KATHMANDU  - Bangladesh will open up three of its ports for Bhutan to facilitate trade with other countries, the Bhutanese government said on Thursday, a step that is expected to help the landlocked Himalayan nation reduce its dependence on India for transit.

Wedged between China and India, Bhutan depends solely on Indian ports for supply of essential goods, including fuel, and trade with other countries.

Bangladesh and Bhutan on Wednesday signed a fresh transit agreement after years of negotiations on opening the ports of Mongla, Payra and Chittagong, Bhutanese officials said.

"The agreement provides Bhutan with greater connectivity with necessary transit facilities for the movement of goods," Bhutan's Ministry of Industry, Commerce and Employment said in a statement seen by Reuters.

Bhutan's Minister for Energy and Natural Resources Loknath Sharma said the agreement was expected to help reduce the cost of transportation.

Sanjeev Mehta, a professor of economics at the Royal Thimphu College in the Bhutanese capital, said the agreement "will reduce Bhutan's dependence on India for transit to a certain extent".

A similar treaty between Bhutan and Bangladesh expired in 2000. At present, Bhutan conducts its third country trade mostly from eastern and southern Indian ports.

(Reporting by Gopal Sharma Writing by Shivam Patel Editing by Mark Potter)