AGP Executive Report

Climate & Food Security: A dry monsoon outlook for the Hindu Kush Himalaya region is raising alarms for South Asian farmers, with experts warning that even less rain can still mean damaging floods and landslides, especially for communities relying on monsoon-dependent crops. Energy & Infrastructure: The ADB has approved a US$160 million loan to expand Bhutan’s solar capacity by 310MW, including 120MW Wobthang and 40MW Pedseling in Bumthang plus a 150MW Dramthang project in Lhuentse, backed by Bhutan’s first private-majority energy PPP and new transmission links. Governance & Integrity: Bhutan’s anti-corruption effectiveness is being discussed in regional expert sessions, with growing interest in using AI to speed up analysis—while stressing that human oversight must lead decisions. Cross-Border Digital Payments: India’s UPI is expanding internationally, including Greece, and NPCI partnerships with HSBC India and J.P. Morgan Payments aim to make overseas UPI FX conversion more transparent in real time. Legal/Customs: Malayalam actor Dulquer Salmaan is set to be questioned again in a luxury vehicle smuggling probe linked to Bhutan, after customs officials reviewed his earlier statements and sought more documents. Local Development: Thimphu’s Phuentsholing is getting a destination branding and digital tourism push under the Phuentsholing Thromde Enhancement Programme, aiming to reposition the border town beyond a transit stop.

Renewables & Grid Modernisation: The ADB approved a $160m loan for Bhutan’s Solar Farm Expansion Project, targeting at least 310 MW of new solar and supporting private-sector participation via Bhutan’s first private-majority public-private partnership in energy. Urban & Tourism Branding: Bhutan’s Phuentsholing Thromde Enhancement Programme signed a contract to build destination branding and a digital tourism platform, aiming to reposition the border town from a transit stop to a stay-worthy gateway. Digital Transition & Data: Bhutan is moving toward Census 2027 with a shift to digital data collection, underscoring the government’s broader push to modernize public systems. Integrity & Governance: Bhutan’s integrity performance remains relatively strong, but reporting flags ongoing concerns around favouritism and a trust deficit, alongside ACC notes about weakening control systems. Environment & Risk: Bhutan recorded renewed animal disease updates (including ASF recurrence in Samtse and Chhukha), while separate coverage highlights gaps in emergency preparedness revealed by earthquake simulation work. Regional Context: India’s fuel export duty changes from July 1 and ADB/JICA-style development finance signals continued South Asian policy focus on energy security and infrastructure—issues that directly shape Bhutan’s cross-border connectivity and power planning.

Energy & Infrastructure: The Asian Development Bank approved a $160 million loan for Bhutan’s Solar Farm Expansion Project, targeting at least 310 MW of new solar capacity and grid modernization, with Wobthang (120 MW) and Pedseling (40 MW) in Bumthang and Dramthang (150 MW) in Lhuentse via a DGPC–Tata Power joint venture. Urban Development & Tourism: Bhutan’s Phuentsholing Thromde Enhancement Programme signed a contract to build destination branding and a digital tourism platform, aiming to reposition the border town from a transit stop to a “clean, safe and experiential” gateway. Governance & Data Systems: Bhutan is preparing for the 2027 Population and Housing Census, set to be its first fully digital census using Computer-Assisted Personal Interviewing with support from UNFPA. Regional Finance Links: NPCI partnerships with HSBC India and J.P. Morgan Payments are set to bring real-time FX settlement for overseas UPI transactions—relevant for cross-border payments that already include Bhutan. Public Health & Integrity: Bhutan’s integrity and anti-corruption efforts remain under scrutiny as reports flag improving scores alongside persistent concerns over favouritism and weak controls.

Bhutan Digital Census Prep: Bhutan’s National Statistics Bureau has started preparations for the 2027 Population and Housing Census, set to be the country’s first fully digital census using a Computer-Assisted Personal Interviewing (CAPI) system, with UNFPA support for planning and capacity-building. Cross-Border Payments Push: NPCI says UPI is expanding further through partnerships with HSBC India and J.P. Morgan Payments to enable real-time FX rates and settlement for international UPI transactions, with UPI already live in countries including Bhutan. Integrity & Anti-Corruption Focus in Thimphu: Experts are meeting in Thimphu to discuss better ways to measure anti-corruption agency effectiveness, including political finance transparency and the role of AI. Thromde Elections Momentum: Reports highlight strong female turnout and progress on candidate finalisation for Bhutan’s upcoming 2026 Thromde elections, with voter registration also underway. Regional Security Leadership: India’s Southern Command leadership changes as Lt Gen Rajesh Pushkar assumes command, underscoring continued focus on the western front facing Pakistan. Energy & Industry Signals: India’s power sector demand is driving growth in high-capacity conductors, with firms gearing up via technology tie-ups. Animal Health Watch: WOAH reports ASF recurrence in Bhutan’s Samtse and Chhukha, adding pressure on pig health monitoring and response.

Bhutan–UN Glacier Push: Bhutan co-sponsored a new U.N. Environment Assembly resolution urging member states to act on glacier preservation, with a focus on cryosphere science and the voices of Indigenous and local communities. Bhutan Digital Census: Bhutan’s National Statistics Bureau is preparing PHCB 2027 as the country’s first fully digital census, moving to computer-assisted interviews with UNFPA support. Thromde Elections Watch: Strong female turnout is reported ahead of upcoming Thromde elections, alongside earlier reports on voter registration and candidate finalisation. Integrity & Anti-Corruption: A Thimphu regional meeting is set to explore better ways to measure anti-corruption effectiveness, including political finance transparency and the role of AI. India–UPI Cross-Border (Bhutan Included): UPI has expanded further globally, with Greece going live and new partnerships enabling real-time FX settlement for overseas UPI payments—building on existing UPI links that include Bhutan. Regional Trade & Tourism Signals: NITI Aayog flags India’s regulatory and visa barriers as major brakes on tourism growth, while Bhutan’s entrepreneurship strategy aims to simplify scaling for private businesses. Fuel Policy Ripple (Regional): India revised export levies on petrol, diesel and ATF from July 1—no direct domestic pump impact—potentially affecting regional aviation costs.

Entrepreneurship Push: Bhutan launched its National Entrepreneurship Strategy 2026 to turn startups into growth engines, tackling scaling barriers like inactive licenses and a dominance of sole proprietorships through regulatory reform, finance access, skills, support services, and market access. Integrity & Anti-Corruption: In Thimphu, ACC-backed discussions stressed that anti-corruption effectiveness depends not just on cases, but on public trust; meanwhile Bhutan’s NIA 2025 showed a strong overall integrity score (8.16/10) even as concerns over favouritism and trust persist. Climate-Resilient Planning: A new geotechnical study is guiding safer, disaster-risk-informed development in Phuentsholing as extreme rainfall and landslides strain infrastructure. Power Sector Capacity: DGPC, BPC and South Korea’s Hyosung signed a tripartite MoU to strengthen GIS maintenance, spare parts supply, and training for Bhutanese engineers. Health Education Expansion: KGUMSB plans a new MBBS campus at Gidakom to expand medical training as Bhutan prepares to graduate its first home-trained doctors in 2028. Regional Diplomacy & Culture: Bhutan began construction of its Nu.160m temple complex in Lumbini, reinforcing cultural ties and the global Buddhist pilgrimage hub. South Asia Governance Link: JICA reaffirmed support for Bhutan’s climate resilience, including improved meteorological observation and flood warning for Paro and Thimphu basins. Digital Payments Angle: India’s UPI went live in Greece, with Bhutan already listed among UPI partner countries—another signal of cross-border digital finance momentum.

Energy & Trade Policy: India hiked petrol export windfall tax to Rs 4/litre, cut diesel export duty to Rs 8.5/litre and ATF to Rs 7.5/litre from July 1, while keeping domestic fuel rates unchanged. Anti-Corruption & Governance: A Thimphu regional meeting on measuring anti-corruption effectiveness stressed that public trust matters as much as case outcomes; Bhutan’s Integrity Assessment also shows integrity is “Good” (score 8.16) but favouritism and trust deficits persist. Local Elections & Representation: With Thromde elections nearing, women are nearly 40% of Tshogpa/Thrompon candidates in Thimphu and Phuentshogling, but only one woman is running for Thrompon. Disaster Preparedness: A major earthquake simulation in Thimphu found gaps in coordination, communications, medical readiness and logistics, urging stronger systems and public awareness. Renewables & Cost of Living: Bhutan began implementing a Renewable Energy Tax Exemption Act (tax relief for approved renewables) and expanded GST exemptions on essentials, cutting the standard 5% GST on more household staples. Heritage & Culture: Bhutan launched its first four Geographical Indication products (Bumthang Yathra, Bumthang Honey, Dhur-Tandingang Gonthok, Merak-Sakteng Zoetey) to protect heritage and raise rural incomes; construction also began on a Bhutan temple complex in Lumbini. Power Infrastructure: DGPC, BPC and South Korea’s Hyosung signed an MoU to strengthen GIS maintenance and train Bhutanese engineers. Economy & Resources: Total mineral production hit 12 million MT in 2025, up sharply from 2023, with royalties and related revenues rising.

Lumbini Diplomacy & Religion: Bhutan has officially begun construction of a Nu.160 million temple complex in Lumbini, with a ground-breaking ceremony attended by Bhutan’s Home Affairs Minister Lyonpo Tshering and Nepal’s culture minister, reinforcing cultural and diplomatic ties. Climate-Resilient Planning: Phuentsholing is using a UNDP-supported geotechnical study (about USD 640,000) to identify safer areas for growth as landslides and flash floods intensify, with early focus on Pekarshing and Ammochhu. Education Reform: The MoESD says the Cambridge-aligned curriculum will be fully rolled out across secondary schools by 2027, shifting progression to competency-based assessment across two-year stages. Governance & Integrity: Bhutan’s National Integrity Assessment 2025 shows a strong overall score of 8.16/10, but ACC flags weakening internal control systems and a widening perception gap driven by favouritism and trust deficits. Disaster Preparedness: A full-scale Thimphu earthquake simulation found gaps in emergency coordination, communications, medical readiness, traffic management, and logistics—prompting calls for stronger equipment and standardized reporting. Local Elections & Gender: Women make up nearly 40% of Thromde election candidates, but only one woman is running for Thrompon in the capital’s southern counterpart, Phuentshogling. Energy & Cost of Living: The Renewable Energy Tax Exemption Act 2026 starts rolling out, while GST relief expands to more everyday staples and accessibility items, with retroactive application. Health Workforce: KGUMSB plans a new MBBS campus at Gidakom to prepare for Bhutan’s first home-trained doctors graduating in 2028, though accommodation constraints remain. Gelephu Momentum: Project 108’s crowdfunding has closed domestically with funding secured for 90 of 108 chortens, and GMC has launched a tourism investment drive inviting private investors.

Renewables Push: Bhutan’s Ministry of Finance has started implementing the Renewable Energy Tax Exemption Act of Bhutan 2026, rolling out time-bound tax breaks (including customs duty, excise tax and GST on direct inputs) to cut costs and speed up renewable projects toward 25 GW. Cost of Living Relief: After the GST Amendment Act of 2026, GST-registered businesses must stop charging the 5% GST on an expanded list of essentials, including key kitchen staples and disability-related welfare items, with the relief applied retroactively from the bill’s passage. Gelephu Investment Drive: The Gelephu Mindfulness City has launched a tourism investment programme, presenting a portfolio of 20 attractions and 20 activities and inviting private investors to shape a high-value, sustainable destination (with projects still conceptual and subject to feasibility work). Integrity Watch: The ACC’s National Integrity Assessment 2025 highlights a widening perception gap on corruption and warns that weakening internal control systems could erode trust over time, even as direct bribery remains uncommon. Disaster Preparedness: A major earthquake simulation in Thimphu found gaps in coordination, communication, manpower and equipment, pointing to the need for clearer reporting lines and better field-level readiness. Regional Links & Funding: India has released over 83% of its Nu 15 billion Economic Stimulus Programme to Bhutan, with the latest fifth tranche bringing total disbursement to Nu 12.5bn. Public Health & Safety: Bhutan marked the International Day Against Drug Abuse and Illicit Trafficking with a call for stronger, evolving responses to synthetic drugs and new trafficking methods. Sports Spotlight: Thimphu is set to host the 16th South Asian Bodybuilding Championship, with Bhutan fielding its largest-ever team.

Anti-Corruption Focus: Bhutan’s National Integrity Assessment 2025 warns corruption is increasingly “low-visibility” — favouritism, nepotism, conflicts of interest, reciprocal arrangements and informal influence — showing up in transfer-season requests, medical exceptions and procurement recommendations that often come as “harmless favours.” Urban Governance: The Election Commission of Bhutan has finalised the 2026 Thromde Elections roll and candidate list: 10,309 voters registered across Thimphu and Phuentshogling, with women forming the majority; campaigns run from 21 June until the no-campaign period begins 13 July, and Dhamngoi Zomdu has produced four Thrompon contenders and 14 Tshogpa candidates. Health System Upgrade: Thimphu’s Royal Centre for Infectious Diseases is ready to operate from next month, with an 80-bed capacity (100 in emergencies), negative-pressure isolation, and a research/training role, supported by Japan’s JICA. Energy Policy: Bhutan’s push for solar and renewables is paired with continued standby gas/oil capacity, while the government backs private investment and accelerates exploration to address long-standing energy shortages. Regional Links: Bhutan’s temple complex construction in Lumbini has begun, with Bhutan funding and a dzong-style design aimed at giving Bhutanese pilgrims a permanent spiritual home.

Thromde Elections: Bhutan’s Election Commission has finalised the 2026 Thromde Elections roll and candidate list, with 10,309 voters registered across Thimphu and Phuentshogling and women forming the majority of the electorate; postal voting applications were verified and the campaign is set to run ahead of the no-campaign period. Urban Governance: The ECB has also confirmed the Thrompon and Tshogpa contenders after Dhamngoi Zomdu processes, setting up a Thimphu–Phuentshogling contest that highlights a gender gap at the top municipal leadership level. Public Health Infrastructure: Bhutan’s Royal Centre for Infectious Diseases in Thimphu is ready to begin operations next month, with an 80-bed capacity and negative-pressure isolation for highly infectious diseases, plus a research and training role supported by JICA. Disaster Response & Connectivity: Heavy rain and flooding linked to Bhutan-triggered river surges have disrupted transport in India’s border belt, including washed-out bridges and road damage affecting access to schools and services. Regional Religious Diplomacy: Bhutan has begun construction of a Bhutan Temple Complex in Lumbini, Nepal, with a dzong-style design and a Nu 160 million government-funded project aimed at giving Bhutanese pilgrims a permanent spiritual home. Financial Regulation: Bhutan’s RMA has paused new insurance licensing for six months after a Financial Services Act amendment that will allow insurers to offer both life and general coverage under one company.

Thromde Elections: The Election Commission of Bhutan has released the final roll for the 2026 Thromde Elections, with 10,309 voters registered across Thimphu (9,159) and Phuentshogling (1,150), and confirmed postal voting approvals (95 approved out of 142 applications). Municipal Race Line-up: ECB has also finalised candidates: four Thrompon contenders (two each for Thimphu and Phuentshogling) and 14 Tshogpa candidates, following Dhamngoi Zomdu processes. India–Bhutan Education Ties: India’s Education Minister met Bhutan’s education counterpart to deepen cooperation on teacher training, vocational skilling, digital learning and AI, alongside shared cultural links. Lumbini Bhutan Project: Bhutan and Nepal began construction of a Bhutan Temple Complex in Lumbini, with a Bhutan-led delegation and Nepal’s Lumbini Development Trust chair attending; a monastery foundation stone was also laid in separate reporting. Digital/Policy Watch: Bhutan’s National Integrity Assessment 2025 says bribery remains rare, but concerns are shifting toward favouritism and personal connections. Regional Context: World Bank approved $1.1bn emergency financing for Bangladesh to protect food security amid fertilizer and fuel price shocks—an economic pressure point for South Asia.

Thromde Elections: Bhutan’s Election Commission has released the final electoral roll for the 2026 Thromde Elections, with 10,309 voters registered—9,159 in Thimphu Thromde and 1,150 in Phuentshogling—plus postal voting verification results (95 approved, 47 rejected). Municipal Candidate Line-up: The ECB has finalised candidates for the Thrompon and Tshogpa posts after Dhamngoi Zomdu, setting four Thrompon contenders and 14 Tshogpa candidates, with women stronger at the Tshogpa level than in the Thrompon race. Digital Governance & Youth Safety: Viral school bullying videos have sparked national outrage, police investigations, and renewed calls for stronger anti-bullying rules and digital safeguards as Bhutan’s connectivity expands. Integrity Watch: Bhutan’s National Integrity Assessment 2025 reports high service integrity and very low bribery, but rising public concern about favouritism and personal connections influencing decisions. India-Bhutan Economic Ties: India has disbursed the fifth Rs 250 crore tranche under its Economic Stimulus Programme, completing Rs 1,250 crore in total support. Cultural Diplomacy: Bhutan has laid the foundation stone for a Bhutanese monastery in Lumbini, aimed at strengthening Bhutan-Nepal cultural and diplomatic links. Regional Context: World Bank approved $1.1B emergency financing for Bangladesh to protect food security amid fertilizer and fuel price shocks.

India-Bhutan Economic Stimulus: India has handed Bhutan the fifth tranche of INR 250 crore for the Economic Stimulus Programme, bringing total disbursed support to INR 1,250 crore out of the committed INR 1,500 crore, with the funds credited to post-pandemic recovery and jobs across farmers, students, youth, SMEs, startups, and tourism. Digital Society & Youth Safety: Viral school-bullying videos in Thimphu have sparked police and education probes, reigniting debate over cyberbullying, online harassment, and the need for stronger safeguards as Bhutan’s digital transition accelerates. Integrity Watch: Bhutan’s National Integrity Assessment 2025 reports an improved integrity score (8.01 in 2022 to 8.16 in 2025), with bribery still rare but growing worries about favouritism and personal connections shaping decisions. Disaster Preparedness: A full-scale earthquake simulation in Thimphu found gaps in coordination, communications, and emergency readiness, even as the overall response was judged successful. Urban Resilience: Thimphu Thromde is moving ahead with a revitalisation plan for the Memorial Chorten stream corridor, aiming for greener public spaces and better pedestrian access alongside disaster resilience.

India-Bhutan Education Ties: India’s Education Minister Dharmendra Pradhan met Bhutan’s Minister of Education and Skills Development Yeezang De Thapa to deepen cooperation on teacher training, vocational skilling, digital learning and AI, alongside shared cultural links. Economic Stimulus in Focus: India handed Bhutan the fifth tranche of INR 250 crore (Nu 2.5bn) under the Economic Stimulus Programme, bringing total disbursed support to INR 1,250 crore toward a committed INR 1,500 crore, with officials citing impacts on farmers, youth, SMEs and digital skilling. Digital Governance Pressure: Viral school-bullying videos in Thimphu have triggered police and education probes and renewed calls for stronger anti-bullying rules, digital literacy and safeguards as Bhutan’s digital transition accelerates. Integrity Watch: Bhutan’s National Integrity Assessment 2025 reports improved integrity scores but rising public concern about favouritism and personal connections, even as bribery remains rare. Courtroom Developments: In Nepal’s Bhutanese refugee case, lawyers for former Home Minister Balkrishna Khand argued against treason charges tied to alleged record-keeping of refugees.

India–Bhutan Economic Stimulus: India has released the fifth tranche of ₹250 crore (Nu 2.5bn) to Bhutan’s Economic Stimulus Programme, bringing total support to ₹1,250 crore, with the Embassy handing over the cheque in Thimphu and Bhutan’s FM citing benefits for farmers, students, youth, SMEs, startups, creative industries, and tourism. Digital Society & Schools: Viral bullying videos from Thimphu’s Lungtenzampa Middle Secondary School have sparked police and education probes, suspensions, and calls from the National Commission for Women and Children to stop sharing footage—raising questions about youth conduct and digital responsibility. Disaster Preparedness: A full-scale Thimphu earthquake simulation found gaps in coordination, communications, and emergency readiness, including delays in activation, weak reporting lines, equipment shortages, and vulnerabilities at the National Referral Hospital. Urban Resilience Upgrade: Thimphu Thromde is moving ahead with the Memorial Chorten stream corridor revitalisation plan—aiming for greener public spaces and improved pedestrian access while reducing flood and environmental risks. Digital Transformation Push: Bhutan’s State of the Nation report says the digital economy is creating jobs and income, highlighting progress on the National Digital Identity system and plans to expand digital economy efforts in 2026–27. Wildlife Enforcement: Assam released seven rescued golden langurs back into the wild after an STF bust in Chirang, underscoring that trafficking pressure remains despite the conservation win.