BHUTAN EYES STRONGER TRADE TIES WITH MALAYSIA BY 2027-2028

By Siti Noor Afera Abu

KUALA LUMPUR, Nov 26 (Bernama) -- Bhutan is considering pursuing a free trade agreement (FTA) with Malaysia as it sees strong potential to expand exports by 2027 or 2028.

The Royal Government of Bhutan’s chief trade officer Pem Zam said Malaysia represents an important emerging market within ASEAN, offering new opportunities for Bhutanese products.

She said Bhutan has started to trade in food products and automated components for computers and electronics with Malaysia and would like to export ferro-silicon, cement and several mineral-based products, including lime and gypsum.

“Initially, we wanted to pursue an FTA with Malaysia. We had to divert because of other priorities. It stalled for a year, but my government is looking forward to (working on) this. We currently do not have formal diplomatic relations or an established trading framework. So the potential timeline would be around 2027 or 2028,” she told Bernama.

On whether Bhutan sees potential to deepen hydropower or energy cooperation with Malaysia and ASEAN member countries, Pem Zam said geographical limitations pose challenges.

She said hydropower is indeed Bhutan’s biggest export. Her government would like to supply beyond its neighbouring countries, but being a landlocked country makes it difficult for Bhutan to expand beyond India or Bangladesh.

It is quite difficult for now, but once we have implemented our agreement with Thailand, we expect improved connectivity. And through Thailand, we may be able to integrate into the global supply chain and export to other ASEAN countries.

“We hope to see more trade engagements between Bhutan and Malaysia; opportunities that bring our countries closer and support sustainable, mutually beneficial growth,” she said.

On whether Bhutan will consider importing Malaysian-made electric vehicles (EVs), she said the possibility exists. However, issues such as customs duties and tariffs fall under the Environment Commission Department and the Revenue and Customs Department.

“Nonetheless, given our strong environmental commitments, I believe the government would welcome EV imports,” she said.

Malaysia–Bhutan trade recorded a 201.0 per cent growth, with Malaysia’s total exports rising to RM12.4 million year-to-date, while imports from Bhutan totalled RM100,000.

Malaysia’s major export products to Bhutan in 2024 included electrical and electronic products (E&E), optical and scientific equipment, chemical and chemical-based products, and transport equipment.

Malaysia’s key imports from Bhutan include E&E products, agricultural goods, chemical and chemical-based products and processed food.

-- BERNAMA