AGP Executive Report

Population Policy: Bhutan is pushing ahead with its “Third Child Plus” cash incentive, offering $105 monthly for third (and later) children until age three, as Prime Minister Tshering Tobgay calls the declining fertility rate an “existential” crisis amid emigration and an aging society. Local Governance: In Thimphu’s thrompon race, candidates are centering water security and municipal basics—Ugyen Dorji pledges full water coverage, while Sonam Choden links “basics and beautification” to services like roads, waste management and parking. Phuentsholing Priorities: Phuentsholing candidates Tashi Wangchuk and Deepen Ghallay focus on safer, cleaner, smarter city management, with plans for water upgrades, drainage for monsoon risks, and faster local approvals to support trade and business. Trade & Energy: Bhutan has resumed WTO accession talks after 18 years, while an EU-backed South Asia energy connectivity project (€5m) is launched in Kathmandu to expand cross-border power cooperation across Bhutan, India, Nepal and others. Regional Border Infrastructure: North Bengal’s Indo-Bhutan border projects—Jalgaon Land Port and Hashimara Civil Airport expansion—are gaining momentum as state officials clear land and advance early works.

Population & incentives: Bhutan is pushing its “Third Child Plus” programme, offering monthly cash support for third and later children as the country confronts an “existential” population crisis driven by falling birth rates and youth migration. Local governance & services: Thimphu Thrompon candidate Ugyen Dorji says his second-term focus will be full water coverage and better municipal service delivery, while Sonam Choden’s campaign centers on “basics and beautification” including water, roads, waste management and parking. Phuentsholing priorities: Thrompon candidates Tashi Wangchuk and Deepen Ghallay both pitch cleaner, safer, smarter governance—especially reliable water, sanitation, drainage and disaster readiness—alongside more responsive public services and support for cross-border trade. WTO push: Bhutan has resumed WTO accession talks after more than 18 years, returning to the negotiating table with institutional and legal reforms highlighted. Regional energy cooperation: The EU launched a €5 million South Asia energy connectivity project covering Bhutan and neighbors, aiming to expand cross-border power trade and improve clean electricity access. Health & regulation: Bhutan tightens rules on tapentadol and nitrous oxide after reports of misuse, bringing them under stricter schedules with penalties for illegal possession and trafficking.

WTO Accession Restart: Bhutan has formally resumed World Trade Organisation accession talks after more than 18 years, with its delegation attending a 5th Working Party meeting in Geneva and citing reforms to modernise laws and strengthen institutions. Regional Power Push: The EU launched a €5 million “Energy Connectivity in South Asia” project in Kathmandu, aiming to boost cross-border electricity trade and cleaner, more reliable power for Bangladesh, Bhutan, India, Nepal and Sri Lanka. Thimphu Election Focus: Thrompon candidate Ugyen Dorji pledged full water coverage and better municipal service delivery, while Sonam Choden’s campaign highlights “basics and beautification” with priorities like waste management and cleaner streets. Phuentsholing Priorities: Candidates Tashi Wangchuk and Deepen Ghallay both centre their manifestos on safer water, stronger sanitation, disaster readiness and more responsive local governance. Student Support: Royal University of Bhutan proposes raising monthly stipends (from Nu 2,500) up to Nu 6,500 to match rising living costs. Drug Controls: Bhutan Food and Drug Authority tightened rules on tapentadol and nitrous oxide after reports of misuse, with penalties for illegal possession and trafficking. Local Safety & Services: Government says there are no plans to rebuild the Amochhu temporary shelter in Phuentsholing, citing flood and fire risks from deteriorating structures.

Thrompon Campaigns in Thimphu and Phuentsholing: Former Thimphu Thrompon Ugyen Dorji says his second-term push will focus on full water coverage, better municipal service delivery, and more inclusive, climate-resilient urban governance. In Phuentsholing, Tashi Wangchuk promises a cleaner, safer and smarter city with upgraded water systems, stronger sanitation and drainage, and faster responses to complaints, while Deepen Ghallay pledges inclusive governance, public participation, and a business-friendly approach to ease cross-border trade bottlenecks. Banking in the Region: For July 11 (second Saturday), India’s banks including SBI, HDFC and ICICI are closed, though digital banking and UPI continue. Cost of Living Support: Royal University of Bhutan proposes raising college stipends from Nu 2,500 to up to Nu 6,500 per month to better match rising prices. Public Health Regulation: Bhutan Food and Drug Authority tightens controls on Tapentadol and Nitrous Oxide after misuse concerns, with penalties for illegal possession and sale. Regional Energy Push: The EU launched a €5 million South Asia energy connectivity project in Kathmandu, covering Bhutan and aiming to expand cross-border electricity trade and renewable integration. Flood-risk Housing: Government says there are no plans to rebuild Phuentsholing’s Amochhu Temporary Shelter, citing flood and fire risks and its temporary COVID-era purpose. Trade and Connectivity Watch: Bangladesh moves toward CEPA talks with India to reduce trade imbalance, while Starlink bandwidth exports via Bangladesh could open a route for Nepal and Bhutan—pending local approvals.

EU–South Asia Power Links: The European Union launched a €5 million, four-year Energy Connectivity in South Asia project in Kathmandu, covering Bangladesh, Bhutan, India, Nepal and Sri Lanka, aiming to boost cross-border electricity trade, renewable integration and energy security. Digital Payments in the Region: At the SAARCFINANCE governors’ symposium in Paro, central bank leaders pushed for a multilateral South Asian digital payment network, noting Bhutan’s QR payments link with India and plans to expand connectivity. Cost of Living Pressure: Bhutan’s inflation hit 7.72% in May, with transport rising sharply and food costs climbing, adding to household strain. Student Support: The Royal University of Bhutan has proposed raising monthly stipends from Nu 2,500 to up to Nu 6,500 to match higher living costs. Drug Controls: Bhutan Food and Drug Authority tightened rules on Tapentadol and Nitrous Oxide after misuse reports, placing them under stricter schedules. Local Trade Disruption: Tsirang vegetable vendors say they’ve been trading in darkness every Sunday while awaiting proper market lighting. Gelephu AI Compute Push: Gelephu Mindfulness City Authority signed an LOI with Canadian SATO Technology to develop a hydro-powered AI data-centre campus, starting with 5 MW and potentially expanding to 500 MW.

Regional Energy & Connectivity: The EU launched a €5 million Energy Connectivity in South Asia (ECSA) project in Kathmandu, aiming to link power markets and expand cross-border electricity trade across Bangladesh, Bhutan, India, Nepal and Sri Lanka. South Asia Inflation Watch: The ADB cut Pakistan’s growth forecast to 3.7% and lifted inflation to 8.3%, warning of tariff risks from the US. Bhutan Energy Push: The ADB approved a USD 160 million loan to add at least 310 MW of solar in Bhutan, including a private-majority public-private partnership and new transmission links. Digital Infrastructure: Gelephu Mindfulness City signed an LOI with Canadian SATO Technologies to develop a hydro-powered AI data-centre campus, starting at 5 MW with a pathway to 100 MW (up to 500 MW). Trade & Payments: South Asian central banks backed a multilateral digital payment network; Bhutan’s QR payments with India’s UPI are highlighted as a base for wider connectivity. Cost of Living: Bhutan’s inflation hit 7.72% in May, with transport and food driving the rise. Urban & Services: Thrompon candidates in Phuentshogling and Thimphu focus on water supply and local development plans ahead of polling. Governance & Justice: Nepal’s Kathmandu District Court convicted key figures in the fake Bhutanese refugee scandal, with sentencing set for July 13. Research & Culture: APU assistant professor Dr Prem Taba won a SAARC research grant to study how museums in the region represent shared tribal heritage, including Bhutan’s National Museum in Paro. Environment: Gangtey-Phobji faces a growing waste disposal crisis as its landfill reaches full capacity.

Digital Infrastructure Deal: Bhutan’s Gelephu Mindfulness City Authority has signed a letter of intent with Canada’s SATO Technology to build a hydro-powered AI data-centre campus on the Bhutan–India border, reserving 100MW firm power (starting with 5MW, with a pathway up to 500MW) and aiming to finalise contracts within 12 months. Energy & Power Expansion: The Asian Development Bank approved a USD 160 million loan to scale Bhutan’s solar generation by deploying at least 310MW across three projects, including a private-majority public-private partnership and new transmission links. Education Finance Pressure: Bhutan’s Economic Stimulus Programme Education Loan Scheme is short on funds after 1,188 applications worth over Nu 1.1bn, but the government says all eligible applicants will be supported while it seeks additional financing. Local Governance & Water: With Thromde elections approaching, Phuentshogling candidates are campaigning on 24/7 safe drinking water and faster implementation of Local Area Plans. Environment Watch: In Gangtey-Phobji, a landfill has reached capacity as tourism grows, pushing waste disposal into temporary sites that are also running out of space. Regional Courts: Nepal’s Kathmandu District Court convicted senior figures in the fake Bhutanese refugee scam, with sentencing set for July 13.

AI Infrastructure & Investment: Canada-based Sato Technologies has signed a letter of intent to build a 100MW AI data centre in Bhutan’s Gelephu Mindfulness City, starting with 5MW and potentially expanding to 500MW, powered by Bhutan’s hydroelectric supply and aimed at serving AI demand across South Asia. Renewables Push: The Asian Development Bank approved a USD 160 million loan to add at least 310MW of solar in Bhutan, including projects in Bumthang and Lhuentse, with transmission upgrades and a private-majority public-private partnership model. Urban Water & Disaster Focus: As Thromde elections near, candidates in Phuentshogling and Thimphu are campaigning on practical issues like 24/7 safe drinking water, faster local area plan implementation, and stronger disaster management. Education Loan Funding Gap: Bhutan’s ESP Education Loan Scheme is short of funds after demand surged to 1,188 applications worth over Nu 1.1bn; the government says it will support all eligible applicants and seeks additional financing. Regional Connectivity: India and Indonesia agreed to link UPI with Indonesia’s payment system, a move that also signals wider cross-border digital cooperation that includes Bhutan among UPI-connected markets. Nepal Court Verdict in “Fake Bhutanese Refugee” Case: Nepal’s Kathmandu District Court convicted key figures, including former deputy prime minister Top Bahadur Rayamajhi and former home minister Bal Krishna Khand (as an accomplice), in the fake Bhutanese refugee scam, with sentencing set for July 13.

ADB Solar Push: The Asian Development Bank approved a USD 160 million loan to expand Bhutan’s solar power by at least 310 MW across three projects, with transmission works to connect farms to the national grid. Education Finance: Bhutan’s ESP Education Loan Scheme faces a funding gap after demand surged to over Nu 1.1bn, but the government says all eligible applicants will still be supported while it seeks additional funds. Thromde Elections (Thimphu): Ahead of Phuentshogling and Thimphu thrompon polls, candidates are campaigning on practical city issues, including water supply and safer pedestrian walkways. Local Development: Tsirang’s rural tourism momentum is starting to lift small businesses, with new market activity linked to the Gelephu Mindfulness City spillover. Flood Risk Planning: In Phuentsholing, authorities outlined long-term flood and landslide risk measures—land-use controls, early warning, sediment management, and resilient infrastructure—after vulnerability studies. Regional Connectivity: Bangladesh has cleared Starlink to export transborder connectivity, routing high-throughput internet backhaul toward markets including Bhutan and Nepal. Diaspora & Identity: A Bhutanese Hindu diaspora festival in Ohio highlights the community’s continued cultural ties and memories of exile. Court Update (Nepal): Nepal’s Kathmandu District Court convicted senior figures in the fake Bhutanese refugee scam, including former home minister Bal Krishna Khand (as an accomplice) and others, with sentencing set next.

Thromde Elections in Thimphu: As Phuentshogling and Thimphu thromde polls near, candidates are campaigning on practical city issues—Thimphu’s Thrompon hopefuls are promising better water supply and safer pedestrian walkways. Flood and Landslide Risk Management: Bhutan is laying out long-term plans for Phuentsholing after recurring disasters, including stronger hillside development rules, early warning, sediment management, and more resilient infrastructure. Gelephu Mindfulness City Ripple Effects: In Tsirang, small rural tourism and local markets are picking up momentum linked to GMC activity, with villagers reporting steadier daily income. Trade and WTO Path: Bhutan’s restart of WTO accession talks is framed as a post-LDC push to boost competitiveness and resilience through deeper global engagement. Energy and Infrastructure: The Gelephu–Tareythang road project is moving toward construction, with a detailed design push and World Bank funding cited. Finance and Gold Demand: Long queues at Thimphu’s Bhutan Duty Free Limited reflect falling global gold prices and growing interest in digital gold via TER. Regional Tech Links: India–Indonesia plan to integrate UPI for easier cross-border payments, with Bhutan mentioned as part of the wider connectivity conversation. Sports and Culture: Bhutan’s presence in regional bodybuilding and South Asian sporting ties continues, alongside tourism-focused discussions on tapping Thailand’s market potential.

Fake Refugee Case: A Kathmandu court convicted 23 people, including former deputy prime minister Top Bahadur Rayamajhi, former home minister Bal Krishna Khand and former home secretary Tek Narayan Pandey, in the “fake Bhutanese refugee” scam; seven were acquitted and the rest were found guilty of fraud, document forgery, crimes against the state and organized crime. Thimphu Thromde Elections: As Thimphu Thrompon polls near, candidates Sonam Choden and Ugyen Dorji are campaigning on priorities like better water connectivity and safer pedestrian walkways. Flood Risk in Phuentsholing: Government outlined long-term flood and landslide measures for Phuentsholing, including land-use controls, early warning upgrades, sediment management and resilient infrastructure. Gelephu–Tareythang Road: The Gelephu Mindfulness City-linked road project moved closer to construction, with the DPR due by year-end and tendering after. Gold Rush at Duty Free: Falling global gold prices are driving long queues at Bhutan Duty Free Limited in Thimphu, with demand also boosted by digital gold via TER. Earthquake Claims: Bhutan Insurance Limited reported 134 earthquake-related claims worth about Nu 5.34 million after the June 7 quake. WTO Accession: Bhutan’s restart of WTO accession is framed as a post-LDC push for competitiveness and resilience, with lessons on South-South cooperation. Sovereign AI Compute Link: SATO Technologies signed a letter of intent with Gelephu Mindfulness City Authority to develop a renewable-powered AI compute campus using reserved firm power.

E20 Fuel Row: India’s petroleum ministry says reports that Bhutan rejected an offer to buy E20 petrol are “incorrect,” after a Bhutanese outlet dispute over whether Indian OMCs proposed ethanol-blended supply. Disaster Response: Phuentsholing’s Amochhu Housing Colony flood left 41 families displaced; officials also say there will be no reconstruction of the flood-damaged temporary shelters, citing fire and flood hazards. Infrastructure Watch: The Gelephu–Tareythang road project is nearing construction, with the DPR due by year-end and a planned tendering phase next. Finance & Housing: Bhutan Development Bank revised lending rates, lifting some fixed rates while easing many floating loans; Bhutan Insurance reports Nu 5.34m in earthquake claims after the June 7 quake. Health & Social Policy: Bhutan Kidney Foundation spending has topped Nu 21m over 14 years; the Third Child Plus Programme is set to pay eligible families after verification. Governance & Integrity: A Thimphu regional meeting focused on measuring anti-corruption effectiveness beyond enforcement numbers. Energy Strategy: Bhutan reiterated it will prioritize green hydrogen over CNG for long-term transport fuel planning. Rural Livelihoods: Bhutan launched its first four registered GI products to protect heritage and boost rural incomes.

E20 Petrol Row: India’s Petroleum Ministry has again denied reports that Bhutan rejected an offer to buy E20 petrol from Indian oil companies, saying no formal export proposal was made—after Bhutanese editor Tenzing Lamsang posted a Department of Trade response raising storage and contamination concerns. Disaster Response: Floods in Phuentsholing displaced 41 families from the Amochu Housing Colony, with debris burying ground floors and halting an ongoing housing project; authorities also reiterated the Amochhu temporary shelter is not meant to be permanent, citing fire and flood hazards. Infrastructure Watch: The Gelephu–Tareythang road project has reached a key planning milestone, with the DPR due by year-end and construction expected mid-next year, aiming to cut travel time and protect wildlife habitats. Finance & Housing: Bhutan Development Bank and Bhutan Insurance have revised lending rates, shifting costs for fixed and floating loans; earthquake insurance claims after the June 7 quake total Nu 5.34 million. Health & Demography: Bhutan Kidney Foundation spending has topped Nu 21 million over 14 years as CKD support needs rise; PM Tshering Tobgay urged local leaders to push the Third Child Promotion Programme. Governance & Integrity: A Thimphu regional meeting on measuring anti-corruption effectiveness stressed that enforcement stats alone can’t capture integrity performance. Rural Livelihoods: Bhutan launched its first four registered GI products to protect heritage and boost rural incomes.

E20 Petrol Row: India’s Ministry of Petroleum and Natural Gas has rejected claims that Bhutan refused an E20 petrol offer, saying no Indian Oil Marketing Company ever proposed exporting E20 to Bhutan, after a Bhutanese outlet sparked the dispute. Anti-Corruption Focus: In Thimphu, Bhutan hosted regional talks on measuring the effectiveness of anti-corruption agencies, with experts warning that enforcement numbers alone can’t capture real integrity performance. Demography Push: PM Dasho Tshering Tobgay urged local leaders to promote the Third-Child Incentive Programme, offering Nu 10,000 per month for three years for eligible third (or higher) children. Energy Strategy: Bhutan reiterated it will prioritise green hydrogen over CNG long-term, citing the lack of domestic gas and the high cost of building an import and refuelling system. Education Reform: Bhutan plans a national teacher registration and professional certification framework, including a teaching licence requirement, under the Teaching Professionals Council. Flood Safety & Shelters: Government says the Amochhu Temporary Shelter in Phuentsholing was only a COVID emergency measure and will not be reconstructed due to fire and flood hazards. Green Growth & Heritage: Bhutan launched its first four registered GI products to protect heritage and support rural incomes. Monsoon Roads: New data shows monsoon road closures are lasting longer, with landslides and flash floods keeping highways shut for days.

Flood Response in Phuentsholing: Bhutan’s Amochhu Temporary Shelter will not be rebuilt after recent disasters, with officials citing fire and flood hazards and saying the COVID-era shelters were never meant to be permanent. Monsoon Disruptions: New data shows monsoon road closures are lasting longer than before, even as the number of blockages drops—meaning communities face longer cut-offs. Heritage Meets Markets: Bhutan has launched its first four registered Geographical Indication (GI) products—Bumthang Yathra, Bumthang Honey, Dhur-Tadingang Gontho, and Merak-Sakteng Zoetey—to protect authenticity and boost rural incomes. Rural Livelihoods & Inequality: A National Statistics Bureau study finds poorer households spend a higher share of their budgets on ritual activities, highlighting regressive pressure despite lower absolute spending. Sports & Regional Ties: Bhutan hosted South Asian bodybuilding and physique competition, framed as youth fitness and regional collaboration. Energy & Safety Debate: Government says flood risk in Phuentsholing is driven mainly by climate-linked landslides and intense rainfall, with some localized flooding tied to development activity. India–Bhutan E20 Fuel Row: India’s petroleum ministry denies reports that Bhutan rejected E20, insisting no export proposal was made—keeping the cross-border fuel debate alive. Crypto Watch: Bhutan-linked wallets reportedly moved 700 BTC to Binance as Bitcoin pushed above $62,000, drawing fresh market attention.

Bhutan Energy Security: The ADB has approved a $160 million loan to expand Bhutan’s solar capacity by 310MW, including 120MW Wobthang and 40MW Pedseling in Bumthang, plus a 150MW Dramthang project in Lhuentse via Bhutan’s first private-majority energy PPP, with Bhutan Power Corporation set to build 46km of transmission lines to the national grid—aimed at cutting winter electricity imports as hydropower output dips. Crypto Watch: Bhutan-linked wallets reportedly moved 700 BTC (about $43.75m) to Binance as Bitcoin reclaimed $62,000, though exchange deposits don’t always mean immediate selling; around 1,750 BTC is still said to remain under Bhutan control. E20 Fuel Fallout: Bhutan declined India’s E20 petrol offer, citing storage and stability concerns for ethanol-blended fuel on mountainous routes, while India’s E20 rollout faces wider debate over mileage and vehicle compatibility. Sports & Culture: Bhutan opened strongly at the 16th South Asian Bodybuilding and Physique Championships in Thimphu, winning multiple medals on day one, while South Asian Heritage Month celebrations at Silverstone featured a Bhangra performance.