA)’, envisaged primarily as the first step towards the transition of SAARC countries into an Economic Union .
Assessment of Commercial Policy: Bhutan and WTO
Average Customs Duty (Excluding Agricultural Products): 18.01%

Trade Compliance

International Economic Cooperation: Member of South Asian Association for Regional Cooperation (SAARC)

Member of Economic Cooperation Forum (BIMSTEC)

Bhutan is also a signatory to ‘Agreement on South Asian Free Trade Area (SAFTA)’, envisaged primarily as the first step towards the transition of SAARC countries into an Economic Union .
Useful Resources: Department of Revenue and Customs (DRC)

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