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Bhutan vs. India

Economy

BhutanIndia
Economy - overview

Bhutan's small economy is based largely on hydropower, agriculture, and forestry, which provide the main livelihood for more than half the population. Because rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive, industrial production is primarily of the cottage industry type. The economy is closely aligned with India's through strong trade and monetary links and is dependent on India for financial assistance and migrant laborers for development projects, especially for road construction. Bhutan signed a pact in December 2014 to expand duty-free trade with Bangladesh.

Multilateral development organizations administer most educational, social, and environment programs, and take into account the government's desire to protect the country's environment and cultural traditions. For example, the government is cautious in its expansion of the tourist sector, restricing visits to environmentally conscientious tourists. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment.

Bhutan's largest export - hydropower to India - could spur sustainable growth in the coming years if Bhutan resolves chronic delays in construction. Bhutan's hydropower exports comprise 40% of total exports and 25% of the government's total revenue. Bhutan currently taps only 6.5% of its 24,000-megawatt hydropower potential and is behind schedule in building 12 new hydropower dams with a combined capacity of 10,000 megawatts by 2020 in accordance with a deal signed in 2008 with India. The high volume of imported materials to build hydropower plants has expanded Bhutan's trade and current account deficits. Bhutan also signed a memorandum of understanding with Bangladesh and India in July 2017 to jointly construct a new hydropower plant for exporting electricity to Bangladesh.

India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less than half of the workforce is in agriculture, but services are the major source of economic growth, accounting for nearly two-thirds of India's output but employing less than one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers. Nevertheless, per capita income remains below the world average. India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged nearly 7% per year from 1997 to 2017.

India's economic growth slowed in 2011 because of a decline in investment caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about slow world growth. Investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee. Growth rebounded in 2014 through 2016. Despite a high growth rate compared to the rest of the world, India's government-owned banks faced mounting bad debt, resulting in low credit growth. Rising macroeconomic imbalances in India and improving economic conditions in Western countries led investors to shift capital away from India, prompting a sharp depreciation of the rupee through 2016.

The economy slowed again in 2017, due to shocks of "demonetizaton" in 2016 and introduction of GST in 2017. Since the election, the government has passed an important goods and services tax bill and raised foreign direct investment caps in some sectors, but most economic reforms have focused on administrative and governance changes, largely because the ruling party remains a minority in India's upper house of Parliament, which must approve most bills.

India has a young population and corresponding low dependency ratio, healthy savings and investment rates, and is increasing integration into the global economy. However, long-term challenges remain significant, including: India's discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, high spending and poorly targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration.

GDP (purchasing power parity)$9.029 billion (2019 est.)

$8.561 billion (2018 est.)

$8.307 billion (2017 est.)

note: data are in 2017 dollars
$9,155,083,000,000 (2019 est.)

$8,787,694,000,000 (2018 est.)

$8,280,935,000,000 (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate7.4% (2017 est.)

7.3% (2016 est.)

6.2% (2015 est.)
4.86% (2019 est.)

6.78% (2018 est.)

6.55% (2017 est.)
GDP - per capita (PPP)$11,832 (2019 est.)

$11,348 (2018 est.)

$11,142 (2017 est.)

note: data are in 2017 dollars
$6,700 (2019 est.)

$6,497 (2018 est.)

$6,186 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 16.2% (2017 est.)

industry: 41.8% (2017 est.)

services: 42% (2017 est.)
agriculture: 15.4% (2016 est.)

industry: 23% (2016 est.)

services: 61.5% (2016 est.)
Population below poverty line8.2% (2017 est.)21.9% (2011 est.)
Household income or consumption by percentage sharelowest 10%: 2.8%

highest 10%: 30.6% (2012)
lowest 10%: 3.6%

highest 10%: 29.8% (2011)
Inflation rate (consumer prices)5.8% (2017 est.)

7.6% (2016 est.)
3.7% (2019 est.)

3.9% (2018 est.)

3.3% (2017 est.)
Labor force397,900 (2017 est.)

note: major shortage of skilled labor
521.9 million (2017 est.)
Labor force - by occupationagriculture: 58%

industry: 20%

services: 22% (2015 est.)
agriculture: 47%

industry: 22%

services: 31% (FY 2014 est.)
Unemployment rate3.2% (2017 est.)

3.2% (2016 est.)
8.5% (2017 est.)

8.5% (2016 est.)
Distribution of family income - Gini index37.4 (2017 est.)

38.1 (2007)
35.7 (2011 est.)

37.8 (1997)
Budgetrevenues: 655.3 million (2017 est.)

expenditures: 737.4 million (2017 est.)

note: the Government of India finances nearly one-quarter of Bhutan's budget expenditures
revenues: 238.2 billion (2017 est.)

expenditures: 329 billion (2017 est.)
Industriescement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourismtextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals
Industrial production growth rate6.3% (2017 est.)5.5% (2017 est.)
Agriculture - productsmilk, rice, maize, potatoes, roots/tubers, oranges, areca nuts, chillies/peppers, spices, gingersugar cane, rice, wheat, buffalo milk, milk, potatoes, vegetables, bananas, maize, mangoes/guavas
Exports$554.6 million (2017 est.)

$495.3 million (2016 est.)
$572.073 billion (2019 est.)

$564.165 billion (2018 est.)

$509.661 billion (2017 est.)
Exports - commoditiesiron alloys, dolomite, refined iron, cement, silicon carbides (2019)refined petroleum, diamonds, packaged medicines, jewelry, cars (2019)
Exports - partnersIndia 94% (2019)United States 17%, United Arab Emirates 9%, China 5% (2019)
Imports$1.025 billion (2017 est.)

$1.03 billion (2016 est.)
$624.314 billion (2019 est.)

$656.529 billion (2018 est.)

$575.121 billion (2017 est.)
Imports - commoditiesrefined petroleum, iron products, delivery trucks, cars, wood charcoal (2019)crude petroleum, gold, coal, diamonds, natural gas (2019)
Imports - partnersIndia 85%, Thailand 5% (2019)China 15%, United States 7%, United Arab Emirates 6%, Saudi Arabia 5% (2019)
Debt - external$2.671 billion (31 December 2017 est.)

$2.355 billion (31 December 2016 est.)
$555.388 billion (2019 est.)

$518.34 billion (2018 est.)
Exchange ratesngultrum (BTN) per US dollar -

64.97 (2017 est.)

67.2 (2016 est.)

67.2 (2015 est.)

64.15 (2014 est.)

61.03 (2013 est.)
Indian rupees (INR) per US dollar -

73.565 (2020 est.)

71.05 (2019 est.)

70.7675 (2018 est.)

64.152 (2014 est.)

61.03 (2013 est.)
Fiscal year1 July - 30 June1 April - 31 March
Public debt106.3% of GDP (2017 est.)

114.2% of GDP (2016 est.)
71.2% of GDP (2017 est.)

69.5% of GDP (2016 est.)

note: data cover central government debt, and exclude debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
Reserves of foreign exchange and gold$1.206 billion (31 December 2017 est.)

$1.127 billion (31 December 2016 est.)
$409.8 billion (31 December 2017 est.)

$359.7 billion (31 December 2016 est.)
Current Account Balance-$547 million (2017 est.)

-$621 million (2016 est.)
-$29.748 billion (2019 est.)

-$65.939 billion (2018 est.)
GDP (official exchange rate)$2.405 billion (2017 est.)$2,835,927,000,000 (2019 est.)
Ease of Doing Business Index scoresOverall score: 66 (2020)

Starting a Business score: 86.4 (2020)

Trading score: 94.2 (2020)

Enforcement score: 70 (2020)
Overall score: 71 (2020)

Starting a Business score: 81.6 (2020)

Trading score: 82.5 (2020)

Enforcement score: 41.2 (2020)
Taxes and other revenues27.2% (of GDP) (2017 est.)9.2% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-3.4% (of GDP) (2017 est.)-3.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 10.7%

male: 8.2%

female: 12.7% (2015 est.)
total: 22.3%

male: 21.9%

female: 23.8% (2019 est.)
GDP - composition, by end usehousehold consumption: 58% (2017 est.)

government consumption: 16.8% (2017 est.)

investment in fixed capital: 47.2% (2017 est.)

investment in inventories: 0% (2017 est.)

exports of goods and services: 26% (2017 est.)

imports of goods and services: -48% (2017 est.)
household consumption: 59.1% (2017 est.)

government consumption: 11.5% (2017 est.)

investment in fixed capital: 28.5% (2017 est.)

investment in inventories: 3.9% (2017 est.)

exports of goods and services: 19.1% (2017 est.)

imports of goods and services: -22% (2017 est.)
Gross national saving19.2% of GDP (2019 est.)

21.7% of GDP (2018 est.)

27.9% of GDP (2017 est.)
29.1% of GDP (2019 est.)

31.1% of GDP (2018 est.)

31.4% of GDP (2017 est.)

Source: CIA Factbook