Trade Profile

Bhutan: Trade Profile

Foreign Trade in Figures

Bhutan is a small economy highly open to foreign trade, which represented 76% of its GDP in 2020 (World Bank, 2022). 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 ($104M), semi-finished Iron (USD 24.4M), cement (USD 13M), dolomite (USD 10.9M), and carbides (USD 5.24M), exporting mostly to India (USD 173M), Italy (USD 4.88M), Turkey (USD 856k), Singapore (USD 630k), and Japan (USD 542k). 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 81.3M), Planes, Helicopters, and/or Spacecraft (USD 77.6M), Wood Charcoal (USD 28M), Iron Reductions (USD 26.7M), and Cars (USD 25.2M), importing mostly from India (USD 623M), France (USD 78.8M), Thailand (USD 51.6M), China (USD 13.4M) and South Korea (USD 12.3M). India is the country’s main trading partner, accounting for 94.7% of total exports and 75.2% of total imports in 2020 (data by the Ministry of Finance & OEC, 2022). 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 2020, the country exported USD 183 million worth of goods, while imports stood at USD 820 million (OEC, 2022). This brought the trade deficit to USD 637 million, one of the largest in history. Bhutan recorded a trade deficit of 4801.25 BTN Million (69.96 million USD) in the second quarter of 2021 (Royal Monetary Authority of Bhutan, 2022).

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)
National Organisation of Intellectual Property: The Industrial Property Division.

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