AGP Executive Report

Hydropower Trade: UPERC approved a 30-year deal to import 511 MW from Bhutan’s Khorlochhu Hydro Power Station into Uttar Pradesh at a fixed INR 6.75/unit tariff, aiming to meet peak summer demand and give long-term price certainty. Digital Payments: RBI and NPCI International launched UPI QR acceptance in Cambodia via NPCI’s cross-border link with Acleda Bank, enabling Indian travellers to pay at 4.5 million KHQR merchants, with a second phase planned for Cambodian travellers in India. Legislation Watch: Bhutan’s National Council sent the Livestock Bill 2025 back to the Economic Affairs Committee for further review after members raised concerns and asked for clarifications. Tax Policy: The National Assembly unanimously adopted expanded GST exemptions on essential goods, while the National Council sought details on how the GST Amendment Bill 2026 was initiated and how it affects already-imported stock. Public Health & Compliance: The Social and Culture Committee urged stricter enforcement of Bhutan’s Tobacco Control Act as lawmakers say monitoring is weak and smoking violations persist. Justice & Rights: A Bhutanese businessman received a nine-year prison sentence after a viral Facebook Live comment, reigniting debate over freedom of expression and politically sensitive prosecutions. Regional Cooperation: BIMSTEC joined the ITU Development Sector as a Sector Member, boosting cooperation on digital connectivity, AI, and telecom capacity building.

Hydropower Trade: UPERC approved a 30-year deal to import 511 MW of Bhutan’s Khorlochhu hydropower into Uttar Pradesh at a fixed INR 6.75/unit tariff at the Indo-Bhutan border, aiming to meet peak demand and give long-term price certainty. Digital Payments: RBI and NPCI International Payments (with Acleda Bank) launched UPI QR acceptance in Cambodia, enabling Indian travellers to pay at 4.5 million KHQR merchants, with a two-way corridor planned next. Tax & Policy: Bhutan’s National Council discussed a GST Amendment Bill 2026 proposing exemptions for 32 essential items, while lawmakers also asked how the changes originated and what happens to already-imported goods. Financial Sector: Royal Insurance Corporation of Bhutan (RICBL) reported a sharp 2025 profit drop to Nu 274.79m (down 63%) despite growth in assets and lending, as premium and commission income fell. Education & Human Capital: Bhutan’s first international K–XII school (EtonHouse) will start enrolling its inaugural cohort in August for ages 3–11, with phased expansion toward about 500 students. Public Health & Compliance: The NA Social and Culture Committee urged stricter enforcement of Bhutan’s public smoking rules as monitoring appears weak.

GST Relief Push: Bhutan’s National Assembly endorsed a Goods and Services Tax (Amendment) Bill 2026 to expand exemptions on essential items, including more rice varieties and a wider range of edible oils plus locally sourced butter, aiming to ease cost-of-living pressures. Public Debt Watch: Lawmakers raised concerns as Bhutan’s public debt hit 90.6% of GDP, with external debt dominating and currency risks flagged for hydropower and non-hydropower borrowing. Energy Outlook: Bhutan reiterated a long-term plan to reach 25,000 MW by 2040 (20,000 MW hydropower, 5,000 MW solar), with Nyera Amari I & II moving through project preparation. Co-op and Farmer Rules: National Council members questioned cooperative membership requirements in the Cooperatives and Farmer Groups Bill 2025, warning rural population decline could make minimum household-based membership hard to meet. Insurance Uptake Problem: The National Council urged higher subsidies for the Crop and Livestock Insurance Scheme after low enrollment, citing farmers’ inability to pay the remaining premium and administrative hurdles. Education Investment: MoESD and EtonHouse plan Bhutan’s first international K–XII school, with the inaugural cohort set to enroll in August for ages 3–11. Infrastructure Disruption: Government said it will monitor and manage recurring road disruptions from the Phuentshogling bypass works, as landslides and debris during rains keep affecting commuters.

GST Relief: Bhutan’s National Assembly endorsed expanded GST exemptions on essential goods, adding more rice varieties, edible oils, hygiene items and assistive devices to ease cost-of-living pressures. Public Debt Watch: Lawmakers flagged Bhutan’s public debt at 90.6% of GDP, with external debt dominance raising foreign-exchange and long-term repayment risks. Energy Strategy: The government reiterated a plan to reach 25,000 MW by 2040 (20,000 MW hydropower, 5,000 MW solar), with Nyera Amari I & II moving through project preparation. Insurance Results: RICBL reported a sharp 2025 profit drop to Nu 274.79m despite growth in assets and lending, as premium and commission income weakened. Education & Skills: MoESD and EtonHouse will enroll Bhutan’s first international K–XII school cohort in August for ages 3–11. Tourism Growth: Licensed tour operators rose to 1,633 as Thimphu continues to dominate the sector. Local Governance: Haa imposed a temporary construction freeze inside the Thromde while it reviews and updates urban planning rules. Agriculture Policy: The Livestock Bill was introduced with a clear message: it targets animal welfare, biosecurity and food safety—not slaughter promotion.

GST Relief for Essentials: Bhutan’s National Assembly endorsed expanded GST exemptions on essential goods, including more rice varieties, edible oils, hygiene items and disability assistive devices, aiming to ease cost-of-living pressures and close implementation gaps tied to Bhutan Trade Classification codes. Public Debt Watch: Lawmakers flagged Bhutan’s public debt rising to 90.6% of GDP, with external debt at Nu 285.2bn as of 31 March 2026, raising concerns about foreign exchange risk and long-term borrowing sustainability. Energy Pipeline: The government reiterated a 2040 target of 25,000 MW (20,000 MW hydropower, 5,000 MW solar) and pointed to major projects like Nyera Amari I & II moving through planning and preparatory phases. Insurance Profit Slump: Royal Insurance Corporation of Bhutan (RICBL) reported profit after tax falling to Nu 274.79m in 2025 (down from Nu 755.13m in 2024) despite growth in assets and lending, as premium and commission income weakened. Tourism Business Momentum: Bhutan saw a surge in licensed tour operators in 2026, with 172 new licenses issued between January and 21 May, bringing active licenses to 1,633, led by Thimphu. Urban Planning Freeze: Haa Dzongkhag imposed a temporary construction moratorium within Haa Thromde as it reviews and revises urban development plans and regulations to protect cultural heritage while updating infrastructure standards. Education for International Talent: MoESD signed with EtonHouse to launch Bhutan’s first international K–XII school, with inaugural enrolment starting in August for ages 3–11. Agriculture Risk Coverage Debate: National Council members pressed for higher subsidies for the crop and livestock insurance scheme after low uptake, arguing farmers can’t afford the remaining premium share. Infrastructure Accountability: MoIT faced questions on infrastructure design quality and climate resilience amid recurring road disruptions, with monitoring and mitigation measures promised.

Insurance & Finance: RICBL’s profit after tax plunged to Nu 274.79m in 2025 (down over 63%) even as assets, lending and liquidity kept expanding, with weaker premium and commission income driving the fall. Cost of Living Policy: The National Assembly endorsed expanded GST exemptions on essential goods, with the GST (Amendment) Bill 2026 moving to add more staple foods, edible oils, hygiene items and disability assistive devices to the exemption list. Public Debt Watch: Bhutan’s public debt rose to 90.6% of GDP, with external debt at Nu 285.2b as of 31 March 2026, raising concerns about foreign exchange risks and long-term borrowing sustainability. Energy Pipeline: Bhutan targets 25,000 MW by 2040 (20,000 MW hydropower, 5,000 MW solar), with projects like Nyera Amari I & II progressing through planning stages. Infrastructure & Risk: MPs pressed for stronger climate-resilient infrastructure planning after recurring road disruptions and concerns over technical assessments and durability. Education & Human Capital: EtonHouse Bhutan International School will enroll its first cohort in August for ages 3–11, aiming to bring international learning standards while embedding national values. Green Finance: Bhutan’s updated Green Finance Taxonomy 2026/Addendum is set for phased rollout over three years to guide sustainable lending and reduce greenwashing. Hydropower Exports: Hydropower export earnings fell to Nu 201.2m in early 2026’s first quarter despite higher generation, reflecting revenue pressure. Youth & Jobs: A growing share of Bhutanese youth are redefining success beyond government jobs amid high youth unemployment. Tourism Business: Licensed tour operators rose sharply in 2026, with Thimphu dominating the market. Agriculture Support: The National Council flagged low uptake of crop and livestock insurance and urged higher subsidies to make premiums affordable. Digital Payments Context: India’s UPI hit record May levels (23.2b transactions; Rs 29.90 lakh crore), with cross-border services including Bhutan highlighted as part of the broader regional payments shift.

Bhutan–Singapore Investment Boost: The National Assembly endorsed the double taxation elimination agreement with Singapore, a move lawmakers say will reduce tax friction for cross-border investors and strengthen the legal backbone for the Gelephu Mindfulness City (GMC) push. Tourism Business Expansion: Bhutan’s Department of Industry reported 172 new tour operator licenses issued between January and 21 May 2026, bringing active licenses to 1,633, with Thimphu holding over 84% of operators. Green Finance Rollout: Bhutan is set to implement an updated Green Finance Taxonomy 2026/Addendum in phases over three years, aiming to guide banks and developers on what counts as truly climate-aligned finance and to curb greenwashing. Hydropower Export Pressure: Early 2026 hydropower export earnings fell to Nu 201.2M in Q1 despite higher generation, as export revenue declined year-on-year. Energy & Education Partnerships: MoESD signed with Singapore’s EtonHouse to establish Bhutan’s first international school, starting operations in August, while MoENR advanced work on the Nyera Amari I and II integrated hydropower DPR phase. Infrastructure Safety Debate: MPs pressed MoIT on geotechnical testing costs and on whether infrastructure planning is keeping up with climate risks, as the ministry defended the rules as essential for safety in hazard-prone areas.

Bhutan–Singapore Tax Deal: Bhutan’s National Assembly endorsed the Double Taxation Avoidance Agreement with Singapore, a move lawmakers say will boost investor confidence and support the Gelephu Mindfulness City (GMC) by strengthening the legal and fiscal groundwork for cross-border investment. Hydropower Pipeline Update: MPs pressed for more clarity on the Nyera Amari I and II Integrated Hydropower Project as the government starts DPR work, while concerns linger over delays and limited public information on timelines. Urban Safety Rules: Thimphu’s Structure Plan 2023–2047 geotechnical testing requirements came under scrutiny in parliament, with MoIT defending the Nu 150,000 soil/geotechnical assessments as essential for earthquake-prone resilience. Green Finance Rollout: Bhutan will pilot its expanded Green Finance Taxonomy from June to November before a nationwide rollout in January 2027, aiming to align funding with sustainability goals. WTO Return: Bhutan has resumed its WTO accession process after nearly 17 years, signaling deeper integration into the global trade system. Tourism & Livelihoods: Tarayana’s 20th Annual Fair highlighted climate-resilient rural livelihoods, while local handicraft shops near Chimi Lhakhang continue to expand thanks to tourism demand. Digital Skills for Youth: A training programme in Phuentshogling focused on monetisation skills for young content creators, addressing the gap between online passion and income.

Thimphu Urban Safety & Cost: MoIT clarified that mandatory geotechnical/soil testing under the Thimphu Structure Plan 2023–2047 and City-wide Design Code is meant to manage earthquake-risk subsurface hazards, even for plots that look stable—after NA questions flagged the near Nu 150,000 burden on homeowners. Hydropower Pipeline: The Nyera Amari I and II Integrated Hydropower Project (404 MW) has moved into the DPR phase, but NA MPs pressed for clearer public timelines after repeated delays. Investment & Tax Framework: The NA endorsed Bhutan–Singapore’s Double Taxation Avoidance Agreement, positioning it as key legal groundwork for investment cooperation and the Gelephu Mindfulness City vision. Green Finance: Bhutan will pilot its expanded Green Finance Taxonomy from June to November, then roll it out nationwide in January 2027. Trade Integration: Bhutan has resumed its WTO accession process after 17 years, aiming for deeper global economic integration. Tourism & Local Livelihoods: Chimi Lhakhang-area handicraft shops are expanding with tourism demand, while a Singapore tourist death after feeling unwell on the Tiger’s Nest hike highlights safety and emergency readiness needs. Rural Support: Tarayana’s 20th annual fair ran May 29–31, spotlighting climate-resilient livelihoods and rural microfinance.

WTO & Trade: Bhutan has formally resumed its World Trade Organization accession process after 17 years, aiming for deeper global integration and a smoother post-LDC transition. Green Finance: Bhutan will pilot its expanded Green Finance Taxonomy from June to November, then roll it out nationwide in January 2027. Hydropower Oversight: NA MPs asked for clearer public timelines and more transparency on the Nyera Amari I and II Integrated Hydropower Project after repeated delays. Banking Reality Check: Bhutan’s banks remain profitable and deposits are rising, but SMEs and borrowers still face high borrowing costs that slow expansion. Tax & Investment Links: The NA endorsed the Bhutan–Singapore Double Taxation Avoidance Agreement to strengthen economic and tax cooperation. Tourism & Local Jobs: Chimi Lhakhang’s tourism boom is expanding Bhutan’s handicraft sector, with dozens of shops in Barp Gewog and income tied closely to visitor seasons. Community Finance & Health: Bhutan National Bank marked International Menstrual Hygiene Day with outreach at Pemacholing Nunnery in Tang, Bumthang. Safety on the Trail: A Singapore woman died in Bhutan on May 30 after feeling unwell during a hike to Tiger’s Nest; investigations and a post-mortem are ongoing.

Bhutan–Singapore Tax Deal: Bhutan’s National Assembly endorsed the Double Taxation Avoidance Agreement with Singapore, a move aimed at boosting investment clarity and economic cooperation. Bhutan Policy & Business Systems: Bhutan is piloting a formal part-time employment system in Thimphu, with up to 50 companies to be selected and job seekers (18+) able to apply once wages and working hours are approved. Agriculture Markets: Tsirang dairy farmers in Bhutan are getting steadier demand after a one-year supply agreement with Serkar Dairy in Thimphu, helping smooth seasonal milk surpluses. Culture & Heritage Governance: The Department of Culture and Dzongkha Development is drafting guidelines for establishing and running museums and heritage galleries, seeking consistent standards that can support cultural tourism and preservation. Banking & Community: Bhutan National Bank marked International Menstrual Hygiene Day at Pemacholing nunnery in Bumthang, distributing sanitary pads and running financial literacy outreach for nuns and dratshangs.

Tax & Investment: Bhutan’s National Assembly endorsed the Bhutan–Singapore Double Taxation Avoidance Agreement, a move aimed at boosting investment ties and clarifying tax cooperation. Energy & Regulation: Bhutan’s electricity tariff debate is also about who carries the risk premium for clean energy investment, with implications for regulation credibility and the cost of capital. Forestry & Exports: Bhutan is moving toward Forest Stewardship Council certification, starting with a pilot in Paro, Bumthang, Wangdue Phodrang and Thimphu, to improve sustainable timber management and unlock better access to global markets. Agribusiness & Jobs: Tsirang dairy farmers are getting steadier demand after a one-year supply deal with Serkar Dairy in Thimphu, while Thimphu begins piloting a formal part-time employment system to match job seekers with registered employers. Business & Culture: Bhutan’s Department of Culture and Dzongkha Development is drafting unified museum and heritage gallery guidelines to standardise approvals and operations as cultural tourism grows. International Finance (Context): Reports also highlight Bhutan’s wider push to strengthen economic cooperation and market readiness as regional partners expand trade and finance links.

Digital Finance & Compliance: BIT says Matrixport Technologies Ltd has received British Virgin Islands Financial Services Commission approval for a SIBA Investment Business Licence and VASP registration, strengthening regulated digital-asset operations. Local Jobs & Labour: Bhutan’s Thimphu pilot for a formal part-time employment system has started, with up to 50 companies to be selected and job seekers (18+) able to apply once vacancies and terms are approved. Agribusiness: Tsirang dairy farmers in Bhutan are getting steadier demand after Tsirang Dairy Product signed a one-year supply deal to send about 500 litres of fresh milk daily to Serkar Dairy in Thimphu for processed products. Heritage & Standards: DCDD is drafting unified museum and heritage gallery guidelines to standardise approvals, operations and quality across public and private sites. Forestry & Exports: Bhutan is moving toward Forest Stewardship Council certification via a pilot covering 50,000 hectares, aiming for better timber traceability and improved access to global markets. Energy Transition: EV interest is rising as fuel prices climb; registrations increased to 1,343 EVs nationwide, while the government plans more EVs and electric buses to cut fuel imports. Tourism & Hospitality: Rare India has added Bhutan’s Zhiwaling to its curated portfolio, highlighting its heritage-led luxury model and National Geographic Unique Lodge certification. Water Security: The National Council reviewed Bhutan’s Climate Resilient Watershed Management report, flagging drying water sources, shifting rainfall and institutional gaps threatening drinking water, farming and hydropower.

Museum & Heritage Standards: Bhutan’s DCDD is drafting unified guidelines for establishing and running museums and heritage galleries, aiming to standardise approval, operations and quality across public and private sites—supporting cultural education, tourism and preservation. Dairy Market Linkages: In Tsirang, a one-year supply deal between Tsirang Dairy Product and Thimphu’s Serkar Dairy is giving 240+ farmers a steadier summer market, with about 500 litres of fresh milk shipped daily for Greek yoghurts and other processed products. Jobs & Labour Policy: Thimphu has started a pilot formal part-time employment system (3–6 months), with up to 50 vetted employers posting approved vacancies, wages and working hours for job seekers aged 18+. Forest Certification for Timber Access: Bhutan is moving toward Forest Stewardship Council certification, starting with a pilot covering 50,000 hectares in Paro, Bumthang, Wangdue Phodrang and Thimphu to improve sustainable timber traceability and global market access. Energy & Fiscal Pressure: Parliament discussions highlight a widening gap as non-hydropower external debt rises to about Nu 119 billion, increasing the share that must be serviced from domestic revenue. Agriculture Exports: Bhutan exported 10,975 MT of primary agricultural products in Jan–Apr 2026, led by oranges (8,012.40 MT) and arecanut (1,254.10 MT), mainly to India and Bangladesh. EV Uptick on Fuel Costs: Electric vehicle registrations rose by 165 between February and April to 1,343 total, with dealers citing higher inquiries and sales as fuel prices climb. Tourism Portfolio Boost: Rare India has added Bhutan’s Zhiwaling to its curated experiential hospitality portfolio, spotlighting heritage-led luxury and sustainability credentials.

Education & Skills: Bhutan and EtonHouse International Education Group have signed a landmark deal to open the country’s first international K–12 school in AY 26/27, aiming to build globally competent learners while keeping Bhutanese culture at the core. Forestry & Trade: Bhutan has started a Forest Stewardship Council (FSC) certification pilot in Paro, Bumthang, Wangdue Phodrang and Thimphu, covering 50,000 hectares, to improve timber traceability and unlock better global market access. Climate Resilience & Water: The National Council reviewed Bhutan’s Climate Resilient Watershed Management report, with findings pointing to drying springs, shifting rainfall and stressed watersheds affecting drinking water, farming and hydropower. Energy Policy: Bhutan’s electricity tariff debate is tied to the bigger question of who bears the risk premium for clean development, as the country balances affordability with climate investment credibility. Transport Transition: EV interest is rising as fuel prices climb, with registrations up and dealers reporting stronger sales, though charging gaps still slow adoption. Agribusiness Exports: Bhutan exported 10,975 MT of agricultural products in Jan–Apr 2026, led by oranges and arecanut, mainly to India and Bangladesh. Fiscal Watch: The RAA warns fuel price support is becoming a growing fiscal burden and urges targeted subsidies, tighter monitoring and an early exit plan. Crypto Flows: Bhutan-linked wallets moved another 90 BTC (about $7m), pushing 2026 transfers past $237m and renewing questions around its sovereign Bitcoin strategy. Regional Business Links: Bhutan’s trade corridors and rail connectivity plans remain stalled pending India’s approvals, delaying lower-cost export routes for southern districts.

Education & Skills: Bhutan’s MoESD and EtonHouse International Education Group will launch EtonHouse Bhutan International School, the country’s first international K–12 school, opening in Academic Year 26/27 with an inquiry-led model rooted in Bhutanese culture and GNH. Energy & Climate Finance: Bhutan’s electricity tariff debate is framed as more than pricing—it’s about who carries the risk premium for clean development and how regulation and capital costs shape outcomes. Water Security: The National Council reviewed climate-resilient watershed management and heard that springs and water sources are drying, rainfall is shifting, and development plus institutional gaps are stressing watersheds that underpin drinking water, farming and hydropower. Transport Transition: EV interest is rising as fuel prices climb; registrations increased to 1,343 by April, but charging gaps and high upfront costs still slow adoption. Agriculture Exports: Bhutan exported 10,975 MT of primary agri-products in Jan–Apr 2026, led by oranges (8,012 MT) and arecanut, mainly to India and Bangladesh. Trade Logistics: Key southern trade corridors and rail connectivity remain stalled pending India’s approvals, delaying lower-cost market access. Public Finance Watch: Parliament discussions highlight a widening mismatch as non-hydropower external debt surges, adding pressure on domestic revenue. Bitcoin Reserves: On-chain reports say Bhutan transferred another 90 BTC (~$7m) to a Segwit address, pushing 2026 outflows above $237m and renewing questions about sovereign crypto reserve management. Regional Diplomacy: PM Tshering Tobgay’s Assam visit included prayers at Maa Kamakhya Temple and renewed commitments to strengthen Bhutan–Assam ties.