India and Bhutan Launch Jaigaon-Ahllay for Pasakha Industrial Estate Trade Route

· Alternate Route via Phuentsholing

India and Bhutan launched a new trade route on Wednesday, as the two neighbours decided to widen their connectivity close on the heels of the Sino- Indian stand-o along the Line of Actual Control.

The new route will operate between Jaigaon in West Bengal and Ahllay in Bhutan, enabling smoother trade of goods and strengthening of sub-regional cooperation amid Chinese inroads into South Asia, said people familiar with the development.

Bhutan is a key buffer state between India and China and critical for India’s security in the region, they said

A land customs station has been opened at Ahllay, Pasakha by the Indian government at the request of the Bhutanese government as part of the new land route, said one of the persons, who did not wish to be identified.

Announcing the development, the Indian envoy to Bhutan, Ruchira Khamboj, tweeted, “Bhutan is India’s closest partner and friend and given the excellent bilateral relationship between our two countries and keeping in view as well the ongoing Covid-19 pandemic situation, this access to Ahllay should further facilitate trade and commerce between our two countries.”

The new route for Pasakha Industrial Estate in Bhutan will decongest vehicular traffic along the Jaigaon-Phuentsholing route and boost bilateral trade and commerce, official said, adding the new connectivity link will be especially beneficial for movement of heavy vehicles like trucks and industrial raw materials from India to Bhutan.

India is Bhutan's largest trading partner. The bilateral trade stood at Rs 9,227 crore in 2018. Bhutan imports mineral products, machinery and mechanical appliances, electrical equipment, base metals, vehicles, vegetable products, plastics and articles from India.

Bhutan exports electricity, portland cement, dolomite, timber and wood products, potatoes, cardamom and fruit products to India.

The opening of the new trade route comes close on the heels of signing of the concession agreement for the 600 MW Kholongchhu (joint venture) Hydroelectric Project in Bhutan. Hydropower sector is the flagship area of India-Bhutan bilateral cooperation.

The run-of-the-river project is located on the lower course of the Kholongchhu river in Trashiyangtse district of eastern Bhutan. The project envisages an underground powerhouse of four 150 MW turbines, with water impounded by a concrete gravity dam of 95 metres height.

It will be implemented by Kholongchhu Hydro Energy Limited, a joint venture company formed between Druk Green Power Corporation of Bhutan and Satluj Jal Vidyut Nigam of India. The signing of the concession agreement will lead to commencement of construction and other works of the first such joint venture hydroelectric project between India a Bhutan. The project is expected to be completed in the second half of 2025