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India's GST to hit Bhutanese economy, too: says ADB

According to the ADB report, Bhutan's imports are likely to increase as exports from India are zero-rated under GST

Press Trust of India  |  New Delhi 

GST. Illustration: Ajay Mohanty
GST. Illustration: Ajay Mohanty

India's Goods and Services (GST) may have an adverse impact on the through trade and channels, the Asian Development (ADB) said in its latest report.

The total trade between and was valued at $817 million in 2016-17, up from $750 million a year ago, as per Indian data. India's to totalled $509 million while came in at 4308 million.

"India's Goods and Services (GST), implemented in July 2017, may have an adverse impact on the .. through trade and channels," stated the Asian Development Outlook 2017 Update report.

According to the report, Bhutan's will likely increase as Indian are zero rated under GST, making the cheaper.

"to will be subjected to GST, removing Bhutan's previous competitive edge over Indian producers," it stated.

Additionally, rebates of Indian excise duties to the Bhutanese will end as these taxes have been subsumed within GST, implying a loss of budget revenue, it said.

The of Bhutan, the report said, has decided for the time being not to levy higher taxes on imports from India, but to use credit policy to restrain import demand, especially for automobiles.

imports machines, medical equipment, processed food, iron and steel, fibre, pharma, hardware and electrical transformers, among others, from India, while exports include household articles, pepper, electric components and electricity.

First Published: Sun, October 01 2017. 13:22 IST