AGP Executive Report

Air Connectivity for Bhutan: Air India and Drukair have signed an interline partnership, letting passengers book one ticket across both networks with coordinated baggage transfers via Delhi’s hub—boosting smoother travel to Paro and onward Bhutan routes like Bumthang, Gelephu and Yonphula. Digital Payments, Cross-Border: Bank of Baroda launched “UPI Global Reverse Acceptance,” enabling eligible international visitors (including from Bhutan) to pay Indian merchants by scanning UPI QR codes using their home-country payment apps—no Indian account needed. Bhutan Economy Watch: Bhutan’s growth is projected at 6.21% for 2026 as private investment, energy projects and tourism offset slower hydropower and weaker government construction. Foreign Investment Beyond Hydropower: FDI approvals rose to 21 projects last fiscal year, with 19 outside hydropower, led by manufacturing and services—signalling gradual diversification. Regional Policy & People: Bhutan proposes Dasho Sonam Topgay as its next SAARC Secretary General, with a possible discussion at a Sept 25 meeting in New York. Thimphu Startup Push: Nearly 100 global entrepreneurs and investors gathered in Thimphu for EASY Residency’s “The Convergence,” with focus on cross-border payments, fintech and AI. Public Finance for Children: A regional exchange in the Philippines shared child-responsive budgeting tools with Bhutan among other countries. Governance & Accountability: Bhutan’s Royal Audit Authority adopted a results-oriented 2026–27 operational plan, stressing measurable performance, digital transformation and stronger audit impact.

Nature Tourism Push: Bhutan is flagging six biodiversity-rich sites as flagship nature-based tourism destinations, aiming to fund conservation long-term while creating local livelihoods. Regional Diplomacy: Bhutan has proposed Dasho Sonam Topgay as its next SAARC Secretary General, with member states expected to discuss the nomination at a Sept 25 meeting in New York. Economic Outlook: Bhutan’s 2026 growth projection is trimmed to 6.21%, with private investment, energy projects and tourism expected to offset slower hydropower and weaker government construction. Tourism & Connectivity: Pakistan and Nepal, in a parliamentary friendship group meeting in Islamabad that also included Bhutan, urged restoring direct flights to boost trade, tourism and people-to-people links. Consumer Watch: Bhutan’s Competition and Consumer Affairs Authority recovered about Nu. 2.79M for consumers as refund and delivery complaints rose, with Thimphu accounting for most cases. Early Childhood Education: BECEDA, set up in 2024 under BCCI, is bringing private ECCD providers together to improve educator training and early learning standards. Culture & Migration: A new Dzongkha song, “Bhuchung Amai Chey Chey,” is resonating with Bhutanese abroad by spotlighting family separation and a mother’s bond. Sports: Paro FC Women lead Bhutan’s National League after three straight wins, including a 9-0 victory over Ugyen Academy.

Digital Payments Milestone: India marked 10 years of UPI, launched on Aug 25, 2016, with Prime Minister Narendra Modi calling it a “major turning point” and citing growth from 1.78 crore transactions in FY2016-17 to 24,162 crore in FY2025-26, and value rising to about Rs 314 lakh crore—plus UPI’s expansion to 11 countries including Bhutan. Consumer Protection: Bhutan’s Competition and Consumer Affairs Authority recovered Nu. 2.789 million for consumers as complaints rose, with refund denials topping unfair trade practices and Thimphu recording the most cases. Gender & Online Safety: UNFPA and RENEW warn Bhutan’s systems are not fully ready for technology-facilitated gender-based violence, including cyberbullying, sextortion and AI deepfakes, with gaps in coordination and reporting. Parliament Watch: Bhutan’s National Assembly elected Opposition MP Tempa Dorji as Speaker in a 24-23 vote, after the Speaker-elect election drew questions about ruling-party cohesion. Local Elections Access: Only 653 women (17.6%) of 3,696 candidates registered for the revised FLT, raising concerns the new requirements may discourage women from grassroots politics. Sports: Paro FC Women lead Bhutan’s National League after three straight wins, including a 9-0 victory, while Tsirang Women also start perfectly in their championship league.

Bhutan-India Healthcare: An Indian Medical Value Travel visit in Thimphu explored expanding Bhutan’s medical referral network, with hopes that 10 more Indian hospitals will join the system—widening specialized treatment options for Bhutanese patients. Local Politics & Gender: Bhutan’s revised Functional Literacy and Possession of Skills Test (FLT) for Local Government Elections 2027 has registered 3,696 candidates, but only 653 women (17.6%), raising concerns the new competency requirement may discourage women unless training and support keep pace. Digital Safety: UNFPA and RENEW’s rapid assessment warns Bhutan’s fast digital shift is bringing more technology-facilitated gender-based violence, including cyberbullying, sextortion and AI deepfakes, while coordination and technical capacity lag behind. Crafts & Tourism Pressure: A Competition and Consumer Affairs Authority study says Bhutan’s craft retail sector is stable but squeezed by imported products, weak quality certification and heavy tourism dependence—threatening authenticity and consumer trust. Economy Watch: Bhutan’s external imbalance is expected to worsen sharply in FY2026-27, with the current account deficit projected to widen to 23.4% of GDP, even as fiscal conditions remain comparatively steadier. Regional Context: India’s UPI celebrates 10 years and is now operational in Bhutan among other countries, underscoring growing cross-border digital payments links.

Gender-Based Violence Online: UNFPA’s Rapid Assessment warns Bhutan’s fast digital shift is creating new tech-enabled harms, from cyberbullying and image-based abuse to sextortion and deepfakes, with gaps in coordination, data systems, and technical capacity making responses harder. Parliament Watch: In a historic one-vote Speaker election, Opposition MP Tempa Dorji (BTP) defeated ruling PDP Health Minister Tandin Wangchuk 24–23, raising questions about PDP cohesion and parliamentary discipline despite its seat majority. Healthcare Links: Bhutan and India are set to deepen the medical referral network, with plans for about 10 additional Indian hospitals to join, expanding specialized treatment options for Bhutanese patients. External Pressures: Bhutan’s current account deficit is projected to widen to 23.4% of GDP in FY2026-27, even as fiscal conditions look comparatively steadier—signalling rising import and external financing strain. Craft & Trade: A new study flags pressure on Bhutan’s craft retail from imports, weak quality certification, and tourism dependence, urging stronger market transparency and consumer trust. Local Governance Prep: 3,696 candidates registered for the revised competency-based FLT for the 2027 local elections, but many still feel uncertain about what to expect.

Parliament Watch: Bhutan’s democratic momentum got a jolt as the National Assembly elected Opposition nominee Tempa Dorji as Speaker, beating the ruling PDP’s choice—an inside-parliament reminder that MPs can cross party lines. Business & Trade Climate: MoICE’s Business Regulatory Process Review flagged recurring pain points for firms: GST cascading, licensing delays, weak access to finance, labour shortages, and border bottlenecks—plus traders’ ongoing difficulty getting Indian rupees. Cyber Skills for Bhutan: Bhutan is training over 90 ICT professionals in a btNOG workshop to strengthen “defence in depth” against fast-evolving cyber threats, including AI-driven attacks. Digital Economy & Payments: Binance Pay is expanding crypto payments to 3,700 Bhutan merchants, adding another channel for everyday transactions. Youth & STEM: A Bhutanese class 11 student, Chimi Cheki Yangzom, has been selected for India’s all-female lunar satellite mission ShakthiSAT, starting an eight-day hands-on programme in Delhi. Local Tourism Spillover: In Thimphu’s Genye, matsutake income is spreading into tourism and local business through a Matsutake Festival that draws visitors beyond the sale itself.

Bhutan’s Digital Defenders: Bhutan is training more than 90 ICT professionals and network engineers in a five-day btNOG workshop, focusing on how to spot and respond to fast-evolving cyber threats, including AI-driven attacks. Local Livelihoods & Tourism: In Thimphu’s Genye, matsutake season is turning into more than mushroom cash—festival activities and visitor interest are spreading benefits to local businesses and the wider community. Parliament Watch: Bhutan made a rare political shift on 19 August, as Opposition nominee Tempa Dorji won the Speaker election by one vote with support from eight PDP MPs, reshaping parliamentary expectations. Space for Bhutan: A 17-year-old Bhutanese student, Chimi Cheki Yangzom, has been selected for India’s all-female lunar satellite mission ShakthiSAT, heading to Delhi for hands-on training. Regional Sports: The 14th South Asian Games will be held in Pakistan from April 3–11, 2027, with Bhutan among the participating nations. Water Snapshot: A global ranking places Bhutan at 3.5M cubic feet of renewable freshwater per person, highlighting how water abundance and water use can tell very different stories.

Siliguri Security Push: Home Minister Amit Shah ordered agencies to expand their presence in the Siliguri corridor, calling it a key “Chicken’s Neck” link for India’s Northeast and directing steps to keep it free of encroachments and curb illegal immigration, while also backing a “triangular security grid” with new garrisons and tighter coordination among BSF, SSB and intelligence. Darjeeling Politics: Shah’s Siliguri visit also points to renewed focus on a “permanent political solution” for the Darjeeling hills, with meetings expected with local leaders. Bhutan-Linked Finance & Trade: India’s eased FDI rules are already drawing investment—₹4,895.65 crore across 29 proposals—after allowing overseas firms with up to 10% Chinese shareholding to use the automatic route, and DGFT changes now let exporters invoice and receive overseas payments in rupees (with rupee proceeds counting toward export obligations). Energy in the Region: India and Mauritius signed a five-year oil and gas supply deal, with Indian Oil to meet Mauritius’ full petrol, diesel and aviation fuel needs—another sign of India’s growing energy-security footprint. Bhutan in the Spotlight: Bhutan’s political week saw Opposition nominee Tempa Dorji become Speaker-elect by a single vote, while Bhutan also featured in regional sports coverage after Indian youth boxers won gold at a championship held in Bhutan.

Bhutan Politics: Bhutan made a rare parliamentary turn as Opposition nominee Tempa Dorji defeated Health Minister Tandin Wangchuk for Speaker by one vote, with the Health Minister denying he ever resigned and pointing to eight PDP MPs for the loss. Bhutan Finance & Business: The Bhutan Chamber of Commerce and Industry flags “collateral trap” and high lending rates as key barriers to business growth, saying young entrepreneurs struggle to secure loans without land or property. Bhutan Crypto & Payments: Bhutan transferred 490 BTC as Bitcoin prices climbed, underscoring how crypto inflows are reaching local merchants and payment systems. India–Mauritius Energy: India and Mauritius signed a five-year oil and gas deal as Indian Oil will supply Mauritius’ full petrol, diesel and aviation fuel needs, aiming to cut fuel price volatility. India FDI & Trade Rules: India reported about ₹4,895 crore in new FDI proposals after easing rules for overseas firms with up to 10% Chinese shareholding, and also moved to let exporters receive payments in rupees while keeping export benefits. India Border Security: Amit Shah announced a triangular security grid for the Siliguri Corridor and accused West Bengal’s previous leadership of delaying land for border fencing, as he reviewed SSB/BSF infrastructure and coordination.

Bhutan Crypto Watch: The Royal Government of Bhutan moved 490.87 BTC (about $32.74M) to fresh wallets, with the biggest transfer at 485 BTC (~$32.31M). Blockchain trackers say the new destinations are not clearly identified as exchanges, so it doesn’t automatically confirm a sale—though it has revived market jitters as Bitcoin rallied above $75,000. Bhutan Politics: Bhutan’s Speaker election made history on 19 August 2026, with Opposition nominee Tempa Dorji winning by one vote after support from eight PDP MPs—an unusual shift in Bhutan’s parliamentary dynamics. Bhutan Economy & Finance: A Bhutan Chamber of Commerce and Industry review flags “collateral traps” and high lending rates as major barriers to business credit, especially for entrepreneurs without land or fixed assets. Regional Energy Links: India’s IOCL signed a five-year fuel supply deal with Mauritius, promising to meet the island’s full petrol, diesel and aviation fuel needs—another sign of India’s expanding energy footprint that also matters for regional partners like Bhutan. Border Security (India): Amit Shah announced a triangular security grid for the Siliguri Corridor, citing coordination among BSF/SSB and fencing progress—relevant to Bhutan’s border region through shared connectivity.

Bhutan Crypto Watch: The Royal Government of Bhutan moved 490.87 BTC (about $32.74m) to fresh wallets, with a single 485 BTC transfer worth roughly $32.31m—raising market chatter about possible selling, though blockchain trackers say the new destinations are not confirmed exchanges. India–Trade Policy: India’s DGFT amended the Foreign Trade Policy to let eligible exporters invoice overseas sales and receive payments in Indian rupees (for most destinations), keeping FTP benefits and export-obligation counts—part of a push to reduce dollar dependence. India–FDI Rules: India reported 29 FDI proposals worth about ₹4,895.65 crore after easing rules for overseas firms with up to 10% Chinese shareholding to invest via the automatic route. Border Security: Union Home Minister Amit Shah announced a “triangular grid” security plan around the Siliguri Corridor (“Chicken’s Neck”) and accused Mamata Banerjee of delaying land for India–Bangladesh border fencing. Regional Security Lens: Ex-Army chief Manoj Naravane said Pakistan is India’s immediate threat, while China is the long-term main competitor across politics, economics, trade and the military. Business Finance: Bhutan’s business community flagged “collateral traps” and high lending rates as key barriers to credit access.

Rupee Trade Push: India’s DGFT has eased Foreign Trade Policy rules so exporters can invoice overseas sales in Indian rupees (or foreign currency) and receive eligible rupee payments via approved banking channels—bringing them on par with foreign-currency earnings for trade-policy benefits, with separate provisions for ACU countries and special handling for Nepal and Bhutan. Renewables Deal: Druk Green Power Corp (DGPC) and Hira Power & Steel Ltd (HPSL) signed an MoU to explore joint solar project development in Bhutan, building on an earlier EoI for a 500 MW solar PV project. Healthcare Link: Ten more Indian hospitals are expected to join Bhutan’s Medical Referral System, expanding options for Bhutanese patients seeking specialised care in India. Jobs Matchmaking: Bhutan’s YaY-Gokab event brought employers and jobseekers together to tackle private-sector hiring gaps and the “no way in” problem for fresh graduates. Civil Service Update: Bhutan’s RCSC reported fewer candidates for the Main Examination after Preliminary results—about 1,300 cleared PE, with the Main exam set for 1–3 October. Digital Planning: Bhutan launched Zhichar, a national digital system for building records, land-use plans, emergency shelters and infrastructure to support faster planning and service delivery.

Customs Modernisation: Homeland Security and Technology Minister Ali Ihusan says customs must go beyond revenue and border control, pushing digital systems, advance data, risk management and the National Single Window to keep regional corridors moving. Trade in Rupees: India eased Foreign Trade Policy rules so exporters can invoice overseas sales and receive payments in Indian rupees (with separate provisions for ACU members, and special rules for Nepal and Bhutan), aiming to widen rupee settlement beyond dollar dependence. Bhutan Jobs Link-Up: YaY-Gokab brought employers and jobseekers together after the Department of Employment and Entrepreneurship started calling registered candidates one by one to match real needs. Civil Service Pipeline: RCSC declared BCSE 2026 PE results: about 1,383 cleared, down from last year, with the Main Examination set for 1–3 October for 700+ vacancies. Digital Land Records: Bhutan’s Department of Human Settlement launched Zhichar, a national system for building records, land-use plans and emergency shelters to support planning and faster service delivery. Gelephu Momentum: Coverage highlights Gelephu Mindfulness City and the planned Gelephu International Airport as a southern Bhutan growth and connectivity push. Solar Partnership: DGPC and HPSL signed an MoU to explore joint development of solar projects, building on an earlier 500 MW proposal. Opposition Speaker: Tempa Dorji made history as Bhutan’s first opposition Speaker, winning the National Assembly vote after Lungten Dorji’s resignation. Healthcare Referral Expansion: Ten more Indian hospitals are expected to join Bhutan’s Medical Referral System, expanding options for specialised care.

Gelephu Mindfulness City & connectivity: Bhutan’s Gelephu push is getting a major boost with plans for Gelephu International Airport, slated to open in 2029 and initially handle 1.3 million passengers a year, with capacity upgrades envisioned up to 5.5mppa by 2065—positioned as a key enabler for the Gelephu Mindfulness City Special Administrative Region and its links to India’s eastern integration goals. Political shake-up in Thimphu: Bhutan’s National Assembly has elected opposition MP Tempa Dorji as Speaker, breaking the last three terms’ ruling-party pattern; he won by one vote (24–23) after the resignation of former Speaker Lungten Dorji, a result that could test unity inside the ruling PDP. Foreign reserves under pressure: Bhutan’s foreign currency reserves fell by about USD 31 million between June and July to USD 1.19 billion, with rising import costs—especially fuel—cited as the main strain, though officials say reserves remain well above the critical threshold. Trade & regional diplomacy: Bangladesh and Bhutan agreed to deepen bilateral trade, expand product coverage under the PTA, and explore a future free-trade pact, while also pushing to revitalise SAARC for wider regional integration. Energy & skills for the future: Bhutan’s solar workforce gets a lift as Cleantech Industry Resources (CIR) trains Bhutan’s next generation of solar engineers in PV modeling under the STAR-C initiative. Sports governance: SAFF football is set for Nov 4–17 in Dhaka with five rest days, and Bhutan is listed in Group A.

Parliament Watch: Tempa Dorji has made history by becoming Bhutan’s first opposition Speaker of the National Assembly, winning 24 votes to Tandin Wangchuk’s 23 after the resignation of Lungten Dorji—an outcome that signals political pressure for the Tobgay government. Tourism Recognition: MICE Bhutan CEO Lizam Dorji was named PATA Face of the Future 2026 Grand Winner in Kuching, highlighting Bhutan’s push to grow tourism through sustainable, professional MICE leadership. Border & Trade: Long queues of trucks at Banglabandha land port show how trade growth is also bringing fresh suffering, with drivers reporting delays as BSF verifies documents for cargo heading to India, Nepal and Bhutan. Economy & Reserves: Bhutan’s foreign reserves fell about USD 31 million to USD 1.19 billion between June and July, driven by higher import and fuel costs, though officials say the level remains well above the critical threshold. Private Sector Policy: The Bhutan Chamber of Commerce and Industry is urging amendments to the Tenancy Act 2015, saying current notice rules are too short for commercial tenants and create investment uncertainty. Tourism Access: From September, the 24-hour SDF waiver for regional tourists will expand beyond Rinchending to include Milarepa Lhakhang and the Pachu Community Ecotourism Site, with approved packages and licensed guides. Sports: RTC Women FC opened its AFC Women’s Champions League campaign with a 1-1 draw against Banaat FC, with Bhutan’s women’s side now set for matches against PFC Nasaf and Master FC.

One-Stop Shop for villages: Bhutan’s Ministry of Cooperation is pushing Primary Agricultural Credit Societies (PACS) to become “One Stop Shop” hubs, so farmers and rural citizens can access government services, welfare schemes, training and market linkages through a single village network, with pilot mapping before scaling up. Foreign reserves under strain: Finance Minister Lekey Dorji said foreign currency reserves fell about USD 31 million to USD 1.19 billion in June–July as import costs—especially fuel—rose, though reserves remain well above the USD 464 million threshold. Tourism leadership recognised: MICE Bhutan CEO Lizam Dorji was named PATA Face of the Future 2026 Grand Winner in Kuching, highlighting Bhutan’s push to grow tourism while keeping sustainability at the core. Border-town tourism access: From September, regional visitors using Bhutan’s 24-hour SDF waiver can travel beyond Rinchending to Milarepa Lhakhang and the Pachu Community Ecotourism Site via approved packages and licensed guides. Local governance pipeline: The Election Commission reported 3,696 candidates registered for upcoming local government polls, but women remain underrepresented at 17.6%. Trade talks with Bangladesh: Bhutan and Bangladesh agreed to deepen trade and expand PTA product coverage, while exploring a future free-trade agreement and renewed SAARC cooperation. Finance for borrowers: RICB launched Special Rebate Scheme 2.0 to help clear legacy non-performing loans, offering interest and, in some cases, principal rebates for eligible borrowers.