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Bhutan Trade
Traditionally, most foreign trade was with Tibet. By
1960,
however, following the closing of the Bhutan-China border
and the
development of closer ties with India, formal trade with
India
replaced that with Tibet. Although banned by the Bhutan
government
by 1961, barter trade with Tibet has persisted. Since 1960
nearly
all of Bhutan's exports (93 percent in 1989) and the
majority of
its imports (67 percent in 1989) have been with India
(see table 28, Appendix).
Payments for imports in the 1980s were usually made
with
Indian rupees. There were no import duties on Indian
imports, but
customs fees had to be paid on imports from other nations.
Both imports and exports increased steadily during the
1980s,
from a total of Nu805.9 million in 1983 to more than Nu2.9
billion
in 1990
(see table 29, Appendix).
The balance of trade also improved
as the
decade progressed. In 1983, for example, only 20 percent
of trade
was in exported goods, whereas 80 percent was imports;
this
negative trade balance improved markedly by 1990, however,
when
exports accounted for 40.2 percent and imports for 59.8
percent of
foreign trade
(see table 30, Appendix).
Although there was little
trade with
the United States, in recognition of its economic status
Bhutan was
granted an exemption in 1985 from the competitive trade
requirements provided by the United States' Generalized
System of
Preferences.
Exports, which reached almost Nu1.2 billion in 1990,
consisted
primarily of cement, talc, fruit (mostly oranges) and
fruit
products, alcoholic beverages, resin, cardamom, lumber
products,
potatoes, and handicrafts. Although most trade was with
India, such
specialties as timber, cardamom, and liquor were exported
to
Bangladesh, Singapore, and countries in the Middle East
and Western
Europe. The opening of thirteen border crossings with
customs
facilities for Bhutan's exports and imports also eased
trade with
Nepal and Bangladesh. An increasingly important export to
India was
surplus power from Bhutan's Chhukha Hydel Project, which
earned
Bhutan Nu22.3 million in FY 1988; that figure increased to
nearly
Nu399 million only two years later.
Imports amounted to nearly Nu1.8 billion in 1990. They
consisted of raw materials; textiles; cereals; fuel;
investment
goods, including motor vehicles; and other consumer goods,
primarily from India.
Data as of September 1991
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