AGP Executive Report

Mining: India’s state-owned NMDC is scouting for minerals including limestone, dolomite, coking coal and tungsten in Bhutan as it seeks to diversify beyond iron ore; no specific Bhutanese acquisition has been confirmed. Rural Infrastructure: Fifteen India-backed projects opened in Mongar, including more than 65 km of roads, 10 km of irrigation canals and two bridges, improving access for farmers and communities. Economic Support: The ADB approved $17.42 million to help Bhutan cushion families and public services from rising food and energy costs, as part of a broader $267.88 million anti-crisis plan. Natural Resources: Bhutan’s 2025 environmental accounts show timber supply rose 36.8% to 12.87 million cubic feet, while several mineral reserves continued to decline. Highland Livelihoods: Bhutan, India and Nepal launched a yak herders’ network to share solutions to climate pressures, shrinking grazing land, livestock disease and declining yak populations.

Infrastructure: India-backed projects inaugurated in Mongar include more than 65 km of roads, 10 km of irrigation canals and two bridges, improving access for farmers and communities. Household Support: The ADB approved $17.42 million for Bhutan to cushion families and maintain public services amid rising food and energy costs; the funding forms part of a $267.88 million government anti-crisis plan. Highland Livelihoods: A new Bhutan-India-Nepal yak herders’ network will coordinate responses to animal disease, shrinking grazing lands, wildlife attacks and declining yak populations. Skills and Delivery: The RCSC and RIM launched digital skills, responsible AI and construction management programmes to build civil-service capacity and improve infrastructure project delivery. Natural Resources: Timber supply rose 36.8% in 2025, while several mineral reserves continued to decline, underscoring competing pressures on resources used by construction and industry. Clean Energy: Voith Hydro won a contract for Bhutan’s 90MW Jomori hydropower project.

Economic Support: The ADB approved $17.42 million for Bhutan to cushion families and protect public services from rising food and energy costs. The funding is part of a $267.88 million anti-crisis plan as import pressures weigh on the economy. Skills and Infrastructure: The RCSC and RIM launched programmes in digital skills, responsible AI and construction management to strengthen civil-service capacity. Business and Technology: A November summit in Bhutan will bring business, government and technology leaders together to discuss AI, human development and the environment. Seven women-led businesses also shared how they are building ventures in sectors including software, landscaping and food processing, while facing barriers to finance and growth. Resources and Energy: Timber supply rose 36.8 percent in 2025, but Bhutan’s mineral reserves continue to decline. Voith Hydro won a contract for the 90MW Jomori hydropower project. Industry Outlook: Bhutan’s growth outlook remains strong, though inflation and the external deficit are widening; small businesses and manufacturing remain key areas for future growth.

Economic Support: The ADB approved $17.42 million to help Bhutan cushion households and essential services from rising fuel and food costs, as part of a $267.88 million anti-crisis plan. Skills and Infrastructure: The RCSC and RIM launched programmes in digital skills, responsible AI and construction management to strengthen public services and project delivery. Women in Business: Seven women founders highlighted opportunities in landscaping, software, digital media and food processing, alongside challenges securing finance and customers. Trade and Energy: A new biometric e-gate terminal at the India-Bhutan border aims to ease clearance, while Voith Hydro has won a contract for the 90MW Jomori hydropower project. Resources and Growth: Bhutan’s timber supply rose 36.8 percent in 2025, but mineral reserves continue to decline, underscoring the need to balance industrial growth with resource sustainability.

Economic Support: The Asian Development Bank approved $17.42 million to help Bhutan cushion households and public services from rising fuel and commodity costs, part of a wider anti-crisis plan. Resources: Timber supply rose 36.8% in 2025, but Bhutan’s mineral reserves continue to decline, sharpening the need to balance construction demand with sustainable extraction. Hydropower: Voith Hydro won the equipment contract for the 90MW Jomori project in Samdrup Jongkhar, adding to Bhutan’s renewable power capacity. Manufacturing: A new push for small-business manufacturing highlights the importance of policies that help local firms invest, innovate and reach wider markets.

Resources: Bhutan’s timber supply rose 36.8% to 12.87 million cubic feet in 2025, while several mineral reserves continued to decline, underscoring pressure to balance construction demand with sustainable extraction. Hydropower: Voith Hydro won the equipment contract for the 90MW Jomori project in Samdrup Jongkhar, backed by concessional Japanese financing. Agribusiness: A Nu 6 million solar-powered milk-processing facility in Dagala aims to expand yak dairy production; a pilot cheese venture reportedly doubled herders’ income. Economic outlook: The IMF projects 7% growth in 2026, but inflation is forecast to rise to 5.6% and the current account deficit to widen to 16.3% of GDP. Public investment: The government handed over Nu 2.90 billion for 13th Five-Year Plan projects, supporting development across the country.

Economic Outlook: Bhutan is forecast to grow 7% in 2026, but inflation is expected to reach 5.6% and the current-account deficit to widen, according to the IMF. Hydropower: Voith Hydro has won the equipment contract for the 90MW Jomori project in Samdrup Jongkhar, adding to Bhutan’s expanding generation pipeline. Rural Enterprise: A Nu 6 million solar-powered yak milk facility in Dagala aims to scale cheese production; herders doubled their income during the initiative’s pilot phase. Development Funding: India handed over Nu 2.90 billion for Bhutan’s 13th Five-Year Plan, supporting projects in agriculture, infrastructure, renewable energy and other sectors. Energy Security: Despite abundant hydropower, Bhutan’s fuel imports are rising, underscoring the challenge of turning renewable electricity into lower dependence on imported fuel.

Jobs and Productivity: The World Bank says South Asia must create more productive work as millions of young people enter the workforce each year. Agriculture employs over 40% of workers in the region, including nearly half in Bhutan. Hydropower: Druk Hydro Energy has awarded Voith Hydro the equipment contract for the 90MW Jomori project in Samdrup Jongkhar, adding to Bhutan’s renewable generation pipeline. Economic Outlook: The IMF projects Bhutan’s economy to grow 7% in 2026, but warns inflation and the current-account deficit will rise. Development Funding: India has handed over Nu 2.90 billion for Bhutan’s 13th Five-Year Plan, supporting projects across sectors including agriculture, infrastructure and renewable energy. Business Finance: The government and the RMA will review banks’ extra lending margins, aiming to ease borrowing costs for SMEs and other businesses. Energy Transition: Electricity supply and industrial use are rising, but so are petrol and diesel imports—leaving Bhutan reliant on imported fuel despite its hydropower strength. Highland Livelihoods: A new Dagala initiative will build a solar-powered milk-processing facility and support yak dairy production and local incomes.

Hydropower: Voith Hydro won the equipment contract for Bhutan’s 90MW Jomori project in Samdrup Jongkhar, financed by a concessional JICA loan. Highland enterprise: A Nu 6 million solar-powered milk facility planned for Dagala will support yak herders; a pilot cheese-making project doubled incomes. Economic outlook: The IMF projects 7% growth in 2026, but inflation is forecast to rise to 5.6% and the current account deficit to widen. Business finance: The government and central bank will review banks’ lending margins to ease borrowing costs for SMEs, rather than impose a rate cap. Energy transition: Electricity supply rose 32.8% in 2025, but petrol and diesel imports also climbed, underscoring the challenge of reducing fuel dependence. Minerals: Known quartzite reserves have fallen nearly 40% since 2015, with no new discoveries recorded. Trade promotion: BCCI has set aside Nu 16.3 million for fairs and exhibitions, though Nu 4.43 million of its annual programme budget remains unsecured.

Hydropower: Druk Hydro Energy has awarded Voith Hydro the equipment contract for the 90MW Jomori project in Samdrup Jongkhar. The JICA-financed plant will have two 45MW units. Highland livelihoods: A Nu 6 million solar-powered milk facility planned for Dagala aims to expand yak dairy production. Pilot cheesemaking reportedly doubled herders’ income. Economic outlook: The IMF projects growth of 7% this year, but inflation is forecast to reach 5.6% and the current account deficit to widen to 16.3% of GDP. Business finance: The government and RMA will review banks’ additional lending margins, targeting more affordable credit for SMEs without imposing a blanket rate cap. Energy transition: Electricity supply rose 32.8% in 2025, but petrol and diesel imports also climbed, highlighting Bhutan’s continued reliance on imported fuel. Trade promotion: BCCI has set aside Nu 16.3 million for trade fairs and exhibitions in its new workplan, while Nu 4.43 million of its total programme budget remains unsecured.

Highland Dairy: A new Dagala initiative will build a Nu 6 million solar-powered milk-processing facility, helping herders expand cheese production; pilot sales reportedly doubled incomes. Economic Outlook: The IMF projects Bhutan’s GDP growth at 7% in 2026, but inflation is forecast to rise to 5.6% and the current-account deficit to 16.3% of GDP. Private Sector: BCCI has set a Nu 38.59 million workplan for 2026–27, with trade fairs its biggest priority, but Nu 4.43 million remains unfunded. Energy: Electricity supply rose 32.8% in 2025, yet petrol imports climbed 38.7% and diesel imports 27.5%; industrial electricity use also increased, underscoring the challenge of reducing fuel dependence. Business Finance: The government plans to review banks’ loan margins to ease borrowing costs for SMEs; the average lending rate was 9.38% in December 2025. Development Funding: India handed over Nu 2.90 billion for Bhutan’s 13th Five-Year Plan, including support for agriculture, infrastructure, skills and renewable energy. Farmers’ Markets: Cordyceps collectors withdrew 227.15 kilograms from this year’s auction after rejecting bids, leaving just 73.02 kilograms sold.

Business Support: The Bhutan Chamber of Commerce and Industry has set aside Nu 38.59 million for trade fairs, business training and market access in 2026–27, but Nu 4.43 million remains unfunded. Development Funding: India handed over Nu 2.90 billion for Bhutan’s 13th Five-Year Plan, including support for college infrastructure, skills programmes and agriculture. Energy: Electricity supply rose 32.8 percent in 2025, but petrol imports climbed 38.7 percent and diesel imports 27.5 percent, underscoring the challenge of reducing fossil-fuel use in transport and industry. Access to Credit: The government plans to review banks’ additional loan margins rather than impose a blanket rate cap, with affordable borrowing a concern for SMEs and other businesses. Tourism: September arrivals rose 28.6 percent year on year to 26,040, but visitor numbers alone do not show whether local tourism businesses earned more. Agriculture: Cordyceps collectors withdrew 75.7 percent of the reported auction quantity after rejecting low bids, while farmers in Samtse are still searching for reliable crops after disease wiped out orange orchards.

Mountain Livelihoods: Herders from Bhutan, India and Nepal will launch the first regional yak herders’ network at Bhutan’s Royal Highland Festival on October 23, with Bhutan hosting its secretariat. Farming: In Samtse, citrus disease has wiped out orchards and left farmers searching for viable replacement crops; in Tsirang, a farmer’s sustainable kiwifruit and agro-processing work has earned international recognition. Farm Markets: Cordyceps collectors withdrew 75.7% of the reported 2026 auction volume after bids fell short of their expectations. Mining: Bhutan’s known quartzite reserves have shrunk nearly 40% since 2015 to 2.9 million tonnes, enough for about 11 years at last year’s extraction rate. Energy Investment: DGPC hired Entura to prepare feasibility studies for two hydropower projects totalling 954MW, with reports due in 18–24 months. Business: The Bhutan Chamber of Commerce and Industry proposed a Nu 38.59 million workplan for 2026–27, but Nu 4.43 million remains unfunded.

Agriculture: Samtse farmers are struggling to replace citrus orchards lost to disease, with new crops uncertain in the local climate. In Tsirang, a farmer’s decade-long work in kiwifruit, organic farming and agro-processing has earned international recognition. Cordyceps Market: Only 73.02kg of the 300.16kg reported at this year’s auction was sold; collectors withdrew 75.67%, mainly because bids fell short of expectations. Mining: Bhutan’s recorded quartzite reserves have fallen nearly 40% since 2015 to 2.9 million tonnes. At last year’s extraction rate, they could last about 11 years. Energy: DGPC has commissioned feasibility studies for the 590MW Chamkharchhu II and 364MW Chamkharchhu IV hydropower projects, with reports due in 18–24 months. Business: The Bhutan Chamber of Commerce and Industry proposed a Nu 38.59 million workplan for 2026–27, but Nu 4.43 million remains unfunded. Women-led businesses also shared challenges in financing and growth at a Thimphu discussion. Transport: Road upgrades underway in Samdrup Jongkhar are expected to improve access to markets for milk, oranges and cardamom.

Business: The Bhutan Chamber of Commerce and Industry has proposed a Nu 38.59 million workplan for 2026–27, but Nu 4.43 million remains unfunded. At a Thimphu discussion, women entrepreneurs from food production, landscaping, software and digital content highlighted challenges in financing and growing their businesses. Hydropower: Druk Green Power Corporation has hired Entura to prepare feasibility reports for the 590MW Chamkharchhu II and 364MW Chamkharchhu IV projects, with studies expected to take 18–24 months. Transport: Road upgrades on the 22-kilometre Narphung–Gomdar route are about 40 per cent complete, improving access for residents and helping farmers move milk, oranges and cardamom to market. Agriculture: Haa is set to host Bhutan’s first flow-through decoupled aquaponic prototype. Regional investment: India has handed over Rs 290 crore for Bhutan’s 13th Five Year Plan projects.

Business: BCCI has proposed a Nu 38.59 million workplan for 2026–27, but Nu 4.43 million remains unfunded. Dr Trashi Wangyel, a construction-sector leader, has been elected president. Women in Business: Seven women entrepreneurs shared their experiences across sectors including food, landscaping and software, highlighting financing and growth challenges. Energy: DGPC has hired Entura to prepare feasibility studies for the 590MW Chamkharchhu II and 364MW Chamkharchhu IV projects, with reports due in 18–24 months. Transport and Agriculture: Work is underway to improve the 22-kilometre Narphung–Gomdar road. With about 40 per cent complete, the upgrade is expected to ease transport of milk, oranges and cardamom to market.