New Delhi: After Sri Lanka and Pakistan, the economic situation of India’s neighbouring country Bhutan has become very complicated. Foreign exchange reserves have fallen to record lows. As a result, the Bhutanese government has banned the import of all types of vehicles except utility vehicles, heavy earthmoving machines and agricultural equipment.
The total population of this country between India and China is about 8 lakhs. However, due to the Russia-Ukraine war, the prices of crude oil and food products have increased in the international market. Along with this, the country has imposed restrictions on the arrival of foreign tourists for the last two years, moving towards a zero-covid policy. Due to this, it is difficult to get foreign currency to the country. As of April last year, Bhutan’s foreign exchange reserves stood at US$1.46 billion. But by December, it had reduced to 970 million US dollars. This is according to a report published by the Royal Monetary Authority of Bhutan last month.
In view of this, the Ministry of Finance of the country has issued a notification of restrictions on the import of vehicles. Along with this, the lanes to be used for the promotion of tourism will also be kept free from restrictions.
Such measures have been taken in view of ensuring that sufficient funds remain in the country’s treasury to maintain stability in the Bhutanese economy. According to a report published in a local newspaper, in the first six months of 2022, Bhutan has imported more than 8,000 vehicles. This has been cited as a major reason for the decline in foreign exchange reserves. Bhutan’s constitution requires the country to hold foreign currency to cover at least 12 months of imports.