AGP Executive Report

Trade Links: Bhutan and India are exploring the Brahmaputra waterway and Jogighopa terminal as a route to global markets, with the Manas and Sankosh rivers also under discussion. Investment: Licensed and in-principle approved FDI projects total Nu 329.16 billion—65.8% of Bhutan’s Nu 500 billion target for 2029. The figure reflects approved project value, not money already invested. Digital Payments: More than 8,600 UPI transactions have gone through since September, but some payments still fail. Four more Indian banks, including SBI, are expected to join. Public Services: The Seventh Pay Commission began work on October 1, while the government has set aside about Nu 400 million to support low-voltage electricity users. Energy: Druk Green Power and Adani Power have agreed to develop the 770 MW Chamkharchhu-I hydropower project.

Trade and Connectivity: Bhutan and India are exploring inland waterways on the Brahmaputra, including Assam’s Jogighopa terminal, as another route for Bhutanese goods to reach global markets. Investment: Bhutan has secured licences and in-principle approvals for Nu 329.16 billion in FDI projects—65.8% of its Nu 500 billion target for 2029, though approvals do not mean the funds have been invested. Public Sector: The Seventh Pay Commission was constituted on October 1 to recommend changes to public servants’ salaries and benefits. Separately, the government has allocated about Nu 400 million to support low-voltage electricity users. Digital Payments: More than 8,600 UPI transactions have been completed since September, but some payments in India still fail as banks work on integration. Energy and Finance: Druk Green Power and Adani Power have agreed to develop the 770-megawatt Chamkharchhu-I hydropower project. DK Bank has also received in-principle approval to expand into Abu Dhabi. Regional Diplomacy: Nepal has endorsed Bhutan’s Sonam Tobgay for the post of SAARC secretary-general.

Regional Diplomacy: Nepal has endorsed Bhutan’s nominee, Sonam Tobgay, for SAARC secretary-general, with all member states reportedly agreeing to the appointment. Finance and Business: Bhutan has licensed or provisionally approved Nu 329.16 billion in foreign investment projects—about two-thirds of its Nu 500 billion target for 2029. DK Bank has also received in-principle approval to expand into Abu Dhabi. Cross-Border Payments: More than 8,600 UPI transactions have been completed since September, but Bhutanese users still face failures at some Indian merchants as banks work on integration. Public Services: The Seventh Pay Commission was constituted from October 1 to review public-sector salaries and benefits. The government has also allocated about Nu 400 million to support low-voltage electricity users. International Travel: A US visa policy report lists Bhutan among 19 countries facing a full suspension of visa issuance. Energy: Druk Green Power and Adani Power have agreed to develop the 770-megawatt Chamkharchhu-I hydropower project, while KEC International has secured an order for a 400-kilovolt transmission line in Bhutan.

Public Finance: Bhutan has constituted its Seventh Pay Commission, chaired by Druk Green Power Corporation managing director Chhewang Rinzin. The government also allocated Nu 400 million to support low-voltage electricity users. Investment: Licensed and in-principle-approved foreign investment projects total Nu 329.16 billion, or 65.8% of the Nu 500 billion target for 2029; the figure reflects approvals, not capital already invested. Digital Payments: Bhutanese users have completed 8,621 UPI transactions since September, but payment failures persist at some Indian merchants as banks work to complete integration. Business and Energy: Adani Power and Druk Green Power agreed to develop the 770-megawatt Chamkharchhu-I hydropower project, while KEC International won an order for a 400-kilovolt transmission line in Bhutan. Regional Diplomacy: Nepal endorsed Bhutan’s Sonam Tobgay for SAARC secretary-general, with all member states reported to support his appointment.

Energy: The government has allocated Nu 400 million this financial year to support low-voltage electricity consumers as it reviews domestic power tariffs. KEC International also won an order for a 400 kV transmission line in Bhutan, part of Rs 1,030 crore in new contracts. Regional Ties: Bhutan and India are seeking practical gains in trade, connectivity, education, tourism and health. At a maritime dialogue, officials also discussed using India’s waterways and the Jogighopa terminal to improve Bhutanese cargo access to global markets. Hydropower: Druk Green Power and Adani Power have agreed to develop the 770 MW Chamkharchhu-I project, a major addition to Bhutan’s hydropower pipeline. Finance: DK Bank has received in-principle approval to establish an Abu Dhabi subsidiary, but needs a final licence before it can operate there. Governance & Resilience: Bhutan is looking to strengthen anticipatory governance, while a new regional assessment with India, Nepal and Bangladesh identifies heat-preparedness gaps as El Niño raises the risk of extreme heat.

Infrastructure: KEC International’s new ₹1,030 crore order package includes a 400 kV transmission line in Bhutan, marking the company’s return to the market. Finance: DK Bank has won in-principle approval to establish an Abu Dhabi subsidiary offering financial services, but still needs a final licence. The move could connect Gelephu Mindfulness City with international investors. Regional Trade: At India’s Sagarmanthan dialogue, Bhutan and India discussed using National Waterway-2, the Jogighopa terminal and the Manas and Sankosh rivers to improve Bhutanese cargo access to global markets. Governance: A regional dialogue in Thimphu focused on helping governments anticipate technological, climate and economic shifts and prepare public institutions. Energy: Adani Power and Druk Green Power have agreed to develop the 770 MW Chamkharchhu-I hydropower project.

Finance: DK Bank has won in-principle approval to establish an Abu Dhabi subsidiary offering financial services, but must secure a final licence before it can operate. The bank says the move could connect Gelephu Mindfulness City with international investors. Diplomacy: US Ambassador Sergio Gor met Bhutan’s King and Prime Minister to discuss investment, innovation and cooperation, including opportunities linked to Gelephu. Trade Links: Bhutan and India discussed using National Waterway-2 and the Jogighopa terminal to move Bhutanese cargo to global markets, alongside maritime training. Governance: A regional dialogue in Thimphu urged governments to anticipate shifts in technology, climate and the economy and prepare public institutions in advance. Climate: Bhutan joined India, Nepal and Bangladesh in releasing assessments of heat risks and gaps in preparedness as El Niño raises concern about another severe heat season. Energy: Adani Power and Druk Green Power agreed to develop the 770MW Chamkharchhu-I hydropower project. KEC International also secured an order for a 400kV transmission line in Bhutan. Payments: Bhutan’s central bank signed an agreement with Cambodia’s National Bank to explore cross-border digital payments.

US-Bhutan Ties: US Ambassador Sergio Gor met King Jigme Khesar Namgyel Wangchuck and Prime Minister Tshering Tobgay to discuss investment, innovation and cooperation, including US engagement with Gelephu Mindfulness City. Finance: Bhutan-based DK Bank has received in-principle approval to establish an Abu Dhabi subsidiary for brokerage, custody, payments and advisory services. It must secure final regulatory permission before opening. Digital Payments: Bhutan’s Royal Monetary Authority and Cambodia’s central bank signed an agreement to develop cross-border payments, with both sides aiming to begin cooperation soon. Hydropower: Druk Green Power and Adani Power signed a shareholders’ agreement for the 770 MW Chamkharchhu-I project in Zhemgang. Construction is expected to start in the first half of 2027, with the project targeted to come online six years after work begins.

Digital Finance: Bhutan’s Royal Monetary Authority and Cambodia’s National Bank signed an MoU to develop cross-border payments, aiming to make digital transactions between the countries easier. Hydropower: Adani Power and Druk Green Power Corporation agreed to develop the 770 MW Chamkharchhu-I project in Zhemgang through a 49:51 partnership. Construction is expected to begin in the first half of 2027. Youth and Jobs: Pelsung marked its first anniversary after training nearly 1,000 young people, with participants already developing projects for Gelephu Mindfulness City, including a zero-waste initiative. Economic Outlook: The Asian Development Bank expects Bhutan’s growth to accelerate to 7.2% in 2027.

Hydropower Deal: Adani Power and Bhutan’s state utility Druk Green Power (DGPC) signed the Shareholders Agreement for the 770 MW Chamkharchhu-I hydropower project in Zhemgang, using a 49:51 equity split under a 30-year BOOT concession; construction is expected to start in the first half of 2027 with commissioning targeted within six years, aiming to meet Bhutan’s winter peak needs and export surplus power to India in summer. Regional Diplomacy: Nepal’s Home Minister Sudhan Gurung is set to visit New Delhi on Oct 12 for the inaugural BIMSTEC Home Ministers’ meeting (Oct 13), focusing on cross-border security cooperation including terrorism, transnational crime, and disasters. Policy & Health: Bhutan’s BFDA is pushing amendments to the Tobacco Control Act that would ban vaping products, tighten rules for minors, and explore an import-authorisation system for testing tobacco and nicotine products before approval. Education & Mobility: New Australian student visa rules are making many Bhutanese students rethink plans, especially due to limits on bringing partners or children. Culture & Community: A Thimphu train-the-trainer programme is bringing cricket coaching into monastic institutions, training monks and nuns to run regular sessions locally. Environment & Lifestyle: A study finds Himalayan monals are changing their calls in noisier areas, while a travel feature offers a “day in Thimphu” experience for visitors. Economy Snapshot: The Asian Productivity Organization released its 2026 Productivity Databook, including full productivity accounts for Bhutan and projections for Asia through 2035.

Hydropower Deal: Adani Power and Bhutan’s DGPC signed the Shareholders Agreement for the 770 MW Chamkharchhu-I hydropower project in Zhemgang, using a 49:51 equity split under a 30-year BOOT concession; construction is expected to start in the first half of 2027 with commissioning targeted within six years, aiming to meet Bhutan’s winter peak needs and export surplus power to India. Regional Security & Cooperation: Nepal’s Home Minister Sudhan Gurung will visit New Delhi for the inaugural BIMSTEC Home Ministers’ meeting on Oct 13, with discussions focused on cross-border security, transnational crime, and disaster/climate cooperation. Digital Governance: South Korea discussed AI-powered procurement with Asian partners at a Bhutan-hosted Asia-Pacific public e-procurement forum in Thimphu, highlighting intelligent, fair, and transparent procurement. Sports in Monasteries: Bhutan Cricket Council launched a train-the-trainer programme in Thimphu, training about 50 monks and nuns from 22 monasteries and six nunneries to run cricket sessions locally. Agriculture & Seeds: Bhutan is training SAARC experts in hybrid vegetable seed production in Yusipang, targeting tomato and chilli to cut reliance on imported seeds and improve farm resilience.

Hydropower Deal: Adani Power and Bhutan’s state-owned Druk Green Power Corporation (DGPC) signed a Shareholders Agreement for the 770 MW Chamkharchhu-I Hydroelectric Project in Zhemgang, using a 49:51 equity split and a 30-year BOOT concession; construction is expected to start in early 2027 with commissioning targeted within six years, aiming to meet Bhutan’s winter power needs and enable summer exports to India. Regional Security Diplomacy: Nepal’s Home Minister Sudhan Gurung will visit New Delhi on Oct 12–14 for the inaugural BIMSTEC Home Ministers’ meeting, focusing on cross-cutting security cooperation including terrorism, transnational crime, and disaster/climate coordination. Digital Cooperation in Asia-Pacific: Paro hosted PRF-26 discussions on strengthening digital infrastructure and online safety, with emphasis on data protection, cybersecurity, and digital inclusion alongside innovation. Bhutan Economy & Energy Outlook: The ADB projects Bhutan’s growth at 7.2% for 2027, supported by tourism and industry/electricity momentum, while agriculture remains weather-sensitive. Agriculture & Seeds: Bhutan is training SAARC experts in hybrid vegetable seed production (tomato and chilli) to reduce reliance on imported seeds and improve farm resilience.

BIMSTEC Security Talks: Bhutan’s Home Minister Sudan Gurung will travel to India next week for the first BIMSTEC home ministers’ meeting since 1997, expected to focus on cross-border security cooperation. WHO Leadership Race: Nepal is preparing to nominate Dr Sangeeta Kaushal Mishra for the WHO South-East Asia regional chief post after Saima Wazed’s resignation; Bhutan, Maldives and Sri Lanka are also expected to field candidates. Hydropower Investment: Druk Green Power Corporation signed an agreement with Tashi Group for the 40MW Parochhu hydropower project in Paro, with DGPC holding 51% and the private partner 49%. Bhutan’s Growth Outlook: The ADB projects Bhutan’s economy to grow 7.2% in 2027, supported by tourism and industry, while agriculture remains vulnerable. Seeds for Food Security: Bhutan is training SAARC experts to boost local hybrid vegetable seed production, aiming to cut reliance on imports. Gelephu Mindfulness City Debate: A new report revisits concerns around the Gelephu Mindfulness City plan, including claims about impacts on Nepali-speaking communities. Digital Payments Link: UPI is expanding again, with Zimbabwe in talks to adopt it; UPI is already operational in Bhutan. Tourism Access: Israel is set to add direct flights to Bhutan for winter 2027 group tours, highlighting Bhutan’s visitor fee policy. Local Livelihoods: A solar-powered lift irrigation project in Punakha is putting women at the centre of farming operations under a renewable energy programme.

Bhutan’s Growth Outlook: The ADB says Bhutan’s economy could accelerate to 7.2% growth in 2027, with tourism and stronger industry momentum helping offset higher energy costs and inflation. Women in Farming, Powered by Solar: In Punakha, the WERELIS project is installing solar-powered lift irrigation and putting women operators at the centre, cutting hours of manual water hauling. Innovation Push: Bhutan ranks 74th in the Global Innovation Index 2026, with officials urging the country to turn strengths like low-carbon energy and film output into more businesses and technologies. Project 108 Mobilisation: Preparations are underway for 108 Jangchub Chortens in Gelephu Mindfulness City, with thousands of volunteers and offerings converging on the November 1 build day. Community Funding via Archery: Trashigang’s Mega 7 Star archery tournament is drawing teams nationwide, with entry fees funding a new community hall. US Visa Bond Update (Bhutanese travellers): The US made a permanent visa bond for B-1/B-2 applicants from 50 countries, including Bhutan, requiring refundable deposits up to $20,000 after consular instructions. Bhutan Banking Leadership: Bhutan National Bank’s new CEO, Dorji Namgyal Rinchhen, says priorities include stronger governance, liquidity and service quality through branches and digital channels.

Vibrant Villages Programme: India’s border frontier push is shifting from “last villages” to “first villages,” with the Vibrant Villages Programme expanding development across its land borders in phased phases to tackle isolation and out-migration. Regional Energy Partnership: South Asian trade and business leaders urged Bangladesh, India, Nepal and Bhutan to build a regional energy hub to blunt geopolitical shocks and high import prices. Bhutan Tourism & Travel: Israel-linked direct flights to Bhutan are set for winter 2027, while Bhutanese travellers allege a Jaigaon agent scam involving fake tickets and airport detention. Bhutan Finance & Innovation: Bhutan’s Global Innovation Index 2026 ranking rose to 74th, but officials warn the gap between inputs and business outputs remains; meanwhile, Bhutan National Bank’s new CEO outlined priorities on governance, liquidity, and service quality. US Visa Bond Rule: The US expanded a visa bond requirement to 50 countries (up to $20,000), with India exempt but Bhutan included—raising fresh travel planning questions for affected nationals. UPI Growth: India’s UPI hit about 145 billion transactions in H1 FY27 (+27%), ahead of new MDR charges for high-value merchant payments. Climate & Safety in Bhutan: Research led by Newcastle University is modelling glacial lake outburst flood risks in Bhutan, including early warning approaches for remote communities near Thorthormi. Project 108 & Community Life: Bhutan’s Project 108 is mobilising tens of thousands to build 108 jangchub chortens in Gelephu Mindfulness City, and Trashigang’s archery tournament is turning entry fees into local community funding.

Gelephu Mindfulness City: Bhutan’s Ministry of Infrastructure and Transport has formally handed over the completed Gelephu Flood Protection Project, designed to protect four vulnerable river stretches in Sarpang as the city prepares for rapid growth. Health & Innovation: Druk Holding & Investments has partnered with the US-based Tower Council Foundation to build Bhutan’s “generational health” ecosystem, targeting research, clinical practice, diagnostics, women’s health, mental health and healthy ageing. Disaster Risk Research: Newcastle University-led work is modelling glacial lake outburst flood risks in Bhutan, using low-cost sensors and local knowledge to support early warning for remote communities near Lunana and Thorthormi Lake. Tourism & Hospitality: Seven Bhutanese hotels will represent the country at the South Asian Travel Awards in the Maldives, after June evaluations by an international jury. Innovation Ranking: Bhutan placed 74th in the Global Innovation Index 2026, with strengths in filmmaking and low-carbon energy, but gaps flagged in business sophistication and knowledge/technology outputs. Education & Monastic Skills: Bhutan’s Central Monastic Body launched a Monastic Institute for Language Studies in Wangdue Phodrang to help monks learn languages like English and Chinese for wider engagement and Buddhist outreach. US Visa Policy Watch: Bhutan is listed among countries covered by the US $10,000–$20,000 visa bond rule for B1/B2 applicants, with the bond amount set during the visa interview.