Q.6. What is Bhutan’s plan for regional economic hub at Gelephu? In what manner is Assam going to be benefitted by this hub ?
03,Oct 2024
Posted By : SPM IAS Academy
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Gelephu, a key town in southern Bhutan near the Assam border, is being developed as a regional economic hub with the aim of boosting trade, tourism, manufacturing, and connectivity. This ambitious plan is part of Bhutan’s efforts to strengthen its economy and enhance its ties with India and the Association of Southeast Asian Nations (ASEAN), aligning with the broader frameworks of South-South Cooperation and India’s Act East Policy.
Key elements of the plan include:
A. Gelephu Smart City:
Bhutan is developing Gelephu as a Smart City, focused on integrating sustainable urban planning, digital infrastructure, and green technology. The initiative aims to create an industrial and trade hub, promoting smart governance and sustainable economic growth. Smart city development is expected to transform Gelephu into a digital and industrial hub in southern Bhutan.
Bhutan’s 12th Five Year Plan (2018-2023) identified the development of southern border towns, including Gelephu, as a priority to enhance regional trade and economic integration.
B. Trade and Industrial Development:
Gelephu will serve as a transit hub for goods flowing between Bhutan and India, particularly Assam. The industrial park planned for Gelephu is expected to attract investments in light manufacturing, agriculture-based industries, and green energy.
Bhutan exported goods worth $1.27 billion in 2021, with India being its largest trading partner, accounting for 79% of Bhutan’s total trade. Developing Gelephu into a regional hub is likely to further increase Bhutan-India trade volumes, benefitting Assam directly.
C. ASEAN Connectivity:
Bhutan envisions Gelephu as a strategic gateway for expanding trade with ASEAN nations by leveraging its proximity to Assam and linking to India’s Act East Policy. Improved infrastructure at Gelephu can create better access to ASEAN markets via Assam’s airports and highways, making Bhutan a regional player in Southeast Asian trade.
India’s trade with ASEAN reached $96.7 billion in 2021-22. Gelephu’s development will help Bhutan tap into this expanding trade network, creating more opportunities for Assam to act as a logistics hub.
D. South-South Cooperation:
Bhutan’s development of Gelephu is aligned with the South-South Cooperation framework, aiming to promote economic collaboration, capacity building, and technology transfer between developing nations. The hub could serve as a model for cooperation among other South Asian and Southeast Asian nations, positioning Bhutan and Assam at the heart of regional development.
Benefits to Assam from the Gelephu Economic Hub
A. Boost to Trade and Commerce:
Gelephu’s proximity to Assam provides a significant opportunity for cross-border trade. Assam’s businesses can leverage the hub for exporting agricultural products, handicrafts, and textiles to Bhutan and beyond. Additionally, the import of Bhutanese hydropower and organic products will benefit Assam’s economy.
Assam’s exports, including tea and spices, have grown steadily, with tea alone contributing to 15% of India’s tea exports. Gelephu can serve as a key transit point for Assam’s exports to Southeast Asian markets, increasing trade volumes.
B. Improved Connectivity and Infrastructure:
Gelephu’s development includes improved road networks and the proposed Gelephu Airport, which will enhance connectivity between Assam, Bhutan, and neighboring regions. This infrastructure development will reduce transportation costs and enhance trade efficiency.
India has been investing in North-East infrastructure, including the Bharatmala Pariyojana, to improve connectivity with Bhutan and Southeast Asia. This infrastructure push can facilitate greater economic integration between Assam and Bhutan through Gelephu.
C. Tourism Growth:
The Gelephu hub will also act as a gateway for cross-border tourism between Bhutan and Assam, attracting international tourists. Tourism circuits that link Bhutanese attractions with Assam’s natural and cultural heritage sites, such as Kaziranga National Park and Manas National Park, will boost tourism revenues.
Assam received 6.1 million domestic tourists and 31,739 foreign tourists in 2019. By integrating Gelephu into regional tourism packages, these numbers could see a substantial increase, benefiting the hospitality and tourism sectors.
D. Employment Opportunities and Skill Development:
The establishment of industries in Gelephu’s industrial park and smart city will generate employment for the local population in Assam. Industries such as manufacturing, logistics, and technology will offer jobs to Assamese workers, while skill development programs will help upgrade the skills of Assam’s workforce to meet the demands of modern industries.
Assam’s unemployment rate stood at 7.4% in 2021. The new job opportunities created by Gelephu’s economic activities can help lower this rate and improve livelihoods in the region.
E. Energy Security and Green Initiatives:
Bhutan’s hydropower exports through Gelephu will bolster Assam’s energy security by providing a renewable energy source. Additionally, the Smart City’s focus on green infrastructure will promote sustainable development in the region, with Assam benefiting from technology transfer and green collaborations.
Bhutan is a major exporter of hydropower to India, contributing 1,616 MW annually. Gelephu’s hub can increase this energy exchange, supporting Assam’s growing demand for clean energy.
F. Enhanced Regional Diplomacy:
Gelephu’s economic integration with Assam can strengthen regional diplomacy and cooperation under frameworks like South-South Cooperation and ASEAN engagement. This will boost Assam’s regional standing, positioning it as a key partner in India’s outreach to Bhutan and Southeast Asia.
India’s North-East, with Assam at its core, has a vital role in the Act East Policy, which aims to promote economic and strategic ties with ASEAN. Gelephu can act as a facilitator for Assam’s greater engagement in regional economic initiatives.
The development of Gelephu as a regional economic hub offers numerous opportunities for both Bhutan and Assam. By enhancing trade, connectivity, tourism, and industrial growth, Gelephu’s transformation into a Smart City and regional transit hub will provide significant economic benefits to Assam. The integration of Gelephu into ASEAN trade routes, its focus on green development, and the alignment with South-South Cooperation frameworks will strengthen Assam’s position in regional diplomacy and economic competitiveness, making it a vital player in the broader South Asian and Southeast Asian growth story.