India’s meteoric rise to become the world’s fourth-largest economy has sparked optimism in Bhutan, with officials viewing it as a gateway to deeper trade ties, increased investment, and stronger regional cooperation.
According to Bhutan’s Ministry of Finance, the economic milestone presents significant opportunities for the kingdom, given that over 80 per cent of its trade is with India. “A stronger Indian economy translates into greater purchasing power, and this could boost demand for Bhutanese goods and services,” the ministry noted in a statement.
India’s Economic Leap
India’s nominal GDP is expected to cross four trillion US dollars by the end of this year, according to the International Monetary Fund (IMF). The country’s Prime Minister, Narendra Modi, hailed the achievement, recalling that when he first assumed office in 2014, India ranked 11th globally. “Today, India has become the world’s fourth-largest economy. It is a matter of pride for all of us that we have now surpassed Japan,” he said.
Boost for Bhutan’s Trade and Exports
For Bhutan, India’s economic expansion could mean a larger market for its key exports. Hydropower, a backbone of Bhutan’s economy, is expected to gain momentum as India’s energy needs grow. Major projects like Sunkosh and Kholongchu may see accelerated progress.
Bhutan’s organic agricultural products—including ginger, turmeric, apples, and herbal goods—are also likely to benefit. Indian consumers, with rising disposable incomes, are increasingly willing to pay premium prices for high-quality organic produce.
Lower Import Costs and Digital Collaboration
A robust Indian economy could also work in Bhutan’s favour by making imports cheaper. Essential commodities such as fuel, food, and medicines might become more affordable as India’s industries become more efficient.
In addition, Bhutan is eyeing opportunities in the digital space. As the country advances its Digital Drukyul initiative, collaboration with India’s booming digital economy could open doors in sectors like online education, digital payments, and telemedicine.
Strengthening Regional Cooperation
India’s rise is also expected to enhance regional partnerships through platforms such as the BBIN (Bangladesh, Bhutan, India, Nepal Initiative) and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), where Bhutan is an active member.
A Timely Opportunity for Bhutan
With India’s economic transformation reshaping South Asia, Bhutan is well-placed to leverage this growth to reposition its own economy. Analysts believe that if Bhutan strategically expands its trade, strengthens its digital initiatives, and deepens regional partnerships, it could significantly accelerate its economic development in the coming years.
