/ Kingdom of Bhutan
Overview
Bhutan is a landlocked country located in the Eastern Himalayas of South Asia, situated between China to the north and India to the south. It covers a total land area of approximately 38,394 square kilometers and has an estimated population of 802,214 as of February 2026. The country is a constitutional monarchy administratively divided into 20 districts, known as Dzongkhags, with Thimphu serving as its capital and largest city.
In 2025, the GDP reached approximately US$3.3 billion, and per capita GDP was US$4,130. Bhutan's economy is increasingly driven by the service sector, which accounts for c.48.5% of its GDP, including tourism, transport, and communication. Government expenditure and large-scale hydropower projects are the primary drivers of economic growth. The country’s economy is deeply integrated with India, which serves as its largest trading partner and provider of development assistance. Its largest trading partners are India, Bangladesh, China, Singapore, and Thailand. Bhutan is a major producer of hydroelectricity, which is its primary export, followed by ferrosilicon, ferro-silico-manganese, dolomite, and cement. The construction of the "Gelephu Mindfulness City" and new hydropower plants like Punatsangchhu-II are expected to be major future growth drivers. Additionally, the tourism sector, operating under a "high value, low volume" model, contributed c.12% to the GDP in 2025 with arrivals reaching over 209,000. The country's industrial sector (including mining and power) represents approximately 41.2% of its GDP, while the agricultural sector accounts for c.10.3% of GDP and employs about 41% of the total labor force of 312,000. Imports of refined petroleum, digital processing units, and rice are among the highest in the country, with top import partners being India, China, and Singapore.
Bhutan has a distinct history, having remained independent throughout its existence despite being located between two giants. The nation was unified in the early 17th century by Ngawang Namgyal and transitioned from an absolute monarchy to a constitutional monarchy in 2008. Bhutan is globally unique for its development philosophy of Gross National Happiness (GNH), which prioritizes spiritual and environmental well-being over purely material growth, and it remains the world’s first carbon-negative country.
