Since inception of tourism in the year 1974, the Royal Government of Bhutan adopted a very cautious and far-sighted approach towards growth and development of tourism industry in the country. Bhutan’s consistent tourism policy of ‘High Value, Low Impact or Low Volume’ tourism helped the Kingdom ensuring its rich living culture, all these years.  From its launch, tourism Industry in Bhutan has been based on the principle of sustainability, meaning that tourism must be environmentally and ecologically friendly, socially and culturally acceptable and economically viable. In order to minimize the negative impacts of tourism, the number of tourists were maintained at a manageable level and one of the strategies adopted to exercise this control had been through a policy of Government regulated Minimum Daily Package Rate (MDPR).

Following Covid-19 pandemic, from 23rd September 2022, Bhutan reopened its borders to international guests with a revamped tourism strategy, underpinned by transformations in three key areas: enhancements to its sustainable development policies, infrastructure upgrades, and the elevation of the guest experience.

Re-strategising policy of 'High Value & Low Volume' tourism to ensure the sustainable use of tourism resources, effective from 20th June 2022 Minimum Daily Package Rate (MDPR) was abolished while Sustainable Development Fee (SDF) raised from previous’ US Dollar 65 to US Dollar 200 per person per night. The SDF principally is the Sustainable Development Fee, a daily levy paid by visitors to support Bhutan’s development. The SDF is collected by national exchequer and funds are allocated to various projects that enhance facilities, services and infrastructure for Bhutanese nationals and visitors alike, as well as funding free healthcare and education. 

For all visitors except those from India, the SDF is US Dollar 200 per person per night while for guests from India the SDF currently is set as INR 1200 per person per night. Children aged 6 to 12 years of age at the time of travel receive a 50% concessionary discount on their SDF and those aged 5 or younger are fully exempted. The SDF is payable for number of days traveller is visiting Bhutan.

This SDF is utilised towards projects that support Bhutan's economic, social, environmental, and cultural development. The fees raised used, funding national investment in programs that preserve Bhutan’s cultural traditions, as well as sustainability projects, infrastructure upgrades, and opportunities for youth – as well as providing free healthcare and education for all. For instance, some of the Sustainable Development Fee funds goes towards offsetting the carbon footprint of visitors by planting trees, upskilling workers in the tourism sector, cleaning and maintaining trails, reducing the country’s reliance on fossil fuels, and electrifying Bhutan’s transportation sector, among other projects. As a country that is vulnerable to the effects of climate change (experiencing melting glaciers, floods and unpredictable weather patterns), Bhutan is also stepping up its efforts to maintain its status as one of only a handful of carbon-negative countries in the world. 

FOLLOWING CATEGORY OF TRAVELLERS ARE EXEMPTED FROM PAYMENT OF SUSTAINABLE DVELOPMENT FEE:
The government has approved the exemption of daily sustainable development fee (SDF) for foreigners visiting Bhutan under following categories other than tourists:

1.    SDF is waived for pilgrims to Gomkora, Hindu pilgrims to Jayanti Mahakal temple, near Phuntsholing, only if the pilgrims stay within Trashi Yangtse and the pilgrimage site for the duration of the festival.
2.    Nationals of Thailand and Switzerland with diplomatic and official passports exempted from the SDF only if the purpose of the visit is for official business. If the purpose of the visit is tourism, then SDF is imposed and can be collected at the port of entry or paid in advance.
3.    SDF is waived only if the purpose of the visit is for nationals of member states of SAARC entitled to SAARC visa exemption scheme. If the purpose of the visit is tourism, then SDF is imposed and collected at the port of entry or paid in advance. 
4.    Foreign workers approved by labour and immigration, foreigners married to Bhutanese and their legitimate children, and foreign students including monks and nuns undertaking a regular study program need not to pay the SDF. 
5.    Direct dependents of promoters, investors of established FDI in the country, diplomats, officials of resident missions, embassies or consulates and their dependents and officials of international organisations based in Bhutan and their direct dependents can also avail SDF exemption.  
6.    The list also includes uniformed personnel of IMTRAT and DANTAK posted to Bhutan and their direct dependents, expatriate traders holding a valid business license and trader card and their direct dependents and day workers and process workers in the factories and industries in the border towns.
7.    Promoters and investors of FDI waived off from SDF for established FDI companies in the country, however, no waiver given during feasibility visits.
8.    Casual visitors in the border towns, SDF to be waived for visitors (nationals of India) to border towns provided they do not halt the night or travel beyond the first designated point.
9.    SDF waived for parents and adult children of diplomats and professionals working in Bhutan.
10.    The cost of SDF for participants of meetings, incentives, conferences, exhibitions (MICE) is to be borne by the host agency or government. Meeting or conference must be recommended or endorsed by the foreign secretary. 
11.    SDF waived to journalists and media personnel only if invited by the government to cover events of national significance or importance, accompanying the head of State or government of a country on an official visit to Bhutan and must be endorsed by the foreign secretary.  
12.    Official guests of the government, civil society, religious organisations (including devotees and pilgrims coming for religious events), and corporations, the cost of SDF should be borne by the host agency. 
13.    Individual volunteers and interns are not permitted entry as per immigration rules and regulations. However, volunteers of international organisations such as TICA, JICA, Australian Volunteers (AVID), HVO based in Bhutan are permitted entry either as foreign workers or as officials of international organisations based in Bhutan. 
14.    SDF waived for sports professionals taking part in sporting events, on contract with licensed clubs and trainers. However, it should be recommended by Bhutan Olympic Committee, and fulfil other requirements.