India will allow exporters and importers from Bhutan “free and unhindered movement of goods” through four new entry and exit points for trade with third countries, agency reports said.
The decision was finalized last week when the two governments updated a bilateral Agreement on Trade, Commerce and Transit. Customs procedures for Bhutanese exports and imports too were streamlined, IANS news agency reported.
India is the largest trade and development assistance partner of the tiny Himalayan kingdom.
“Goods being transported through Indian roads from Phuntsholing to Samdrup Jongkhar will not be subjected to checking unless the security forces have information that they are of contraband nature or illegal,” trade director Sonam P Wangdi said.
“A letter of guarantee from the Bhutanese government will also avoid cumbersome and long import procedures in clearing goods imported for Bhutan,” he said.
India agreed to formalize the seaports and airports at Mumbai and Chennai and the Phulbari and Dawki land routes, which lead to Bangladesh, for use by Bhutanese traders.
According to Wangdi, the addition of the new transit points would be of great benefit to Bhutanese traders since these were alternative points.
“While the sea and air routes, with better transport network, would be options for Bhutanese traders, the two new routes – Phulbari and Dawki to Bangladesh – will benefit exporters of perishable goods and exporters of low-value high volume goods like gypsum and dolomite,” he said.
Phulbari, which is in close proximity to the existing route of Burimari, has better storage and warehouses that are expected to help traders if the latter road is blocked or its bridges washed away. The Dawki route, which passes through Meghalaya to Bangladesh, would help increase exports in the eastern region.
Nepal also uses Phulbari route to trade with Bangladesh.
Bhutan and Nepal—both landlocked nations—have majority of their foreign trade with India. Nearly two-third of Nepal’s total foreign trade is now directed to India, according to officials.