India-Bhutan Signs New Free Trade Agreement

The Union Cabinet has approved a new free trade agreement between India and Bhutan, which also provides for duty-free transit of Bhutanese merchandise for export to third countries.

NEW DELHI: "Trade relations between India and Bhutan are governed by an Agreement on Trade, Commerce and Transit," a Commerce Ministry statement said here.

"The agreement provides for free trade regime between the two countries. The agreement also provides for duty-free transit of Bhutanese merchandise for trade with third countries," it said.

The agreement was renewed in July 2006 for a period of 10 years.

The validity of the agreement was extended with effect from July 29, 2016, for a period of one year or till the new agreement comes into force through the exchange of diplomatic notes, the statement added.