India Bhutan Jaigaon Pasakha trade route – Burning Issues

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Route Between ______ and _______
The new route will operate between Jaigaon in West Bengal and Pasakha in Bhutan, enabling smoother trade of goods and strengthening of sub-regional cooperation amid Chinese inroads into South Asia, said people familiar with the development.
A land customs station has been opened at Ahllay, Pasakha by the Indian government at the request of the Bhutanese government as part of the new land route.

Decongest the Jaigaon-Phuentsholing route

The new route for Pasakha Industrial Estate in Bhutan will decongest vehicular traffic along the Jaigaon-Phuentsholing route and boost bilateral trade and commerce, officials said, adding the new connectivity link will be especially beneficial for movement of heavy vehicles like trucks and industrial raw materials from India to Bhutan.

Decongest the Jaigaon-Phuentsholing route

Trade between India and Bhutan through the Jaigaon-Phuentsholing border trade point amounts to approximately ₹6,000 crores annually.
This trade point caters to around 75% of the overall trade between the two countries.

Boost for NE India

“These efforts will further have a positive effect on the trade growth with North Eastern States of India,”

Advantages for Bhutan

The India-Bhutan Agreement on Trade, Commerce and Transit which was last renewed in 2016 allows for free trade and commerce between India and Bhutan and the pact provides for about 21 entry or exit trade points between India and landlocked Bhutan. This includes 10 trade points with Land Customs Stations (LCS) at the Indo-Bhutan border. Bhutan uses some of these to trade with third countries.

India is Bhutan’s largest trading partner

The bilateral trade stood at Rs 9,227 crore in 2018.

Trade Basket

Bhutan imports mineral products, machinery and mechanical appliances, electrical equipment, base metals, vehicles, vegetable products, plastics and articles from India.
Bhutan exports electricity, portland cement, dolomite, timber and wood products, potatoes, cardamom and fruit products to India.

India Bhutan Recently Signed JV Hydro Electric Project

The opening of the new trade route comes close on the heels of signing of the concession agreement for the 600 MW Kholongchhu (joint venture) Hydroelectric Project in Bhutan.
The run-of-the-river project is located on the lower course of the Kholongchhu river in Trashiyangtse district of eastern Bhutan.
The project envisages an underground powerhouse of four 150 MW turbines.

Joint Implementation

It will be implemented by Kholongchhu Hydro Energy Limited, a joint venture company formed between Druk Green Power Corporation of Bhutan and Satluj Jal Vidyut Nigam of India.
The project is expected to be completed in the second half of 2025.
The Kholongchhu project is one of four additional projects agreed in 2008, as a part of India’s commitment to help Bhutan to create a total 10,000 MW of installed capacity by 2020.