The economy of Bhutan is based on agriculture and is one of the smallest in the world. Almost 60% of the population is involved in agriculture industry. The people of Bhutan practice subsistence farming with rest of the basic necessities imported from India.

However, the main source of revenue for the economic growth comes from the hydropower sector. This is advantage Bhutan has with its many river sources.

The second highest revenue generating sector is tourism. Yes, you are one of the potential tourist who will be contributing to the growth of economy of Bhutan. The tourism sector is controlled through careful policy of allowing only limited number of tourists in the country.

Bhutan’s economy is also bolstered through trade relations with India and other neighboring countries. In fact the Bhutanese economy is aligned with India with its currency, Ngultrum (Nu), pegged at equal value with Indian Rupees (INR). Bhutan is also member to many international and regional trade cooperation like South Asian Free Trade Association (SAFTA) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

Bhutan imports mostly from India. In fact Bhutan imports more than what it exports. Therefore, the economy struggles with the increasing trade deficits.

Despite such economic realities, the Royal Government of Bhutan invests heavily on the welfare of the people. The basic foundations of the economic growth like education and healthcare of the population are provided free of cost.

The development of the country is done through the five year plans. This development plan is based on the Bhutan’s unique philosophy of development called Gross National Happiness (GNH) which is propounded by the country’s visionary Fourth King Jigme Singye Wangchuck. Each development program is carefully designed to protect its rich environment and culture and traditions.

GNH philosophy is about creating enabling conditions to foster happiness and wellbeing of the people. It has been developed into a scientific model with four pillars and nine domains supported by some 32 indicators. You can read about GNH under our GNH tour plans.

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