Indo- Bhutan Trade: SAFTA and Beyond Dr. Madaan Davinder K.*, Singh Harjeet** *Professor, Regional Centre, Bathinda, India **Research Scholar, Punjabi University, Patiala, India Online published on 6 August, 2014. Abstract India is a very big country and Bhutan is very small one. Both countries have good political and economic relations from deep past. Bhutan, being a land locked country, is very much dependent on India. About 80 per cent of its trade is with India and all of its five year plans are heavily financed by latter. On the other part, India's dependency on Bhutan is quite less. Bhutan's share in India's total trade is 0.05 per cent. Despite of this fact, Bhutan is strategically important for India. It is well known fact that India's entire border with China is vulnerable. Hence Bhutan's strategic location is a safeguard for India against any aggression or encroachment by China. Having good relations with Bhutan through trade, aid or other ways will be strategically important for India. India and Bhutan are founder members of SAARC, established in 1985. Since establishment of SAARC, trade has got big boost in this region. Signing of free trade agreement in 2006 creates new opportunities of trade, investment and joint ventures among member nations. It is very important to analyze the impact of SAFTA on trade among SAARC nations. In this paper our focus is to analyze the impact of SAFTA on bilateral trade between India and Bhutan, in terms of volume, trade intensity, composition and direction of trade. The comparative analysis of trade between two countries is made during pre-SAFTA (1995–05) and post-SAFTA (2006–12) periods. Top Keywords SAFTA. Top |