AGP Executive Report

FDI & jobs push: Bhutan’s State of the Nation agenda for FY 2026–27 targets Nu. 3.5bn in foreign direct investment, digital expansion, stronger agro-processing, and 5,500 youth jobs, with plans for new startups and industries beyond Thimphu. Digital industry building: The Tech Solutions Connect Forum in Thimphu showcased locally developed cybersecurity, POS, robotics and software, while a separate IT Readiness push helped 184 three-star hotels improve online booking and visibility. Insurance market pause: The RMA imposed a six-month moratorium on new insurance company licensing as regulatory reforms and legislative reviews continue. Tax deal for investors: Parliament adopted a Double Taxation Avoidance Agreement with Singapore, aimed at boosting investor confidence for Gelephu Mindfulness City. Entrepreneurship & licensing reform: A National Entrepreneurship Strategy 2026 aims to cut business licence timelines to three working days and improve access to finance and market reach. Power & tariffs: Government says it will keep domestic power affordability in focus as tariff proposals face review. Agriculture incentive: Tax concessions are encouraging farmers in Monggar to revive fallow land for cardamom cultivation. Corporate dividends: Listed companies’ FY2025 dividend payouts show a mixed picture, with some sectors rewarding shareholders while others hold back. Skills for events: Bhutan held its first formal live sound training to strengthen technical capacity for the growing creative and events sector. Circular economy funding: Waste-tech startup Recykal raised $23m to scale deposit return systems and expand internationally. Tourism gateway upgrades: Phuentshogling is getting tourism branding and digital media tools to position it as a clean, safe entry destination. Risk & resilience: Earthquake insurance claims total 128 as recovery costs mount. Safety & compliance watch: Calls for stricter adventure tourism safety regulations follow recent fatal incidents abroad.

Business Licensing Reform: Bhutan’s National Entrepreneurship Strategy 2026 aims to cut business licence approval time to within three working days, while boosting access to finance and market reach for startups. Innovation for Gelephu: Pelsups pitched 30 ideas for Gelephu Mindfulness City, including bamboo nursery and plantation plans to reduce imports, plus an emergency alert app concept. Waste & Circular Economy Funding: Recykal raised $23m to expand its waste management and deposit return system, using the funds for tech upgrades and faster DRS deployment. Hydropower & Energy Outlook: DGPC highlights Bhutan’s hydropower role in meeting domestic demand and exporting power to India, with plans to scale capacity to support rising needs. Tourism Gateway Upgrade: Phuentshogling is set to get tourism branding and digital media tools to strengthen its position as a clean, safe commercial and cultural gateway. Agrifood Investment: HiHi targets USD 97.69m to transform Bhutan’s agrifood sector, improve self-sufficiency, and open export opportunities. Digital Skills Push: Youth Tech-Novation Hackathon 2026 showcased digital solutions, training 900+ youth through youth centres and colleges.

Business Licensing Push: Bhutan’s National Entrepreneurship Strategy 2026 aims to cut business licence approval time to within three working days, while boosting access to finance and market reach for startups and small firms. Gelephu Innovation & Waste-to-Value: Pelsups from the Pelsung programme pitched ideas for Gelephu Mindfulness City, including bamboo nursery and plantation plans to reduce imports and create rural income, plus app-based emergency alert concepts. Tourism Gateway Branding: Phuentshogling is set to get tourism branding and digital media tools under the Phuentshogling Thromde Enhancement Programme, including a dedicated visitor website to support local businesses and smoother arrivals. Agrifood Investment: Bhutan’s agrifood sector is set to receive a USD 97.69 million boost through the FAO Hand-in-Hand initiative, targeting food self-sufficiency and export opportunities for 27,000+ farming households. Hydropower & Energy Outlook: DGPC highlights Bhutan’s hydropower role in meeting domestic demand and exporting power to India, with plans to scale installed capacity to support rising energy needs. Craft & Natural Wool Dyeing: Training programmes aim to revive natural wool dyeing for yathra weaving by using locally sourced dyes, protecting livelihoods and traditional production in Bumthang. Digital Skills for Youth: A Tech-Novation Hackathon 2026 showcased youth-led digital solutions, building ICT skills through youth centres and tertiary institutions.

Waste & Circular Economy Funding: Recykal raised $23 Mn in a bridge round (mix of primary and secondary deals) to scale its plastic and e-waste tracking and expand deposit return system deployments, with plans to strengthen its tech stack and push international growth. Agri-Food Investment: HiHi targets USD 97.69 million to support over 27,000 farming households under FAO’s Hand-in-Hand initiative, aiming to boost food self-sufficiency and create export opportunities. Hydropower & Energy Security: DGPC was highlighted as Bhutan’s sole hydropower producer meeting domestic demand and contributing a major share of government revenue, with plans to grow installed capacity to meet rising needs and sustain export earnings. Tourism & Border Trade Branding: Phuentshogling is set to get tourism branding and digital media tools under the Phuentshogling Thromde Enhancement Programme, including a dedicated website to improve visitor discovery and local business momentum. Industrial Policy & New Businesses: The 2026-27 State of the Nation priorities include mobilising Nu 3.5bn in FDI, launching new startups, setting up 100 new industries outside Thimphu/Chhukha, and expanding tourism packages and export growth for construction materials. Creative Industries & Skills: A Youth Tech-Novation Hackathon showcased digital solutions with 21 teams and 900+ youth trained across youth centres and tertiary institutions, pushing Bhutan’s digital economy readiness.

New Industry Push in Chitwan: SY Panel inaugurated two new plants in Ratnanagar—SY UPVC (window/door/partition materials) and SY Cosmetic (18 beauty product types)—with about Nu 60 crore investment, aiming to finish construction in six months and ramp up jobs, skills, and exports. Hydropower Finance Move: Bhutan’s hydropower sector gets a first-of-its-kind step with securitisation of hydropower receivables, underlining DGPC’s central role in meeting domestic demand and funding government revenues. Tourism & Trade Gateway Branding: Phuentshogling is set to be repositioned as a clean, safe, experiential border destination, with a contract signed for tourism branding and a digital media platform to boost visitor planning and local business activity. Agrifood Investment for Exports: HiHi targets USD 97.69 million to transform Bhutan’s agrifood sector via the FAO Hand-in-Hand initiative, aiming for stronger self-sufficiency and new export opportunities. Natural Wool Dye Revival: Training for Chhumey weavers focuses on reviving natural wool dyeing for Yathra weaving, using locally sourced dyes as sheep-rearing declines. Digital Skills for Industry: A youth tech hackathon showcased Bhutan’s push to build practical ICT talent, feeding future services and production capacity.

Bhutan’s craft revival: Women weavers in Bumthang’s Chhumey Gewog are being trained to revive natural wool dyeing for Yathra textiles as sheep-rearing declines, using locally sourced dye plants to keep the centuries-old production culture alive. Digital public services & identity: Bhutan is exploring AI for public broadcasting and emergency communication, while separate regional updates highlight interoperable digital travel credentials trials using decentralized identity—signals Bhutan’s industry and services can benefit from trusted digital systems. Energy & renewables context: Indo-German discussions on “Energy Security through Renewable Energies” stress renewables to cut fossil-fuel price shocks—relevant as Bhutan weighs clean energy and LPG price pressures. Tourism and industry planning: Bhutan’s government outlines 2026-27 priorities including new industries outside Thimphu/Chhukha, tourism packages, and export growth targets—plus momentum from the Bhutan International Travel Mart. Regional trade links: Thailand–Bhutan FTA news points to duty elimination and new sourcing options, with potential spillovers for Bhutan’s textiles, processed foods, and construction materials.

Climate & Risk Watch: ICIMOD says even with a weaker 2026 monsoon in the Hindu Kush Himalaya, Bhutan and neighbours still face high flash-flood and landslide risk from short bursts of intense rain plus rising temperatures. Craft & Rural Industry: Bumthang’s declining sheep-rearing is threatening natural wool dyeing for Yathra weaving; about 30 women weavers from Chhumey Gewog trained to revive natural dyeing using locally sourced plants. Energy Security Dialogue: Indo-German talks with India’s MNRE pushed renewables as a hedge against fossil-fuel price shocks, framing clean power as both climate action and economic resilience. Digital Skills for Youth: A Tech-Novation Hackathon 2026 showcased digital solutions by 21 teams, training 900+ youth through youth centres and tertiary institutions. Media & AI in Emergencies: The ABU Media Summit in Paro highlighted responsible AI use for disaster preparedness and emergency communication, noting Bhutan is still exploring public broadcasting applications. Trade & Industry Linkages: A Thailand–Bhutan FTA is set to cut import duties and could expand Thai exports like processed foods, textiles, chemicals, and construction materials while giving Thai firms more sourcing options from Bhutan. Industrial Decarbonization Deal: A Nagaland–Bhutan project will convert bamboo waste into renewable biocarbon for Bhutan’s ferrosilicon industry, tying rural jobs to cleaner production. Bhutan Policy Push: Bhutan’s State of the Nation report flags economic transformation via startups, new industries outside Thimphu/Chhukha, tourism packages, and continued support under the Economic Stimulus Programme. Co-op Sector Modernization: Amit Shah reviewed cooperative banking, organic agriculture and cooperative exports, stressing digital transformation, governance and cybersecurity.

Bhutan Economic Transformation: Bhutan’s 2026-27 priorities were outlined in the State of the Nation report, with Nu 3.5bn targeted in FDI and plans to set up 100 new industries outside Thimphu/Chhukha, plus new tourism packages and a Red Panda Tourism Flagship in Haa aimed at 300,000 visitors. Hydropower & Growth: Bhutan’s GDP grew 30% since the start of the 13th Five-Year Plan, driven by hydropower capacity rising from 2,452MW to 3,576MW, with more projects resuming and targets to reach 25,000MW by 2040. Transport & Business Costs: Bhutan’s lending rate framework is under review with the RMA after concerns that high borrowing costs are slowing SMEs and investment. Public Works Accountability: The PAC flagged a systemic engineering and procurement capacity gap behind recurring irregularities in infrastructure projects. Industry & Trade Links: Bhutan and Singapore deepened agri-food trade with the opening of the first Mini Bhutan Market in Singapore. Energy Transition Industry Link: A Nagaland–Bhutan bamboo-to-biocarbon project is set to supply renewable biocarbon to decarbonize Bhutan’s ferrosilicon industry. Climate Risk Watch: ICIMOD warned that even with below-normal monsoon rainfall in the HKH, flash floods and landslides remain a serious risk due to intense bursts and water stress.

Bhutan Economic Transformation: In the State of the Nation report, the Prime Minister said Bhutan’s GDP has grown 30% since July 2024, with hydropower capacity rising to 3,576 MW, and outlined a 2026-27 push via eight national priority programmes—FDI push (Nu 3.5bn), new startups, and plans to set up 100 new industries outside Thimphu/Chhukha, plus tourism packages and export targets for gypsum, dolomite and construction materials. Energy & Infrastructure: The same report highlighted connectivity upgrades (new highways, bridges, dry ports) and continued hydropower build-out, including resumed work on major projects and new small hydropower development. Cost of Borrowing: Bhutan’s Finance Ministry directed the RMA and banks to review the lending rate framework (including MLR and expected credit loss rules) to see if borrowing costs can be reduced without harming financial stability. Public Works Capacity Gap: Parliament’s PAC flagged recurring irregularities in engineering and procurement, pointing to a shortage of experienced technical staff and weak supervision in infrastructure projects. Transport Enforcement: BCTA cancelled permits of 25 taxi operators for violating transport directives around Kathrid empowerment at Kuenselphodrang. Tourism Deal-Making: BITM 2026 in Thimphu signalled a shift to structured international partnerships, bringing in overseas buyers to support Bhutan’s “high value, low volume” model. Agri-Food & Trade: Bhutan and Singapore moved to deepen agri-food ties with the opening of the first Mini Bhutan Market in Singapore. Water & Farm Protection: Safe water filtration expanded to 85% of schools, while chain-link fencing funded under India’s PTA is underway in Samdrup Jongkhar to cut wildlife crop damage. Climate Risk Watch: ICIMOD warned that even with below-normal monsoon forecasts for the HKH region (including Bhutan), flash floods, landslides and drought-flood swings remain a serious risk.

Bhutan’s Finance & Growth Push: Bhutan’s Finance Minister said the government will review the lending rate framework with the RMA and banks to tackle high borrowing costs that are slowing business growth and investment. Public Works Accountability: The Parliament’s Public Accounts Committee flagged a “systemic failure” in engineering and procurement capacity behind recurring irregularities in public infrastructure, citing shortages of experienced technical staff and unresolved audit observations. Education Services & Jobs: A new report highlights how women dominate Bhutan’s education consultancy and placement firms, with 67 registered ECPFs supporting overseas study pathways. Tourism Deal-Making: Bhutan International Travel Mart 2026 is positioning the country for stronger, structured international partnerships, bringing in global buyers to support the “high value, low volume” model. Tourism & Transport Compliance: BCTA suspended permits of over 20 taxi operators for violating transport directives around the Kathrid empowerment at Kuenselphodrang. Agri-Value & Rural Livelihoods: Chain-link fencing funded under India’s PTA is underway in Samdrup Jongkhar to reduce wildlife crop damage for 50+ households. Water & Health Infrastructure: Safe drinking water access is expanding nationwide through school and institutional filtration, reaching an estimated 85% of schools. Green Industry & Trade: Bhutan and Singapore deepened agri-food ties with the opening of the first Mini Bhutan Market in Singapore. Digital Identity Momentum: Bhutan joined the 50-in-5 campaign to strengthen privacy-preserving self-sovereign digital ID implementation. Energy & National Planning: The State of the Nation report says GDP grew 30% since the start of the 13th FYP, driven by hydropower and other sectors, alongside major connectivity and dry-port progress.

Climate & Risk: ICIMOD warns that even with below-normal monsoon rains across the Hindu Kush Himalaya (including Bhutan), short bursts of intense downpours, landslides and flash floods remain a serious threat, with drought and flood risks rising together. Tourism Trade: Bhutan wrapped up BITM 2026 in Thimphu, drawing 200+ international buyers from 15 countries, as the country leans into structured partnerships to grow high-value, low-volume tourism. Agri-Food Exports: Bhutan and Singapore deepened ties as Bhutan’s first Mini Bhutan Market opened in Singapore, with ministers pushing expanded agri-food trade. Finance for Industry: Bhutan’s MoF will review the lending rates framework with the RMA and banks to tackle high borrowing costs that are slowing business growth. Public Works Capacity: Parliament’s PAC flagged a deep engineering and procurement capacity crisis behind recurring irregularities in public infrastructure projects. Water Security: A safe water expansion is already benefiting 75,000+ children via school filtration, aiming for universal clean water access by 2030. Transport Regulation: BCTA suspended permits of 25 taxi operators for violating transport directives around Kathrid services.

Climate & Risk: ICIMOD warns that even with a below-normal monsoon forecast for Bhutan and the wider HKH, short bursts of intense rain, heat and water stress can still trigger flash floods and landslides—so communities should closely track advisories. Finance & Credit: Bhutan’s MoF says it will review the lending rates framework with the RMA and banks, aiming to lower borrowing costs without hurting financial stability. Public Works & Skills: Bhutan’s PAC flags a deep engineering and procurement capacity crisis behind recurring irregularities in infrastructure projects, pointing to shortages of experienced technical staff. Water & Rural Services: Bhutan expands safe drinking water via a nationwide filtration programme now reaching over 75,000 children and about 85% of schools. Tourism & Trade: Bhutan’s BITM 2026 wraps with 200+ international buyers, while Bhutan and Singapore push agri-food trade with the first Mini Bhutan Market in Singapore. Wildlife & Farming: Chain-link fencing funded under India’s PTA is underway in Samdrup Jongkhar to protect farm land from wildlife and reduce crop losses. Digital Identity: Bhutan joins the 50-in-5 campaign to strengthen privacy-preserving self-sovereign digital ID foundations. Hospitality & Skills: AHEAD Asia 2026 shortlist is revealed, highlighting new hospitality ventures across the region.

Transport Enforcement: Bhutan’s BCTA cancelled permits of 25 taxi operators over violations tied to the Kathrid empowerment at Kuenselphodrang, a reminder that service rules are being enforced in Thimphu. Cost of Credit: The MoF says it will work with the RMA and banks to review Bhutan’s lending rate framework, including the Minimum Lending Rate and credit loss requirements, as businesses push for cheaper borrowing. Public Works Accountability: Parliament’s PAC flags a deep engineering and procurement capacity crisis behind recurring irregularities in infrastructure projects, pointing to unresolved audit observations and a shortage of experienced technical staff. Women in Services: A look at Bhutan’s education consultancy and placement firms shows women dominating the sector’s workforce as more students pursue overseas study. Agri-Food Trade: Bhutan and Singapore are stepping up agri-food ties, with the first Mini Bhutan Market opening in Singapore alongside ministerial talks. Tourism Deal-Making: BITM 2026 is positioning Bhutan for longer-term tourism growth by bringing international buyers into structured partnerships, not just destination promotion. Water & Farm Resilience: A safe water filtration expansion is already benefiting over 75,000 children, while chain-link fencing funded under India’s PTA is underway in Samdrup Jongkhar to protect crops from wildlife. Digital Foundations: Bhutan has joined the 50-in-5 campaign to strengthen privacy-preserving self-sovereign digital identity and other digital public infrastructure. Engineering for Growth: Businesses in Phuentshogling and Samtse are urging regulatory reforms, citing delays and barriers that slow investment at key economic gateways. Climate Risk: ICIMOD warns that even with below-normal monsoon rainfall in the HKH region, Bhutan still faces high flash-flood and landslide risk from short bursts of intense rain.

Safe Water Expansion: Bhutan’s nationwide school and institution safe-water filtration programme is scaling fast, already reaching 75,000+ children and about 85% of schools, with support linked to the 2025 Zayed Sustainability Prize. Farmers’ Protection: In Samdrup Jongkhar, Baylamsharang is installing 5+ km of chain-link fencing under India’s PTA to cut wildlife crop damage for 50+ households. Tourism Partnerships: Bhutan International Travel Mart (BITM) 2026 in Thimphu drew 200+ international buyers from 15 countries, pushing Bhutan’s “High Value, Low Volume” model through deeper trade links. Digital Identity for Growth: Bhutan joined the 50-in-5 campaign as the 39th member, backing privacy-preserving self-sovereign digital ID to strengthen service delivery and unlock economic opportunities. Agrifood Value Chain: Samtse launched 11 ABS-certified biodiversity products, including moringa and cordyceps-based wellness items, aiming to scale Bhutan’s green economy. Cold Storage Push: Bangladesh’s agriculture minister announced plans for 2,000 mini cold storages (solar-powered, cooperative-run) to help farmers store produce and get fairer prices—an approach Bhutan agrifood stakeholders may watch closely. Finance Accountability: Bhutan’s IFMIS work is expected to tackle misuse of Closed Work Accounts after PAC and audit concerns raised transparency and control gaps. Credit Cost Pressure: Bhutan is exploring ways to reduce lending rates as high borrowing costs and non-performing loans strain businesses and farmers. Climate Risk Watch: ICIMOD warns that even with a weaker monsoon forecast, HKH regions including Bhutan face high disaster risk from intense bursts, landslides, and flash floods.

Digital Identity & Land Verification: Bhutan joined the 50-in-5 campaign as its 39th member, backing its privacy-preserving self-sovereign ID push and linking digital credentials to trusted service delivery and land ownership checks. Public Sector Innovation: The Royal Civil Service Commission launched the first Civil Service Innovation Day to showcase citizen-centric reforms and digital transformation across government agencies. Green Economy & Agrifood Value: Bhutan launched 11 ABS-certified biodiversity products, including moringa and cordyceps-based wellness items, aiming to scale premium green exports. Cold Storage for Farmers: Bangladesh’s agriculture ministry plans 2,000 mini cold storages nationwide (solar-powered, cooperative-run) to cut post-harvest losses and stabilize farm prices. Tourism Market Access: Bhutan wrapped up BITM 2026 in Thimphu with 200+ international buyers from 15 countries and flagged the 2027 edition, reinforcing “high value, low volume” tourism through partnerships. Energy Cost Pressure: Bhutan reported rising LPG procurement costs after India price changes, with domestic cylinder prices adjusted from June 1 and June 8. Trade & Investment Linkages: Thailand’s cabinet approved the Thailand-Bhutan FTA, setting up duty cuts and potential investment opportunities around Gelephu Mindfulness City. Skills for Creative Industry: Bhutan’s live sound training programme in Thimphu targets technical capacity for the growing events and entertainment sector. Finance & Credit Stress: Bhutan is exploring ways to reduce lending rates as borrowers face high costs and non-performing loans remain a concern. Climate Risk Watch: ICIMOD warned that even with below-normal monsoon rainfall forecasts, HKH hazards like flash floods and landslides remain high due to intense short bursts and rising temperatures.

Tourism & Trade: Bhutan launched the Bhutan International Travel Mart (BITM) 2026 (11–13 June) with 200+ international buyers from 15 markets and 50+ local exhibitors, aiming to turn “high-value, low-volume” tourism into stronger business partnerships and longer-term visitor growth. Energy & Cost Pressures: Bhutan’s LPG market remains fully import-linked to India; after India’s price revisions, Bhutan raised subsidized cylinder prices by Nu 36 (effective June 8), with procurement costs climbing sharply from April to June. Construction & Skills: The Parliament’s Public Accounts Committee flagged recurring audit issues in government construction as tied to a shortage of experienced engineers and senior technical staff, with only 8 of 40 architects in senior grades. Clean Cooking Transition: A carbon-financed private initiative is set to use hydropower-generated electricity to accelerate Bhutan’s shift away from firewood and LPG, addressing health and environmental costs. Disaster Risk: ICIMOD warns that even with below-normal monsoon rainfall signals for Bhutan and the HKH, short bursts of intense rain plus heat and water stress can still drive flash floods and landslides. Creative Industry Capacity: Thimphu hosted Bhutan’s first Essentials Training Programme for Live Sound, building local technical talent for a growing events and entertainment sector.