In a significant development aimed at strengthening regional trade and food security, the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry issued Notification No. 36/2025-26 on 3rd October 2025, granting immediate exemption from export restrictions and prohibitions on a wide range of agricultural commodities exported to Bhutan.
This move is a strategic policy decision under the Foreign Trade (Development & Regulation) Act, 1992, in conjunction with Foreign Trade Policy (FTP) 2023, aimed at reinforcing India’s special relationship with Bhutan while ensuring regional food stability.
Key Takeaways from the Notification
- Exemptions from Export Restrictions
- A wide variety of agricultural commodities—including milk, onions, rice, wheat, sugar, edible oils, and lentils—are now exempt from all restrictions and prohibitions when exported to Bhutan.
- These exemptions apply with immediate effect and until further orders.
- Comprehensive List of Commodities Covered
- The list spans 23 categories and over 100 HS Codes, including:
- Milk and dairy products (skimmed milk, baby food, cream)
- Vegetables (onions, potatoes, tomatoes, lentils)
- Grains and cereals (rice, wheat, flour)
- Edible oils (soybean, groundnut, palm, sunflower, mustard)
- Sweeteners (sugar, molasses)
- Essential items like salt
- Special Bilateral Provision
- The exemption is exclusive to Bhutan, highlighting the deep bilateral economic and cultural ties shared between the two countries.
- It also demonstrates India’s commitment to being a reliable trade partner in the region, especially for landlocked neighboring nations.
Why This Matters
In recent years, India has imposed temporary export restrictions on essential food commodities like onions, rice, and sugar to ensure domestic availability and control inflation. These restrictions, while necessary domestically, have occasionally impacted neighboring countries like Bhutan, Nepal, and Bangladesh, which rely heavily on Indian agricultural exports.
This notification makes a clear distinction: while restrictions may apply globally, Bhutan is exempt, reflecting India’s “Neighbourhood First” policy in action.
For Bhutan, this exemption:
- Ensures uninterrupted supply of key food and dairy products.
- Helps stabilize domestic prices and prevent shortages.
- Strengthens food security through predictable trade access.
For Indian exporters:
- Provides certainty and open market access for agricultural exports to Bhutan.
- Encourages growth in bilateral trade volumes.
- Helps farmers and food processors tap into consistent demand in a close and friendly market.
Implications Going Forward
This exemption not only reaffirms India’s commitment to Bhutan but also sets a precedent for flexible, region-specific trade policies during times of global or national supply constraints. It also positions India as a trusted regional supplier, boosting its soft power and diplomatic ties in South Asia.
However, clarity on the duration of the exemption and customs procedures at border checkpoints will be important to ensure seamless implementation. Exporters are encouraged to stay updated via the DGFT website and consult updated versions of the ITC (HS) Export Schedule.
Conclusion
The DGFT’s Notification No. 36/2025-26 is a timely, strategic, and humanitarian trade policy decision that recognizes Bhutan’s dependence on Indian agricultural exports and acts to shield it from the ripple effects of global food supply restrictions. It’s a win-win for bilateral relations, regional trade, and India’s agricultural economy.