The New agreement on Trade, Commerce and Transit between India and Bhutan
has come into force with effect from July 29. The agreement between the two
neighbouring countries for extending the trade agreement was signed last year.
It was decided that the agreement will come into force at a mutually agreed
date. The date has now been decided by the leadership of both the countries as
The bilateral trade relations between India and Bhutan are governed by the
Agreement on Trade, Commerce and Transit between the Government of India and
Bhutan. The Agreement provides for a free trade regime between the territories
of India and Bhutan. The Agreement also provides for duty free transit of
Bhutanese merchandise for trade with third countries.
The Agreement was last renewed on 29th July 2006 for a period of ten years.
The validity of this Agreement was extended, with effect from 29th July 2016,
for a period of one year or till the new agreement comes into force, through
exchange of Diplomatic notes.
The new Agreement on Trade, Commerce and Transit Agreement was signed on
12th November 2016 by the Minister of State (IC), Ministry of Commerce and
Industry on behalf of the Government of India during her visit to Bhutan on
11th-13th November, 2016. As per its provisions, the new Agreement was to come
into force on a mutually decided date. As agreed to by India and Bhutan, the
new Agreement on Trade, Commerce and Transit between India and Bhutan has come
into force with effect from 29th July 2017.
The new Agreement will further strengthen the bilateral trade relations
between India and Bhutan.