i.                      Identify key challenges faced by Bhutan Frro Alloys Limited(BFAL)

1.       Market Access

According to Kenton (2019), market access refers to the ability of a company or country to sell goods and services across borders. The ability to sell in a market is often accompanied by tariffs, regulations, and barriers such as import duties, quotas, and standards that affect how easily a product can enter and compete in that market.

Market Access Challenges of BFAL

a.     Tariff

Some countries impose import duties or taxes on ferro alloys, which makes BFAL’s products more expensive in foreign markets. As BFAL exports most of products to India current tariff rate according to HS Code 7202 to Import Duty On- Ferro alloys Ferro-manganese it includes 5% basic Duty, 18% IGST, and 10% Social welfare surcharge(Customs Duty | Import Export Custom Duty India | Customs Tarif, n.d.). But India adjusts its import duties from time to time depending on its domestic supply and demand. Thus, the fluctuations in tariff make Bhutan Ferro Alloys Ltd. (BFAL)’s exports vulnerable to sudden cost increases and reduced competitiveness in the Indian market. When duties rise, it directly increases the landed cost of Bhutanese ferro alloys for Indian buyers, potentially shifting demand to cheaper alternatives from other countries or domestic sources. These unpredictable policy changes create uncertainty for BFAL in planning long-term contracts and pricing strategies. Since India is the primary export destination for BFAL, this dependency amplifies the impact of any tariff revision, making it a significant regulatory challenge for sustaining trade volumes and profitability.

b.     Global Market Volatility

According to a news report in the Bhutanese by Chuki (2025), “The global market is disturbed and uncertain, particularly due to geopolitical tensions and wars affecting the European market.” This instability disrupts demand patterns, delays shipments, and increases the risk of market closures or trade restrictions. Volatility in global market creates uncertainty in pricing, order volumes, and payment timelines. Markets that could have offered diversification, like Europe, become unreliable or inaccessible due to fluctuating demand or political risk. As a result, BFAL is forced to depend more heavily on a single market like India, which increases its exposure to domestic policy changes and economic conditions in that country. Global instability also affects currency exchange rates, shipping costs, and buyer confidence, all of which reduce BFAL’s competitiveness and profitability in the global arena.

c.     Bilateral trade agreements:

Currently, the country has only two bilateral trade agreements with India and Bangladesh and is a party to one regional agreement, SAFTA. Beyond the South Asian region, Bhutan does not have any bilateral or multilateral trade agreement with any region or country (Ministry of Economic Affairs & UNDP, n.d.). This limited trade framework restricts Bhutan Ferro Alloys Ltd. (BFAL) from accessing wider international markets under preferential terms. Without trade agreements beyond South Asia, BFAL’s exports face higher tariffs and regulatory barriers, reducing their competitiveness. This lack of diversification increases dependence on India and exposes BFAL to greater risk from policy shifts or market slowdowns.