ITC  
 
Countries / Territories

About the project

  • The EU – Bhutan Trade Support project is funded by the European Union (EU). The project started in May 2018 with a budget of EUR 4 million. The project is implemented by the International Trade Centre (ITC) in collaboration with the Royal Government of Bhutan (RGoB).

    Project objectives

    Overall objective:
    Contribute to Bhutan’s economic growth and poverty reduction

    Specific objective:
    Increased exports and export diversification, possibly contributing to the implementation of the “Brand Bhutan” Initiative

    Expected Results

    Expected Result 1: Enhanced capacities in the formulation and implementation of trade and investment policies and regulations

    For exports to diversify, trade and investment policies and regulations should be supportive of international business development. The capacities of Government officials should be broadened, in a sustainable manner, to increase international trade exposure and skills. The cooperation between policymakers and the private sector in Bhutan is also critical to create a trade-policy framework conducive to the growth of exports. Limited access to market information and understanding of market requirements by economic operators including producers and cottage industry are major impediments to Bhutan’s trade development and promotion across sectors.

    The project will:

    • Build the capacities of Bhutanese public and private institutions to inform trade, investment and regulatory policies, 
    • Address policy, regulatory and procedural impediments to business competitiveness along selected value chains, 
    • Promote investments into Bhutan, including in the selected value chains, 
    • Enhance access to trade and market information through the set-up of a single information service platform on trade-related matters for the private sector and producers, and 
    • Strengthen Bhutan’s Better Business Council with a view to promote informed trade policy Public-Private Dialogue. 

    Expected Result 2: Improved environment for exports of high-value horticulture products, including organic products

    Agriculture represents 15% of Bhutan’s GDP and remains the primary source of livelihood for 60% of the population. Over 95% of employed women in Bhutan work in the agricultural sector. Increased support in product and export diversification along agricultural value chains would lead to significant benefits for a large part of the population, including women in rural areas. The Royal Government of Bhutan has emphasized the need to diversify agricultural production from subsistence type of farming to high value cash crops.

    The objective of the project is to scale-up services to support farmers and cottage industries to improve product quality and increase sales to export markets,
    taking into consideration environment, youth and gender equity. Sustainable and equitable linkages should also be established between sellers and buyers along the value chain.

    The project will:
    • Produce, jointly with country partners, an horticulture value chain analysis and action plan for export diversification and value addition with special focus on women and youth, 
    • Design a horticulture market penetration strategy targeting international markets, 
    • Build export and quality management capacities of stakeholders, from farmers to exporters, and improve coordination along the horticulture value chain, 
    • Set-up a digital technology scheme for farmers to have access to real time price information, 
    • Develop a marketing and branding strategy for the Bhutan horticultural sector in collaboration with the “Brand Bhutan” initiative, 
    • Establish business linkages for Bhutanese producers and exporters with international buyers.

    Expected Result 3: Improved environment for exports of high-value handicraft textile products

    The handmade textile industry is an integral part of the Bhutanese life and culture. Almost half of manufacturing employment in the country is in textiles. This sector is especially important for women, with 85% of all women employed in manufacturing working in the textile sector. It is estimated that one out of five women or one out of three women between the age of 20 and 40 are weaving on a regular basis. Most families have limited income and 10-15% of the weavers are considered poor. The textile handicraft industry has potential to expand significantly in Bhutan, with direct effects on incomes, women and employment, including in rural areas.

    The project will:
    • Formulate a handicraft textile products value chain analysis with special focus on women and youth and market potential in selected target markets, 
    • Improve product quality, supply capacity and innovative designs matching market trends and demand, 
    • Develop a sector-specific marketing and branding strategy and build capacities on marketing and branding for the Bhutan handicraft textile sector, in collaboration with the “Brand Bhutan” initiative, 
    • Establish business linkages between weavers, producers and export markets. Sales of Bhutanese products to tourists will further promote exports and increase demand for Bhutanese handicraft products. 


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