Hundreds of Bhutanese customers who obtained government authorisation to import Toyota vehicles directly from India are facing uncertainty after Toyota dealers in Siliguri, West Bengal, stopped or restricted sales to Bhutanese buyers and began requesting a no-objection letter from Bhutan's authorised Toyota dealer, State Trading Corporation of Bhutan Limited (STCBL).

The Department of Trade (DoT) has clarified that such a letter is not required, while STCBL says it has no authority to issue one. The issue arose after buyers with import authorisation approached Toyota dealers in Siliguri, mainly for Toyota Urban Cruiser Hyryder variants not sold through Bhutan's authorised dealer and the Toyota Innova Hycross. Buyers said some Indian dealerships subsequently halted their purchases, citing complaints or instructions from STCBL.

One buyer, Tshering Dorji, said his purchase was stopped after he had completed the necessary arrangements.

"After making all the necessary arrangements to purchase the vehicles, we were informed that a complaint had been filed with Toyota Company from Bhutan. We were told that Toyota Company had instructed them not to sell the vehicles in Bhutan, and as a result, they would not be able to sell the vehicles to us," he said.

Import approvals and dealer restrictions

Under existing procedures, Bhutanese buyers can import a vehicle directly from India if the specific make or model is unavailable through an authorised dealer in Bhutan, provided they obtain Department of Trade approval and pay the applicable taxes.

The department has issued hundreds of such approvals since January 2026. One set of figures puts the number at 688, including 630 for Toyota Urban Cruiser Hyryder variants, 39 for the Toyota Innova Hycross, 12 for the Toyota Hilux, three for the Isuzu S-CAB Z and four for other models. Separately, the Trade Department said it had issued around 691 vehicle import approvals from India since January, with almost 94% covering the Urban Cruiser Hyryder.

Many vehicles had already been imported through Siliguri dealers before the STCBL clearance requirement emerged. Buyers said dealers subsequently told them that Toyota vehicles destined for Bhutan would have to be routed through STCBL, which is seeking a formal Toyota dealership agreement in Bhutan.

Agents at Topsel Toyota and Prakash Toyota confirmed receiving complaints from STCBL and being instructed not to export Toyota vehicles to Bhutanese buyers without an STCBL no-objection letter. One dealer agent said vehicles would now be sold through STCBL. Topsel Toyota said it had exported more than 100 vehicles to Bhutanese buyers, while Prakash Toyota estimated that it had supplied around 20.

BBS attempted to contact the Toyota dealer in Siliguri through WhatsApp calls and text messages but received no response. One customer said the dealer may still supply vehicles to buyers who already have tax invoices. The dealer initially asked him to wait for two to three days and later indicated that invoiced vehicles would be supplied once stock became available, but it could not confirm whether newly ordered vehicles would be supplied.

STCBL says it cannot issue no-objection letters

STCBL said it is not a regulatory authority and has no power to issue an objection or no-objection certificate for vehicles imported directly from other sources.

Dechen Wangdi, General Manager of the Toyota Division at STCBL, said Indian suppliers had asked customers to obtain such a document despite STCBL lacking the authority to issue one.

"STCB is a trading company; we are not a regulatory authority. We have no authority to issue an objection or no-objection certificate, so most of the customers deal directly with the Indian supplier. The Indian supplier has asked them to obtain a no-objection certificate from STCB, which was quite surprising, and we are not in a position to issue it as per our dealership agreement with Trade Japan," he said.

STCBL also stated on Facebook that it had not lodged a complaint with Indian Toyota dealers or any authorities seeking to stop the sale or import of Toyota vehicles to Bhutanese customers. STCBL Chief Executive Officer Leki Dendup said the corporation had applied to Toyota's principal company for a dealership arrangement about seven months ago but had not received approval. He said STCBL was aware of the reports and was verifying the facts but declined to comment in detail while the matter was under review.

"As the investigation is currently ongoing, we are unable to comment on specific details at this stage. We will provide a further update once the facts are fully confirmed," Leki Dendup said.

Earlier in the week, STCBL posted on social media that direct Toyota imports bypassing the local authorised distributor had been halted following a visit by stakeholder officials. The post was later removed. Leki Dendup also said the Hyryder and Innova models involved are primarily produced for the Indian domestic market and have not been approved by Toyota's principal company for international export. He said export-market specifications can differ according to regional requirements and regulations.

Department of Trade says clearance is not required

The Department of Trade said its import authorisation is sufficient for an approved vehicle to be brought into Bhutan, provided it matches the approval and all customs, tax and registration requirements are fulfilled. The department said the decision on whether to supply a vehicle ultimately rests with the vehicle manufacturer or principal company.

Rinchen Lhazom, Chief Trade Officer of the Internal Trade Promotion and Facilitation Division at the Ministry of Industry, Commerce and Employment (MoICE), said the department had contacted Toyota officials about the issue.

"We have proactively reached out via email to the company's officials, even inquiring whether they have any objections to supplying these particular variants, which are not supplied or distributed by our Bhutanese dealers in the Bhutanese market, by the authorised legitimate dealers and distributors based outside Bhutan. And we are still awaiting the response from the company, and as soon as we receive the responses via email, we will be able to update," she said.

Buyers affected by the restrictions

One affected buyer wanted a fully equipped Innova Hycross to transport international guests and said STCBL had previously informed him that the particular variant was not being supplied locally. An authorised Indian dealer initially agreed to sell the vehicle but later withdrew from the transaction.

Another group of buyers with Department of Trade authorisation letters and proforma invoices from Topsel Toyota said they were unable to import the Urban Cruiser Hyryder V Hybrid, which they said was not readily available in Bhutan. The buyers said rising fuel prices had increased their interest in hybrid vehicles because of their fuel efficiency and lower long-term running costs, while vehicles purchased from India were more affordable.

"Hybrid technology offers better fuel efficiency and was therefore considered a practical and economical choice," one importer said.

The group has asked the Ministry of Finance to facilitate imports for buyers who already hold Department of Trade authorisation, arguing that routing purchases through a Bhutanese dealership could substantially increase prices.

Price difference between direct imports and local dealer vehicles

The dispute has also highlighted price differences between vehicles purchased directly from India and comparable models sold through Bhutan's authorised dealer. The Urban Cruiser Hyryder reportedly costs about BTN 1.47 million in Siliguri and around BTN 1.65 million after a combined 5% excise tax and 5% GST. For a vehicle costing approximately BTN 1.45 million, the excise tax is about BTN 71,390 and GST about BTN 76,140, bringing the combined tax to approximately BTN 147,530.

The Innova Hycross has a base price of about BTN 1.93 million in India and costs close to BTN 2.2 million after a 14% tax rate comprising 9% excise tax and 5% GST. A fully equipped variant priced at about BTN 2.3 million in India would cost approximately BTN 2.6 million after tax.

Importers said similar Innova Hycross variants sold through Bhutan's authorised dealer are priced between BTN 2.7 million and BTN 2.8 million.

"Vehicle dealers in the country are operating like a monopoly and maximising their profits," one buyer said.

A Department of Trade official said vehicle prices are largely determined by market forces and contractual arrangements between dealers and manufacturers or principal companies, adding that prices charged by authorised dealers are a commercial matter between dealers and customers. The official also said manufacturers can designate particular models for specific regions based on pricing strategies, design considerations and market suitability.

An official from the Competition and Consumer Affairs Authority said the agency does not monitor vehicle prices, which are determined by market forces. The price differences have raised concerns among buyers about whether restrictions on direct imports and exclusive dealership arrangements could affect consumer choice and competition in Bhutan's automotive market.

Customers who already hold tax invoices may be able to proceed once the vehicles become available, while those with only import authorisation remain uncertain about whether their transactions can be completed. The issue remains unresolved pending Toyota's response to the Department of Trade and clarification of the arrangements governing Toyota vehicle sales to Bhutanese customers.