The Cabinet, during its meeting on 10 June 2026, approved the Thailand–Bhutan Free Trade Agreement, to be submitted to Parliament for consideration under Section 178 of the Constitution of Thailand by the Ministry of Commerce.

The draft Thailand-Bhutan FTA was signed in December 2025, after the Thailand-Bhutan Joint Trade Committee at the ministerial level had concluded negotiations on the FTA, aimed at liberalizing and facilitating trade, reducing trade barriers, and promoting economic cooperation and other related issues between the two countries. 

The FTA also covers Bhutan's Gelephu Mindfulness City, a new special administrative and economic zone, and it will establish clear, mutually beneficial trade rules, while serving as a major mechanism to advance bilateral trade in the long run.

Thailand and Bhutan have set a target for the enforcement of the FTA by 1 January 2027. As for market access, Bhutan will exempt customs duties on Thai products up to 99.8 percent of all product items. Thailand will open its market to Bhutanese products covering 94 percent of product items.

Thai goods that are expected to benefit from more exports to Bhutan include automobiles and automotive parts, textiles, garments, chemicals, rubber and plastic products, and electrical appliances. They also cover agricultural and food products, such as dried fruit, fruit juices, instant noodles, and processed foods. In addition, Thai entrepreneurs will have more alternative sources of raw materials from Bhutan, including minerals, cordyceps, matsutake mushrooms, and temperate-climate fruits, such as apples.

Based on economic impact studies, the Thailand–Bhutan FTA is expected to increase Thailand’s economic growth by between 0.02 and 0.03 percent a year, or about 4.13-4.34 billion baht. Thai exports to Bhutan are likely to increase by 229-266 percent annually, or 12.4-14.4 billion baht. Foreign direct investment in Thailand is also expected to rise by 0.05-0.06 percent a year, or about 1.79-1.99 billion baht. 

In this regard, although the Government would lose customs revenue of 215,696 baht per year, the economic benefits to Thailand are expected to far outweigh the revenue loss.

The Cabinet was told that the Thailand–Bhutan FTA marked a significant step for the expansion of Thai exports to South Asia, while creating new opportunities for Thai entrepreneurs, enhancing Thailand’s competitiveness, and strengthening Thai-Bhutanese relations.