President of ABCSI Highlights Key Concerns, Opportunities for Growth and Supportive Policies

The Association of Bhutan Cottage and Small Industries (ABCSI) held a significant meeting with the Prime Minister on July 14th to discuss the challenges faced by the cottage and small industries (CSI) sector, explore growth opportunities, and chart a way forward.

During the meeting, President Sonam Chophel of ABCSI highlighted pressing issues, while a recent survey conducted by founding members of ABCSI revealed potential avenues for development and the need for supportive policies.

President Sonam Chophel drew attention to several significant challenges confronting the CSI sector, including intense competition from imported goods, limited market access, small domestic markets, a low economy of scale and scope, limited technology adoption, a lack of infrastructure/high export barriers, supply chain inefficiencies, a shortage of financial resources, high logistics costs, and the ongoing need for post-pandemic recovery.

Of particular concern was the heightened competition from imported goods faced by domestic cottage and small industries. President Chophel stressed the urgency of developing strategies to enhance the competitiveness of local products and shield them from unfair competition. Limited market access and small domestic markets were also identified as obstacles to the growth potential of CSI businesses.

“The lack of economies of scale and scope emerged as a persistent challenge for the CSI sector,” President Chophel said adding that the need for collective efforts to overcome this hurdle, encouraging collaboration, fostering partnerships, and creating platforms for networking and knowledge sharing among entrepreneurs.

Complementing these insights, the recent survey conducted by founding members of ABCSI unveiled additional opportunities for growth and supportive policies. The survey highlighted the need for establishing similar concepts to CSI Markets beyond Bhutan, such as in the BIMTSE and SAARC regions. This expansion would provide broader market access and facilitate the export of local products.

The survey also indicated a demand for the establishment of startup centers in other dzongkhags, extending the tenure of these centers to 5 years instead of 2, offering affordable land lease options, and implementing tax incentives to encourage startups. To protect local industries, the imposition of standards and certifications for imported goods, as well as increased taxes on direct competitors of local products, were proposed.

Recognizing the importance of promoting local products, the survey called for standardizing local products through certification and establishing regular platforms, forums, and campaigns to promote and showcase local offerings.

The meeting between ABCSI and the Prime Minister served as a vital platform for sharing concerns, exploring opportunities, and developing a way forward for the CSI sector. The insights provided by President Sonam Chophel, along with the findings of the founding members, will contribute to the formulation of policies and initiatives aimed at addressing challenges and unlocking the immense potential of Bhutan’s cottage and small industries.

By Kinley Yonten