AGP Executive Report

Energy Finance: ADB approved a $160m loan for Bhutan’s Solar Farm Expansion Project, targeting at least 310 MW of new solar capacity and grid modernization, with Wobthang (120 MW) and Pedseling (40 MW) in Bumthang plus Dramthang (150 MW) in Lhuentse via DGPC–Tata Power JV. Tourism & Trade Branding: Bhutan’s Phuentsholing gets a push to become a premier border destination as the government signs a contract for destination branding and a digital tourism platform under the Phuentsholing Thromde Enhancement Programme. Digital Payments (Cross-border): NPCI partnered with HSBC India and J.P. Morgan Payments to enable real-time FX settlement for overseas UPI transactions, supporting transparent INR amounts at checkout for cross-border users. Hospitality Skills: Phuentshogling hotel workers are being assessed and certified through Recognition of Prior Learning, aiming to standardize housekeeping, cooking, front office and food & beverage skills. Renewables Policy: Bhutan launched tax exemptions to accelerate renewable energy development, alongside broader entrepreneurship support via a National Entrepreneurship Strategy 2026. Agribusiness: A Bumthang entrepreneur is turning oats from cattle fodder into a health-food business, helping farmers shift to higher-value production. Climate Capacity: Bhutan’s first PhD batch in Climate Studies graduated from CNR, focusing on climate-resilient farming and food systems.

Bhutan Industry & Services: Bhutan’s hospitality workforce is getting more professional fast, with Phuentshogling hotel employees assessed and certified under Recognition of Prior Learning, targeting consistent housekeeping, cooking, front office and food & beverage standards. Climate & Skills: The first batch of Bhutan’s Climate Studies PhD scholars graduated from the College of Natural Resources, with research focused on climate-resilient farming and how climate change is reshaping food systems. Renewable & Energy Infrastructure: DGPC, BPC and Hyosung signed on to strengthen power infrastructure, pointing to continued upgrades in Bhutan’s electricity backbone. Heritage to Income: Bhutan launched its first four Geographical Indication products—Bumthang Yathra, Bumthang Honey, Dhur-Tandingang Gonthok and Merak-Sakteng Zoetey—to protect place-linked quality and improve producer earnings. Agriculture Markets: Tsirang farmers in Thakhorling Chiwog got a dedicated, disability-friendly vegetable market facility along the Tsirang-Sarpang highway, replacing makeshift stalls. Regional Trade Signals: India’s corn exports are set for a three-year high, and Bhutan is among buyers—good news for regional food supply chains. Cross-border Payments: NPCI partnered with HSBC India and J.P. Morgan Payments to enable real-time FX settlement for overseas UPI transactions, supporting smoother cross-border commerce. Entrepreneurship Push: Bhutan’s National Entrepreneurship Strategy 2026 aims to tackle scaling barriers for the private sector, including regulatory reform and access to finance.

Hospitality Skills Upgrade: Phuentshogling hotel staff are being assessed and certified under Recognition of Prior Learning, with nearly 60 workers from nine hotels tested in housekeeping, cooking, front office and food & beverage—aimed at raising service consistency. Climate Talent Pipeline: The first batch of Bhutanese PhD scholars in Climate Studies graduated from the College of Natural Resources, focusing on climate impacts on food systems and climate-resilient farming. GI for Rural Incomes: Bhutan launched its first four Geographical Indication products—Bumthang Yathra, Bumthang Honey, Dhur-Tandingang Gonthok (buckwheat flour) and Merak-Sakteng Zoetey (fermented yak cheese)—to protect heritage and improve producer earnings. Power Sector Capacity: DGPC, BPC and South Korea’s Hyosung signed a tripartite MoU to strengthen maintenance of Gas Insulated Switchgear, including spare parts supply plus training and certification for Bhutanese engineers. Mining Output Surge: Bhutan’s mineral production rose to about 12 million MT in 2025, with construction materials driving growth and policy reforms improving licensing and scientific mining. Renewables & Energy Support: Bhutan also moved to accelerate renewable energy via tax exemptions, while Bhutan’s entrepreneurship strategy targets scaling up private businesses beyond sole proprietorships and inactive licenses.

Bhutan Entrepreneurship Push: Bhutan launched its National Entrepreneurship Strategy 2026 to help startups scale, tackle inactive licenses, and improve access to finance, markets, and business support. Renewables Incentives: The Ministry of Finance started implementing Bhutan’s Renewable Energy Tax Exemption Act 2026, offering time-bound tax relief to cut project costs and speed up renewable capacity growth. Energy Grid Skills: DGPC, BPC and South Korea’s Hyosung signed a MoU to strengthen maintenance of GIS power equipment, including training and spare-part support. GI for Heritage Foods: Bhutan rolled out its first four Geographical Indication products—Bumthang Yathra, Bumthang Honey, Dhur-Tandingang Gonthok, and Merak-Sakteng Zoetey—to protect authenticity and raise producer incomes. Disaster-Ready Cities: A Phuentsholing geotechnical study is mapping safer areas for development as climate hazards intensify, while a Thimphu earthquake simulation flagged gaps in coordination, communications, and emergency logistics. Healthcare Expansion: KGUMSB plans a dedicated MBBS campus at Gidakom to expand medical training as Bhutan prepares its first home-trained doctors in 2028. Local Markets: Tsirang farmers in Thakorling Chiwog gained a dedicated, disability-friendly vegetable market facility along the Tsirang-Sarpang highway. Regional Trade Link: India revised fuel export duties from July 1 (petrol up, diesel and ATF down) and expanded exemptions that include Bhutan, shaping cross-border fuel flows. Power Sector Finance: BPCL agreed to buy a 40% stake in Tiki Tar and Shell India for ₹85 crore to expand value-added bitumen business, with exports including Nepal and Bhutan. Digital Payments Abroad: India’s UPI went live in Greece, adding to its global footprint that already includes Bhutan.

GI & Rural Livelihoods: Bhutan launched its first four Geographical Indication products—Bumthang Yathra, Bumthang Honey, Dhur-Tandingang Gonthok (buckwheat flour), and Merak-Sakteng Zoetey (fermented yak cheese)—aiming to protect heritage and lift producer incomes. Energy Infrastructure: DGPC, BPC and South Korea’s Hyosung Heavy Industries signed a tripartite MoU to strengthen maintenance of gas insulated switchgear and build local technical capacity. Renewables Policy: The Ministry of Finance began implementing Bhutan’s Renewable Energy Tax Exemption Act 2026, offering time-bound tax relief to cut project costs and attract investment toward 25GW renewables. Cost of Living: GST exemptions expanded for 31 everyday essentials, including key kitchen staples, with retroactive relief from the GST Amendment Act 2026. Disaster-Resilient Planning: A geotechnical study is guiding safer, climate-resilient urban growth in Phuentsholing amid intensifying landslide and flood risks. Health Education Expansion: KGUMSB plans a dedicated MBBS campus at Gidakom to expand medical training capacity as Bhutan prepares its first home-trained doctors in 2028. Local Governance & Inclusion: Thromde election nominations show strong women participation at grassroots level, but very low representation for top leadership roles. Mining Output: Total mineral production hit 12 million MT in 2025, with growth driven largely by construction materials and policy reforms. Flood Disruption: Heavy rain flooded parts of Phuentshogling, displacing 70+ families and damaging buildings under construction.

Lumbini Temple Build: Bhutan has officially started construction of a Nu.160 million temple complex in Lumbini, with a ground-breaking ceremony at the Sacred Garden and plans for an 80m x 80m site in the Western Monastic Zone, reinforcing Bhutan-Nepal Buddhist ties. Disaster Readiness: A full-scale earthquake simulation in Thimphu found gaps in emergency coordination, communication, command structures, medical preparedness, traffic management, and logistics—prompting calls for stronger training, equipment, and clearer reporting lines. Health Education Expansion: KGUMSB plans a new MBBS campus at Gidakom to support Bhutan’s first home-trained doctor batch in 2028, though student accommodation constraints remain a hurdle. Higher Ed Accreditation: RUB proposes reallocating Nu.52.002 million to speed up international programme accreditation for colleges, aiming to boost quality and global competitiveness. Local Governance & Women: Thromde elections show women making up about 40% of candidates for Tshogpa and Thrompon, but only one woman is running for Thrompon in the top executive role in Phuentshogling. Renewables Tax Push: The Ministry of Finance has begun implementing the Renewable Energy Tax Exemption Act 2026, offering time-bound tax relief to cut project costs and attract investment toward 25GW renewables. Cost of Living Relief: GST exemptions expanded to 31 everyday items mean businesses must stop charging the 5% GST on a wider list of household essentials, with retroactive effect from the bill’s passage. Phuentshogling Floods: Heavy rain caused flooding and roadblocks in Phuentshogling, displacing 70+ families and damaging homes and a canteen, with evacuations and machinery deployed for mitigation. Gelephu Tourism Investment: Gelephu Mindfulness City unveiled a tourism investment programme with 20 attractions and 20 activities, inviting private investors to shape a sustainable, high-value tourism economy. Economic Stimulus Progress: India has released over 83% of its Nu 15 billion commitment to Bhutan’s Economic Stimulus Programme, with the fifth tranche of Nu 2.5 billion bringing total disbursement to Nu 12.5bn. RIM Funding Request: RIM has asked to release Nu.43.3 million from its uncommitted 13th FYP budget to strengthen faculty capacity, expand professional education, and attract international students. Project 108 Momentum: Bhutan’s crowdfunded Project 108 in Gelephu has already secured funding for 90 of 108 chortens, with domestic crowdfunding closed and remaining funds to be raised internationally. Energy/Industry Link: BPCL’s planned acquisition of a 40% stake in Tiki Tar and Shell India for ₹85 crore targets India’s value-added bitumen market, with exports that include Nepal and Bhutan.

Renewables Push: Bhutan’s Ministry of Finance has started implementing the Renewable Energy Tax Exemption Act 2026, offering time-bound tax relief (customs duty, excise tax, GST on direct inputs, and POTT exemptions) to cut costs and speed renewable projects toward the 25GW goal. Cost of Living Relief: GST-registered businesses have been told to stop charging 5% GST on an expanded list of essentials after the GST Amendment Act 2026—covering key kitchen staples and disability-related welfare items—with relief applied retroactively. Energy Finance Spillover: India has released over 83% of its Nu 15bn Economic Stimulus Programme to Bhutan, with the latest fifth tranche of Nu 2.5bn bringing total disbursement to Nu 12.5bn, including support for fuel price smoothening and investments in agriculture, education, and digital transformation. Disaster Readiness: A major Thimphu earthquake simulation found gaps in coordination, communication, manpower, and rescue equipment, even as preparedness has improved—highlighting what Bhutan must fix before the next emergency. Flood Disruption: Heavy rain in Phuentshogling displaced 70+ families, damaged homes and a canteen, and submerged parts of the NHDCL colony, prompting evacuations and emergency machinery deployment. Public Health Infrastructure: Bhutan’s Royal Centre for Infectious Diseases in Thimphu is ready to operate next month, with an 80-bed capacity (100 in emergencies) and negative-pressure isolation for highly infectious cases. Tourism Investment: Gelephu Mindfulness City (GMC) unveiled a tourism investment programme with a pipeline of 20 attractions and 20 activities, inviting private investors to shape a high-value, sustainable destination. Regional Industry Link: BPCL plans to buy a 40% stake in Tiki Tar and Shell India for ₹85 crore, with the JV exporting to Nepal and Bhutan—an indirect signal for regional infrastructure materials demand. Security & Health Messaging: Bhutan renewed its call for stronger action against evolving drug threats, including synthetic drugs and new trafficking methods, alongside prevention and treatment support.

Energy & Investment: Bhutan’s push for power is getting a clear direction: the government is backing private investment to reach 10,000MW solar by 2030, while also accelerating onshore and offshore gas exploration and offering solar equipment and battery duty exemptions plus tax holidays until 2031. Public Health Infrastructure: Bhutan’s Royal Centre for Infectious Diseases in Thimphu is ready to start operations next month, with 80 beds (100 in emergencies) and a negative-pressure isolation unit, built with JICA support at a cost of over Nu 2.2bn. Regional Connectivity & Culture (Bhutan–Nepal): Construction has begun on the Bhutan Temple Complex in Lumbini, funded by the Royal Government of Bhutan at Nu 160m, expected to finish by 2028, alongside earlier steps for a Bhutanese monastery—strengthening cultural ties while supporting pilgrim infrastructure. Food & Agriculture Context in South Asia: While not Bhutan-specific, the week’s big regional signal is food security pressure: the World Bank approved $1.1bn for Bangladesh to stabilize fertilizer and emergency spending for rice seasons, underscoring how input shocks can ripple across Himalayan agriculture supply chains.

Energy & Investment: Bhutan’s energy policy is in focus as the government prioritises renewables (including solar targets and incentives) while also pushing domestic gas exploration to keep power supply stable. Public Health Infrastructure: Thimphu’s Royal Centre for Infectious Diseases is ready to start operations next month, with an 80-bed capacity and negative-pressure isolation for outbreak response. GST Relief for Daily Goods: Bhutan has expanded GST exemptions on essentials, including cooking oils, rice categories, sanitary napkins, salt and wheelchairs—retroactive to 18 May. India–Bhutan Economic Stimulus: India has handed over the fifth INR 250 crore tranche under Bhutan’s Economic Stimulus Programme, bringing total disbursed support to INR 1,250 crore. Regional Connectivity & Culture: Bhutan’s Bhutan Temple Complex construction has begun in Lumbini, funded by the Royal Government of Bhutan (Nu 160m), with a two-year build timeline aimed for 2028. Agriculture & Value Chains (Regional): Meghalaya unveiled a ₹295-crore expansion of its organic mission with women-led farming partnerships, signalling wider South Asia momentum for certified organic supply chains.

Bhutan-India Economic Stimulus: India handed over Bhutan’s fifth tranche of the Economic Stimulus Programme—Rs 250 crore—bringing total disbursed support to Rs 1,250 crore out of Rs 1,500 crore, with officials citing benefits for farmers, youth, SMEs, startups, and hospitality/tourism. GST Relief for Essentials: Bhutan’s GST Amendment Act 2026 expands exemptions for everyday items, including cooking oils and multiple rice categories, with retroactive implementation from 18 May and guidance to stop charging the 5% tax on the newly exempt list. Lumbini Monastery Works: Bhutan and Nepal began construction of a Bhutanese temple complex in Lumbini, with a site on an 80x80 metre plot and Bhutan-funded budget cited as Nu 160 million; a foundation stone ceremony also marked the start. Digital Culture Clash: Viral school bullying videos in Thimphu have triggered police and education probes, suspensions, and calls for digital responsibility, with the National Commission for Women and Children urging the public not to share footage. Regional Trade/Policy Watch: Separate coverage highlights how South Asia’s wider economic and strategic shifts are reshaping connectivity, trade, and crisis response planning across the region.

India–Bhutan Economic Stimulus: India handed over the fifth tranche of Rs 250 crore for Bhutan’s Economic Stimulus Programme, taking total disbursed support to Rs 1,250 crore out of Rs 1,500 crore, with officials citing benefits for farmers, youth, SMEs, startups, and hospitality/tourism. GST Relief for Essentials: Bhutan’s GST Amendment Act 2026 expands exemptions on everyday items, including cooking oils and multiple rice categories, with retroactive implementation from 18 May and guidance to stop charging 5% GST on the newly exempted list. Digital Safety in Schools: Viral bullying videos in Thimphu have triggered police and education probes, suspensions, and calls for stronger digital responsibility as social media challenges traditional values. Cultural Infrastructure: Bhutan’s monastery project in Lumbini moved forward as the foundation stone was laid, strengthening Bhutan–Nepal cultural and diplomatic ties. Regional Food Security Shock: The World Bank approved $1.1b emergency financing for Bangladesh to protect rice seasons by funding fertilizer imports and emergency support for vulnerable households and businesses amid global price volatility.

GST Relief for Essentials: Bhutan’s GST Amendment Act 2026 now exempts an expanded list of everyday items from the 5% tax, including cooking oils, multiple rice categories, sanitary napkins, salt, and automatic wheelchairs—retroactive to 18 May. India–Bhutan Economic Stimulus: India handed over the fifth tranche of INR 250 crore to Bhutan’s Economic Stimulus Programme, bringing total disbursed support to INR 1,250 crore out of INR 1,500 crore, with funding tied to farmers, youth, SMEs, startups, creative industries, and tourism. Digital Transformation Push: Bhutan’s State of the Nation report says the digital economy is creating jobs and income, highlighting the National Digital Identity system as a base for safer online services and transactions. Thimphu Urban Resilience: Thimphu’s Memorial Chorten stream corridor is set for revitalisation under a disaster-resilient infrastructure plan, with flood mitigation, greener public spaces, and solar-powered lighting. Social Media & Bullying: Viral school bullying videos in Thimphu sparked investigations and debate over youth behaviour and digital responsibility, with students suspended and footage removed. Health Support Spotlight: Cancer survivors in Thimphu credited community and family support for recovery during Cancer Survivors Month.

GST Relief for Essentials: Bhutan’s GST-registered businesses have stopped charging 5% tax on an expanded list of everyday items, including cooking oils, rice categories, sanitary napkins, salt and automatic wheelchairs—made retroactive from 18 May after the GST Amendment Act of 2026 received Royal Assent. India–Bhutan Economic Stimulus: India handed Bhutan the fifth tranche of INR 250 crore for the Economic Stimulus Programme, taking total disbursed support to INR 1,250 crore out of INR 1,500 crore, with the funds linked to farmers, youth, SMEs, startups, tourism and a fuel price smoothening framework. Digital Bhutan Update: Bhutan’s State of the Nation report says the digital economy is creating jobs and income, highlighting the National Digital Identity system and plans to expand digital transformation in 2026–27. Thimphu Urban Resilience: Thimphu Thromde is set to start work within a month on the Memorial Chorten stream corridor revitalisation, aiming to cut flood risk while improving walkways, public spaces and climate-resilient infrastructure. Bullying Goes Viral, Sparks Debate: Viral school bullying videos in Thimphu have triggered police and education probes and renewed discussion on youth behaviour and digital responsibility. HealthTech Win: AI health startup Artelus won India’s Drishti HealthTech Challenge and will receive an INR 35 lakh grant to co-develop and pilot its solution.

Bhutan-India Finance: India released the fifth tranche of ₹250 crore (Nu 2.5bn) to Bhutan’s Economic Stimulus Programme, bringing total ESP support to ₹1,250 crore, with the funds aimed at post-COVID recovery, jobs, and support for farmers, youth, SMEs, startups, creative industries, and tourism. Urban Resilience & Infrastructure: Thimphu Thromde moved ahead with the Memorial Chorten stream corridor revitalisation under the Disaster Resilient Infrastructure Project, targeting flood-risk reduction through greener public spaces, walking access, solar lighting, and improved pedestrian connectivity. Digital Transformation: Bhutan’s State of the Nation report says the digital economy is already creating jobs and income, highlighting progress on the National Digital Identity system and plans to expand digital-economy growth in 2026–27. Digital Society & Youth Safety: Viral bullying videos from a Thimphu school sparked police and education probes, student suspensions, and calls from the National Commission for Women and Children to stop sharing footage and rethink digital responsibility. Regional Trade & Connectivity: A study on Northeast India argues road and highway upgrades can shift the region from a “frontier” to a gateway linking India with Bangladesh, Bhutan, Myanmar and ASEAN by 2047—key for Bhutan-linked logistics routes. Circular Economy Investment: Recykal’s $23m funding round backs waste-management tech and international expansion, including faster rollout of deposit return systems that could inspire similar circular models.

India–Bhutan Finance: India released the fifth tranche of ₹250 crore under its Economic Stimulus Programme, taking total support to ₹1,250 crore (out of ₹1,500 crore), aimed at post-pandemic recovery, jobs, and key sectors. Bhutan Digital Push: Bhutan’s State of the Nation Report says the digital economy is already creating jobs (about 1,230 Bhutanese) and extra annual income for ICT, with the National Digital Identity system expanding secure online access to services. Digital Governance Audit: Bhutan’s RAA special audit flags procurement and planning failures in the Bhutan Integrated Taxation System (BITS 1.0), including direct award concerns and losses tied to the shift toward BITS 2.0/BIRMS. Population Risk: The State of the Nation Report warns outmigration and falling birth rates are becoming an “existential crisis,” even as GDP and investment momentum continue. Energy & Industry Signals (regional): Adani’s AGM roadmap points to major power expansion—45 GW target in five years, nuclear ambitions (10 GW by 2035), and a Bhutan hydropower partnership of 5,000 MW—highlighting how regional energy projects can shape Bhutan’s industrial outlook. Co-op Reform Context (regional): India’s cooperation reforms roadmap stresses tech adoption and measurable grassroots outcomes, a model that could influence how Bhutan’s cooperative and agrifood value chains scale. Circular Economy Investment (regional): Recykal raised $23 million to expand waste-management tech and Deposit Return System deployments, reinforcing the circular economy theme relevant to Bhutan’s waste-to-value goals. Domestic Revenue Outlook: Bhutan expects domestic revenue to rise nearly 10% next fiscal year, driven by GST rollout and higher dividends from state enterprises, with hydropower exports and tourism also supporting collections.

Bhutan Development & People: Bhutan’s “State of the Nation” warning flags outmigration and falling birth rates as an existential risk, even as GDP rises and hydropower, agriculture, tourism, education, healthcare and digital upgrades keep momentum. Tax & Digital Governance: A Royal Audit Authority special audit finds major procurement and planning weaknesses in Bhutan’s BITS 1.0 digital taxation system, including direct award of Nu. 610.11m without open bidding—raising transparency and value-for-money concerns. Trade & Business Climate: A Bhutan Chamber of Commerce and Industry review says businesses in Phuentsholing and Samtse face 54 regulatory and operational barriers, from licensing and GST frictions to skilled-worker shortages, finance access limits, land constraints and delays in service delivery. Disaster Readiness: Thimphu ran a full-scale earthquake simulation for a potential 7.5 quake, testing rescue, evacuation, hospital procedures and incident management across multiple sites. Domestic Revenue Outlook: Budget 2026-27 projects domestic revenue up nearly 10%, driven by GST and excise collections, higher dividends from Druk Holding & Investments, and stronger hydropower and trade receipts. Regional Industry Linkages: A study on Northeast India argues roads are no longer enough—fibre, data centres, cloud and AI could turn the region into a digital gateway linking India with Bhutan and ASEAN by 2047.