Thailand and Bhutan have signed a free trade agreement (FTA) to promote mutual trade cooperation and strengthen their economic ties.

The signing ceremony took place as Bhutanese Prime Minister Tshering Tobgay visited Bangkok last week to attend the 6th BIMSTEC Summit.

With bilateral trade exceeding 460 million baht, Tobgay told Thai PBS World that the FTA would further reinforce economic relations.

“As Bhutan and Thailand already share close relations through people-to-people ties, government-to-government collaborations, and, most importantly, the friendship between our royal families, the free trade agreement will continue to enhance our trade cooperation,” he said.

Tobgay added that as a small, landlocked country, Bhutan sees the FTA as a vital step to deepen integration with other nations.

Aligned with Thailand’s push to promote regional connectivity at the Summit, Bhutan hopes to work with Thailand and other BIMSTEC member states to attract investment to its upcoming Gelephhu Mindfulness City—an urban development project focused on climate resilience and environmental sustainability.

Tobgay also addressed global uncertainties driven by the policies of former US President Donald Trump, noting that some BIMSTEC members are facing high trade tariffs. He said these economic pressures could serve as a catalyst for accelerating regional FTA discussions.

“U.S. tariff policy is an opportunity for us. The changing geopolitical environment is an impetus to move faster toward economic integration in the BIMSTEC region. What’s happening globally can speed up negotiations,” Tobgay said.

By Franc Han Shih, Thai PBS World