Bhutan Rejects India’s MV Agreement

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India’s plan for a Motor Vehicles Agreement (MVA) among the BBIN countries (Bangladesh, Bhutan, India and Nepal) has received a jolt, with Bhutan refusing to ratify the pact.

The pact seeks to achieve seamless movement of cargo containers, trucks and passenger vehicles within these countries across the international borders, was signed in the Bhutanese capital of Thimpu last year.

However, on November 15, Bhutan’s upper house, the National Council, rejected its ratification. While 13 votes were against the move, two were in favour and five members abstained from voting.

Bhutan and India allow free movement of vehicles across their border.

Pakistan refused to sign a similar agreement among South Asian countries under the SAARC framework in 2015.

Why Bhutan Rejected it ?

According to Bhutan’s lawmakers, the BBIN MVA is not much of help to Bhutan in economic development. Bhutan is more concerned about the environment.

Implications:

If the agreement fails to get implemented, sub-regional trade will continue to suffer high transaction costs, and it may impact other sub-regional programmes on energy, social projects and infrastructure.

Options Now:

India is now exploring various options to operationalise the agreement.

India has also asked the Bhutanese government to reconsider the pact later, it when there is a joint session of both the houses. The lower house, National Assembly, has cleared the pact. However, the reconsideration can be done only after a year, as per the procedure there.

Solution:

The pact can be amended with environmental safeguards, as there is a provision for that. Post that it can be resubmitted to both the houses of Bhutan’s parliament and also to the rest of the BBIN countries’ parliaments for ratification.

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