North East India is on Time or North East India’s Significance in Geo-economic Shifts

By RAKHEE BHATTACHARYA, PhD. Jawaharlal Nehru University, New Delhi.

With a dramatic decline inglobal oil and gas prices due to surplus supply and stock in the year 2014, the global geopolitics has been in great turmoilamidst complex economic situation. Thedown turn in oil and gas sector is largely pushing a shift from competition on non-renewable natural resources to competition on market efficiency and sustainable renewable alternative in long run.This unprecedented shock has put global economicsat risks, and thus necessarily demands for a change in economic discourse and strategy along with trade dynamics.Along with this, the issues like human security,labour mobility, climate stabilization, green growth and regional arrangements; all of which emerged in the decade of 1990s have expanded the scope and challengesin both policy circle and academia.This shift also strengthens the existing global debate on economic development model towards inter-disciplinarity and new institutional economics, which are in place since Post-Washington consensus in post 1990s.


Given such existing geopolitical turmoil, countries across the world needcautious roadmap for future economic discourse with both large and small multi-polar network, and balancing both old and new allies with innovative trade and investment strategies and agreements. In this context ‘grammar of commerce’ and trade zones may incline to search for ‘smaller trading blocks’ and ‘newer frontlines’ along with old allies.[i]This however signifies a fresh impetustogeo-economics to retain capitalism throughongoing interconnectedness of global neoliberal economic order, which has been in force since 1980s.This interconnectedness of global economy,as observed by Cini, identifies particular set of countries having the ability and willingness to implement economic instruments, which in many cases are becoming even important functions of foreign and security policy.Thus geo-economics though not a new phenomenon, has gained more attention in the present situation. In this context the author further mentions that accepting economic weapon by a Nation-State in international political power games can actually be traced back through the Cold War’s spheres of influence to the era of colonialism and beyond. However, throughout the twentieth century the balance of power among Nations was typically viewed through the lens of geopolitics, focusing on military power, natural resources and demographics as measures of national influence. Geo-economics, which has become a key paradigm in neoliberal order,emphasises factors such as productivity, trade balances and foreign investment.[ii]Geo-economics typically can also be seen as a tool for neoliberal economy, which needs to continuealong with the trend ofglobal and regional integrationas well as disintegration.So neoliberal economic order, according to Pieterse, with both the dimensions ofglobalization and regionalization, has overtaken the standard unit of development, the Nation. Market forces have over taken the role of the State, which has been the conventional agent of development and economy.[iii] In this context, regional or preferential economic integration,according to Cini, have been the most popular geo-economic strategy in recent years. Through economic integration a nation gains relative power to increase their collective market size and economic opportunities.[iv]But, the recent mandate for Breixt in June 2016 has immensely shaken such existing argument and the foundation of neoliberal idea within economic integration. The impact of Brexit is yet to be assessed in the coming future, where Britain itself has to reconcile the crises with mature political leadership, since the existing economic integration model will continue till the time an alternative emerges with sound base and theoretical frame.Economic partnership and theidea of framing economicregion with common marketcontinues to remain important asa familiar a unit of economic development. Development policy, as pointe out by Pieterse, therefore is a matter of decision-making dispersed widely over a terrain of actors, institutions and frameworks, and at theoretical level needs to consider both State and beyond to accommodate such wide ranging actors like local, micro-regional, national, macro-regional and global with adequate articulation and interconnection.[v]Therefore even if Brexit attempts to reinforce the role of Nation-State,economic ties continues through pushes from individual nations and regional blocks for new avenues of sustenance. Neighbourhoodin this context is important, sharing common culture, economy and geography. Such tiesmostly aim to generate both the culture of competition and co-operation in trade and commerce, capital formation, technology transfer, financial flows, and mutual sharing of benefits. Except the last, which aims to attain equity, rest all are for promoting efficiency and expanding economy through such trans-regional activity and connectivity. In this theoretical frame, boundaries and borders become irrelevant and counterproductive to push for such openeconomic agenda.Geo-economics along with geopoliticsremain important tools to foster such agenda of capital movement by initiating and developing connectivity at all levels.

India being a part of this connected global and regional economic order alsohas been a key player of shifts inglobal geo-economic strategies in recent times.The countrywith its huge demographic forces and young labour forceispersistently and keenly lookingfor more economic expansion both at domestic front as well as at trans-national spacewith partnership and alliance. In this context, building trust and relation with neighbourhood has been a daunting task for the Nation having many of them disturbed at several fronts for long time. But given the trend of Pan-Asian economic success,Asian neighbourhood relation through multiple channels is gaining strength through various regional alliancesand partnership;and development of connectivity, infrastructure and raising economic activities at many regional levelshave beenimportant strategies. China has remained reasonably successful in doing so to expand its economy and claiming it to be a fastest growing economy in last couple of years. Butthelatest available data of 2016 show that China tends to slow down with a declining growth rate of about 6.3%, and India has become the fastest growing economy in the world with about 7.2% growth rate. This new piece of information will certainly putAsian economyonce againinto scanner for restructuring regional partnerships and making India more powerful.Indian economy after a declining trend ofabout 5% growth with so-called ‘policy paralysis’ of the outgoing United Progressive Alliance (UPA)Government, is now apparently showing confidence and is ready to kick-start with a visiblemarket agenda of National Democratic Alliance (NDA)Government. The political economy ofsuch emerging market is largely based on three areas,

  1. Boosting manufacturing sector,
  2. Developing connectivity and infra-link
  3. Increasing trade volume.

To achieve these, the country needs more collaboration and economic partnership, and thus foreign policy gains momentum. For improving relation with neighbouringNations, both ‘Neighbourhood First’ ‘Act East Policy’(AEP)have been in place since 2014, and India’s Eastern and Southeastern Nations undoubtedly continues to get attention through connectivity, investment and trade, having the fresh debate on how the country is going to be more forceful to accommodate its North East Region (NER) as a major field in this neighbourhood policy. In the context, the central argument of this paper will have the following structure.

  1. What are India’s recent economic imperatives for developing strategy of connectivity and economic corridors with neighbourhood.
  2. Why East and Southeast Asian (SEA)neighbours are still potential partners for India’s open economic strategy.
  • How North East India (NEI) is relevantand significant while connecting East and Southeast Asia in the context of geo-economics.


As India’s trade to GDP (Gross Domestic Product)ratio had gone down to about 38.9% in the period of 2011-15 from 41.8% in 1996-2000, and its manufacturing share to GDP toabout 17% in 2011-2015 from 18% in 1996-2000[vi], the country is now forced to look for new areas and extended partnership for improving the performance of both manufacturing and trade sectors. This partnership is crucial, even if it is at the cost of building infrastructure and connectivity in the tough and remote regions, which can open up routes and links for having long-term benefit. And in this context, signing of trilateral highway agreement by Indian State between India, Iran and Afghanistan and developing Chabahar port in Iran can be seen as most credible game changing neighbourhoodpolicy of the present government.[vii] Thisis expectedto boost India’s trade route, trade volume and trade relation in the long run with extended neighbours ofIran and Afghanistan, and beyond upto Central Asia without interfacing with immediate troubled neighbour Pakistan. This was long due since 2003, and was committed with heavy investment ofabout US $100 million dollar in 2013. Such heavy investmentmay put a strain on India’s domestic economy, but if outcome remains surehaving persistent economic diplomacy,then such connectivity engagement is worth-taking for India.So this connectivity strategy to link West Asia and then to Central Asia by choosing Afghanistan asnodal location is a bigsteptowards neighbourhood policy of India.In this context, Myanmar can be the other nodal location for East and Southeast Asian connectivity.India-Myanmar-Thailand Trilateral Highway and completion of another US $ 100 million dollar KaladanMulti Modal Transit Connectivity project in Myanmar,also initiated in 2003 should be other game changing neighbourhood policy of India. The 3,200-km trilateral highway, if developed by 2018, which isabout two years behind schedulewill help to enhance the connectivity between the Mekong sub-region and India, and mostly importantly can provide an alternate access route to NEI.So both Afghanistan and Myanmar due to their strategic location can become significant neighboursfor India’s regional economic ties and connectivity development.

While developingsuch infrastructure and connectivity in geographically contiguous regionsbeyond the border are likely to supportIndia’s economy and trade with neighbouring countries, its domestic front also awaits massive infra-link initiative. This can boost India’s manufacturing sector, which iscritical to ‘Make in India’ initiative, and can add to its export volume. Thus 7000 km. long Bharat Mala connecting project, aims at improving connectivity in border areas, including the coastal and hilly boundaries, covering India’s Gujarat, Rajasthan, Punjab, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, part of Uttar Pradesh, Bihar and West Bengal in the first phase. In the second phase it aims to connect Sikkim, Assam, Arunachal Pradesh, Manipur and Mizoram.[viii]This circular connectivity having bordering states of NEI will have the potential to connect both East and Southeast Asia for free flow of economy. To realise such big dream, Indian State needs massive investment support fromneighbouring nations, who in turn canalso benefit from India’s infrastructure and large market.Such rising economic imperatives are constantly generating demand for economic expansion through connectivity, infrastructure development and economic ties; and regional partnership is crucial here for creating such huge investment corpus.



Despite India’s current foreign policy fostering for more regional ties and rejuvenation towards its old West ally like America, SEA nevertheless can be less important than anyone of these. When Indian economy was bankrupt in 1990s with nationalist-protectionist policyand West allies were weak, it was East and SEA, where India looked for and was heavily dependent on.The regionby then became economically prosperouswith massivetransformation to neoliberal capital relation through global connect, having decisive political leadershipto abandon their nationalist-protectionist strategy.India conceptualised remarkable Look East Policy (LEP)and was able torebuild partnership with this region. So despiteChina’s deep anchor here andregion’s owneconomic vicissitudes, prominently in mid 1990s, Indiacould remain successful and valuable partner of Association of Southeast Asian Nation (ASEAN) and ASEAN+.Trade volume, Foreign Direct Investment (FDI) and other strategic partnership extending upto security issues have been achieved for last more than two decades. Estimates show that only in FDI, the total ASEAN share in India has been around 22%. The growth in FDI in the first phase of LEP that is 1991-2000wasabout 50.02%, while in second phase that is 2001-2010, the growth wasabout 63.02%. Singapore scores maximum share with around 78% in 1990s to 80% in 2000s and to almost 95% in running decade.[ix]Countries like Malaysia, Indonesia, and Thailand have also made investment in India. So with LEP, India has gained trust and goodwill and gradually has become pro-active in this region with several diplomatic initiatives.Delhi Dialogue isone such attempt, initiated in 2009for strengtheningthis regional partnership. The forum has held its8th edition meeting in February 2016, where several constructive engagement policies were discussed.

Presently as India’s two year old NDA government is vociferously working on foreign policy, the next stage of connectivity development and economic ties must mature now within its AEP. Needless to say, East and SEA extending upto Asia Pacific will remain the most potential region for opening and expanding trans-region economic space. As China apparently indicates a slow growth, there can be Chinese capital outflow from SEA, which may give these Southeast Asian Nations some short term structural imbalance and demand shocks. At this hour, India can push its investment here to help in retaining region’s macro fundamentals stable, and to do this, India’s AEPmust focus on next set of countries in SEA,like Myanmar, Laos, Cambodia, Philippinesand Vietnam, where growth is expected to be around 7% with economic reforms measures.[x]Some initiatives on Indian side are visible, like plan to set up four IT Centres in Cambodia, Laos, Myanmar and Vietnam and to launch a Tracking and Data Reception Centre in Ho Chi Minh City in Vietnam for applications in disaster management and mineral exploration for ASEAN countries. India’s initiative also needs to anchor in two other areas, like green growth and renewable energy. It has already started sharing its expertise in capacity building projects in Southeast Asiathrough the three funds – the $50 million ASEAN-India Cooperation Fund; the $5 million ASEAN-India Green Fund; and the ASEAN-India Science and Technology Fund.[xi] All these are welcoming initiatives, and in terms of further proposal,the year 2017 is significant for India in terms of continuing its effort for economic relation. In 2017, ASEAN-India partnership will complete 25 years and will celebrate silver anniversary. ASEAN itself will complete 50 years of remarkable economic integration, and will celebrate itsgolden jubilee. To strengthen regional connectivity under India’s AEP, some concrete, achievable and economically desirable plans can be announcedin 2017, especially in some of the specific Nations of Southeast Asia, like in Myanmar, Laos or in Cambodia, having NEI as a partner in it.To do so, India has to step up its relation seriously with Myanmar, which after about half a century is ready to write a new chapter in this sub-region with its newly formed National League for Democracy (NLD) government. The country, which ranked 161st out of 186 nations in Economic Freedom Index and 150thout of 187 nations in Human Development Index till 2014, has been under heavy shadow of cronyism and illegal opium trade with very high level of economic deprivation under Military Junta rule for many decades.The country is expected to initiate several bold policy steps to overcome such crises and economic disaster. India needs a careful political and diplomatic initiative to make Myanmar as the nodal Nation for both strategic partnership and also for connecting otherSoutheast AsianNations like Cambodia, Laos and Vietnam. Thus exploring such new frontier is essential for India to expand its economic partnership.However India’s old traditional East Asian economic partner like Japan continues to remain strong, and has recently committed to extend its support to India’s ‘Quality Infrastructure’. In this context, under vision 2025, ‘Japan-India Make-in-India Special Finance Facility’ is envisioned to create US $12.9 billion by Nippon Export and Investment Insurance (NEXI) and Japan Bank for International Cooperation (JBIC). Thus India expects direct investment from Japan to support its business activities, developing necessary infrastructure and connectivity, and helping to materialise Make-in-India policy and finally expand trade.[xii]In this context $15 billion high-speed rail project between Mumbai and Ahmadabadalso supported by Japan is expected to create huge economic corridors and business opportunities. Such heavy investment can be successful with transparent land policy along with state and people’s support within India.As a part of India’s big infrastructure initiative, other policies like National Investment and Infrastructure Fund, Smart City mission, Atal Mission for Rejuvenation and Urban Transformation are also in place,all of which are aiming towards better connectivity and basic infrastructure for foreign investors, and finally meeting the economic aspiration of this vast nation and its huge young labour force. At this hour, India’s ties with neighbouring Nations, especially with East and Southeast Asia has to continue with great momentum.



No discussion on India’s engagement and connectivity with SEA can be complete without locating NEI, the most potential space to give India’s geo-economics a meaningful dimension. The perspective of geo-economics demands an understanding of North East India’s spatial and temporal significance to invigorate its economic arrangement with its neighbouring nations. The debate of locating North East India in the emerging East and Southeast Asian powers is not a new one and dates back to 1990s with the inception of LEP. Today with India’s pronounced attempt to concretize its foreign policy through‘Neighbourhood first’ and ‘Act East Policy’ can no way ignore North East Region. Both these terminologies signify India’s shifting policy strategies towards a direction, which implicitly has to make North East as another nodal location for India to connect to its neighbouring nations, and the pertinent debate is whether NEI is ready to leverage in this policy focus.

Needless to say, North East India during pre-British period had free flow and natural connection with East and Southeast Asia with geographical congruity and common economy and ethno- culture. Butturning it to a frontier region of British India, the regionbecame isolated. This was done through the colonial strategy of border redrawing between the period of 1826 by signing of Yandaboo treaty with Burma and 1947 by making Radcliff boundary to separate East Pakistan from the region. The mountain realm of this region, according to American Political Scientist James Scot, on the marches of mainland Southeast Asia, China, India’s NE and Bangladesh sprawls across roughly 2.5 million, which is an area roughly the size of Europe, is dominated by several ethnic groups having similar roots istermed as Zomia with strength of about 80 to 100 million population.[xiii]The space which had unique way of operation across the border was forced to be under the British Nation-State frame during that period, and eventually lostthat concept of trans-reginal space by losing routes, relations and regional ties, finallymaking this sub-region an economic periphery. NEI in this discourse was reconfigured and was framed as India security-sensitive frontier. India was forced to explorelonger maritime connectivity with Southeast Asia for long time. This border at North East frontier to a very large extent has destroyed scope and possibility of maintaining such natural connectivity and economic thrives in this entire region. During the period of 1947 to 1971, India with its nationalist-protectionist approach has further pushed the region as remote and landlocked. In 1971, with the creation of Bangladesh, such notion of remoteness was reiterated further, as it was thoroughly cut-off from neighbouringNations and was left to be connected with other parts of India only through Siliguri corridor. The distance differentials of NEI even to its nearest town Kolkata have multiplied due to loss of land connectivity with Bangladesh (table 1). During that period, this space was also reconfigured as a homogeneous unit for administrative purposes, and the idea of North East as a singular unit or a region was strengthened. Policy initiatives and creation of institutes like North Eastern Council (NEC) came into force without changing its status co as remote and backward.

Table 1: Distance Differentials between NE State Capitals and Kolkata (km.)

From To Via Siliguri Corridor Via Bangladesh Distance Differencilas
Agartala Kolkata 1680 450 1230
Silchar Kolkata 1407 600 807
Hwahati Kolkata 1081 830 261
Shillong Kolkata 1181 720 461
Imphal Kolkata 1742 900 842
Azawal Kolkata 1657 800 857

Source: Gurudas Das, 2012

During 1991, when India initiated LEP and attempted to restore relation with SEA, NEI was perceived to be a significant region for connectivity, which also in turn could help itself to deal with its remoteness and isolation. Some tokenism on connectivity network in the region took place and died its natural death both for its internal issues of conflict and for troubled neighbourhood at that period of time. In 2008, India made another freshreview of NEI by conceptualizing it as an open connected region under its broad neoliberal economic agenda. To make market to penetrate in this region, State had forcefully changed its strategy by introducing NER Vision Document 2020. The document highlights the need for improving its economic growth rates through several initiatives. The region’s economic growth over time could not match with other parts of India, especially after India’s structural economic reforms and regional disparity became high. (table 2 and 3).

Table 2: Growth Rates of Net State Domestic Product (%)

States/Regions 1970-71 to 1980-81 1980-81 to 1990-91 1990-91 to 2000-01 2000-01 to 2007-08 2007-08 to 2013-14
NER 3.07 3.89 5.35 9.34 6.92
OSS 6.04 7.01 8.08 9.12 15.47
BIMARU 2.79 4.92 4.05 5.75 16.07
PS 3.52 4.45 8.07 4.78 12.23
AI 3.26 4.97 5.81 7.44 13.99

Author’s Estimates. NER: North East Region with eight States; OSS: Other Small States Delhi, Goa and Puducherry; BIMARU: Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh; PS: Prosperous StateGujarat, Kerala, Himachal Pradesh, Punjab and West Bengal, representing India’s west, North, East and South; AI: All India average.Total 19 states are clustered in these groups to estimate growth rates. Estimated with loglin model from CSO data, and converting them into 2004-05 prices.

Table 3: Growth Rates of Per Capita Net State Domestic Product (%)

States/Regions 1970-71 to 1980-81 1980-81 to 1990-91 1990-91 to 2000-01 2000-01 to 2007-08 2007-08 to 2013-14
NER 1.89 3.50 1.92 4.63 7.27
OSS 6.12 3.01 6.07 6.25 11.83
BIMARU 0.27 2.67 2.25 3.75 15.06
PS 1.56 2.70 3.88 6.68 11.74
AI 0.99 2.84 3.86 5.93 12.50

Author’s Estimates. NER: North East Region with eight States; OSS: Other Small States Delhi, Goa and Puducherry; BIMARU: Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh; PS: Prosperous State Gujarat, Kerala, Himachal Pradesh, Punjab and West Bengal, representing India’s west, North, East and South; Ai: All India average. Total 19 states are clustered in these groups to estimate growth rates. Estimated with loglin model from CSO data, and converting them into 2004-05 prices.

AsNEI found a space in the context of wider trans-regional space in Vision Document 2020 at policy level, some immediate measures on connectivity and infrastructure projects were initiated to connect NEI with its neighbouring nations and then increasing trade activities across border. Eventuallyin the same year 2008, one of the troubled neighbours, Bangladesh transformed its political setupwith its democratic Awami League government, and immediately started restoring economic relation with NEI. By 2011, the other neighbour Myanmar also began its journey for similar political change, and by 2015, its manifestation was over. Meanwhile in this period, in 2014, India also announced its AEP and ‘Neighbourhood First Policy’ for more nuanced positioning, and NEI’s hopehas been manifold.So far region’s gain has been minimal in terms of connectivity, routes, trade, FDI and tourism andacute regional disparity is still visible having India’s Western and Northernstates benefiting most. Most of India’s connectivity projects initiated to connect NEI have not seen the day of the light. In this context, at least three projects need immediate completion.

  1. Completion trilateral highway, expecting to run from Moreh to Mandalay to Mae Sot, which is expected to reduce time and distance between these two regions. Connected to this is, completion of India’s East-West corridor, which can link Gujarat to NEI to SEA through this highway. In the next step, this highway needs to connect toLaos, VietNam and Cambodia, which finally can develop Mekong–India Economic Corridor (MIEC) havingNER as connecting corridor.This will be able to counter China’s initiative on Naning-Singapore economic corridor, which aims to connect all these Southeast Asian nations.[xiv] A decisive political leadership in this whole region can make this a reality, and can bring to an end to age-old illegal trade mafia nexus, multi-layered cronyism and possibly militancy issues in this whole sub-region. Bangladesh is showing the way, working hard with NE Indian states for economic revival.
  2. Full implementation of 6418 km. mega road development programme(2005) called ‘Special Accelerated Road Development Programme in North East (SARDP-NE) to improve internal connectivity of all 88 district headquarters of NEI by at least 2-lane road and to improve road of strategic importance in border area.
  3. Completion of Kaladan project, which can resolve the most fundamental issue of food security in NEI first and then can move beyond for other areas.Indian state should not shy away any longer to fulfill these long due commitments, and see the respond first in terms of NEI’s geopolitical and geo-economic significance.

Other areas like creating an ASEAN Studies Centre at the North-Eastern Hill University in Shillong, announced inrecent Delhi Dialogue forum 2016, and a fresh discussion on ‘Connectivity: Creating Pathways to a Shared Future’ in the same forum having Chief Ministers of Nagaland andMizoram, Deputy Minister of Foreign Affairs of Myanmar, Vice Minister for Foreign Affairs of Thailand, and Deputy Secretary General, ASEAN Secretariat and identifying once again the key role of connectivity between NEI and SEAas an enabler for prosperity, growth, peace and people-to-people contacts are welcoming.[xv] But all these need to be translated now in action, so that the reality and rhetoric in NEI is distinguished.

NE space is not only important for connecting India and SEA in the context of shifting geo-economy, but also has tremendous potentials to grow by itself as a market space integrated to its neighbourhood. With political consensus NEI can be the epicenter for SEA, but possibly cannot sustain with its existing sub-optimal market size of about only 40 million people. NEI market can become visible and sustainableonly by extending across border having more than 100 million people. This can redefine its economic space and locational specificities through greater spatial agglomeration even extending towards North-western side up to sub-Himalayan range and to its eastern and Southeastern neighbouringNations. Such agglomeration has the possibility ofcreating a new economic core and regional sovereign having internal consensus in an agreeable way to set the rules. Thus along with political consensus amongst neighbouring states, an institutional mechanism also has an important role to experiment with such idea of sustainable large market. Thus North Eastern Development Finance Corporation (NEDFi) and NEC can be given the responsibility to initiate such idea. These institutions which are meant for regional development in NER through finance and planning can invest on skills and capital to get access to market and make it competitive. The areas where NEI can initiate such idea of trans-bordermarket are plantation economy like tea which already has comparative advantage and global link. According to a report compiled by V. N. Asopa, NEI’s production share in tea is about 77 percent in India, and India’s share in world tea production is only about a quarter. Though the country is heavily dependent on NEI for tea, but in terms of total volume and world marketsharing, countries like China, Sri Lanka, and Kenya are moving fast. India’s export share is low, as its large domestic market absorbs about 70 percent of total production. To increase the share of market, India needs to extend all its area, production, and productivity, which is a big challenge in the present context. Thus for example, extension of area under tea requires licensing which is now literally suspended because of the non-availability of suitable land in the traditional tea growing regions like NEI. There are limits to growth in productivity, there is also limited scope for increasing area under tea cultivation. Extension of tea area in NER is virtually stagnant, since tribal land cannot be transferred. The Conservation of Forests Act also restricts utilization of waste areas for plantations, and covering them with natural forest cover would take time and require huge investment, despite the fact that tea plantations in wastelands can provide a protective cover against soil erosion and help create new job opportunities. Replanting, the other option having long gestation period also requires large financial support. Considering the high cost of replanting, owners of tea gardens prefer to continue with existing bushes and operate in isolation with small scale. In fact, modernization of the tea sector in terms of size and scale requires large infusion of capital in all areas.[xvi]Added to these, tea industry in NEI was worst affected during the pick militancy period, and lost its credible face. But with changing geopolitics and geo-economics, NEI presently is in focus for economic resurgence, and at this hour, if policy initiatives become pro-active, tea industry and its market can be expanded within the frame of open liberalized structure, having both labour and product markets of NEI’s tea sector connected with neighbouring areas. This can be brought under “Make in India’ initiative for larger investment. As many of Northeastern states and neighbouring Bangladesh, and Terai region of Nepal along with North Bengal area are congenial to produce quality tea, an idea of integrated tea market can be conceptualized in this entire region, which subsequently can increase the size, scale and finally the tea trade volume. Thus  having states like Nagaland, Manipur, Tripura, Arunachal Pradesh, Assam, cutting across northern and eastern Bangladesh, to Darjeeling subdivision, Terai region around Siliguri subdivision, Dooars covering Jalpaiguri to Sikkim, cutting across eastern Nepalcan be expanded as a ‘tea region’. This expanded tea region potentially has above 9 lakh hactre land. Presently the region of Assam, Bengal, Bihar and Tripura has about 3.8 lakh hactre land, which is about 76 percent of India’s total land for tea plantation (5.02 lakh hactre). The extended tea market has the potential to absorb labour in large number, and can increase total production share in world market to a significant extent. This can then be routed to SEA via Myanmar to compete with China, Vietnam and Indonesia.  The trans-reginal highway becomes relevant here. Most importantly, this large market is boundto trivialize NEI’s isolation, small size and inefficiency. At policy level, strong consensus is essential to conceptualise such idea. Institutions like Inter-State Council, NEC along with Ministry of Development of North Eastern Region (MDoNER) may make a feasibility study on this idea to formalize a structure, and then can initiate dialogue with Bangladesh and Nepal at this congenial time, when India is improving its relation with neighbours. NEI in particular is moving ahead with economic ties with Bangladesh now.This tea regioncan promote green growth, create movement of capital, and can prevent regional disparity, economic asymmetry of the periphery.Similarly, agriculture can be another area having common food habits and demand in this whole sub-region.Small and medium enterprises with its natural resource reserve, and hydropower generation are the other strengths of this region. Exploration of these areas are bound to connect NEIwith its neighboursin the entire process of geo-economic shifts, and in all possibilities can transform the lives of millions who are still trapped in abject poverty and miseries in this fast growing region of Asia.

End notes


[i] The terms smaller trading blocks and newer frontlines are used by Jonathon Cini, ‘Geo-Economic Competition: Global Disruption from the New Frontline’, Geneva, Centre for Security Policy, June, 2015, No.6

[ii] Jonathon Cini, ‘Geo-Economic Competition: Global Disruption from the New Frontline’, Geneva, Centre for Security Policy, June, 2015, No.6

[iii] Jan NederveenPieterse, Development Theory: Deconstructions  /Reconstructions, New Delhi: Sage, 2010, p 1

[iv] Jonathon Cini, ‘Geo-Economic Competition: Global Disruption from the New Frontline’, Geneva, Centre for Security Policy, June, 2015, No.6

[v] Jan NederveenPieterse, Development Theory: Deconstructions  /Reconstructions, New Delhi: Sage, 2010, p 1

[vi] World Bank Data,

[vii] Report, ‘India, Iran and Afghanistan sign Chabahar port agreement’, Hindustan Times, 24 May, 2016

[viii] Report, ‘Connecting with Neighbours: Cross-border infra development to open new avenues for India’ Indian Express, 6 January 2016

[ix] Estimated from FDI data of Reserve Bank of India for various years

[x] Report, ‘Economic Outlook for Southeast Asia, China and India, 2016, Enhancing Regional Ties’, OECD, 2015

[xi] Report, ‘ASEAN-India Relation’, Ministry of External Affairs, Government of India,

[xii]Address by Japanese Ambassador to India Mr. Kenji Hiramatsu on the occasion of the Inauguration of “Bengal Global Business Summit 2016”. Embassy of Japan in India, 8 January, 2016,

[xiii] James C. Scot, Art of Not Being Governed: An Anarchist History of Upland Southeast Asia, Yale Agrarian Studies Series, 2010

[xiv]AtulAneja ‘ASEAN trade corridor could ease regional tensions’, The Hindu, September 20, 2015

[xv] Report, ‘Delhi Dialogue VIII’, Ministry of External Affairs, Government of India,

[xvi] V. N. Asopa, India’s Global Tea Trade Reducing Shares, Declining Competitiveness, Centre for Management in Agriculture Indian Institute of Management Ahmedabad, 2009