North-East India: An Emerging Industrial Center

The North East of India comprising of the 8 states of Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim, is a reservoir of rich natural resources and a beautiful amalgamation of different people and cultures. It surely is a region waiting to happen. Blessed with biodiversity, huge hydro-energy potential, oil and gas, coal, limestone, forest wealth, fruits and vegetables, flowers, herbs and aromatic plants, rare and rich flora and fauna, NE India has all the potential to transform into a commercial hub and tourist paradise. The region shares borders with China in the north, Bangladesh in the South-West, Bhutan in the North-West and Myanmar in the East. This makes the North-East a prospective hub of international trade and commerce. Unlike the rest of India, North East India has an added demographic advantage, in the sense that it occupies 7.8 per cent of the country’s total land space but has a population of 3.8 crore, which makes it approximately 3.73 per cent of the country’s population. This is also a huge untapped, emerging market, which should prove to be of interest to large domestic and international investors. The area is a vibrant source of energy rich in oil, natural gas, coal, limestone and India’s largest perennial water system, the River Brahmaputra and its tributaries, which can be tapped for energy, irrigation and transportation. The fertile soil around the valley of the River Brahmaputra is a veritable storehouse of horticultural products/plantation crops/vegetables/spices and rare forest products. Subsidies on transport, capital investment, interest on working capital, excise duty refund, income tax exemptions etc. are available for industries in the region, as declared in the new North East Industrial and Investment Promotion Policy 2007 (NEIIPP). Attractive incentive structures should attract new domestic and foreign investments into the region, which, despite having several advantages, has not witnessed the kind of fast-paced growth and development that it should have experienced in the past years. North East India also offers huge opportunities in sectors of strategic importance like energy and infrastructure; oil, natural gas and hydrocarbons; agro, food processing and horticulture; floriculture; IT and ITeS; cement; defence, etc. Tourism is another potential high growth industry. Manipur has huge potential in sectors like power, agro-based industries, etc.; a greater private sector involvement in the state economy will ensure local job creation and entrepreneurship development. The State Government of Manipur lays a major thrust on Agro and Food Processing; an Agri Export Zone for Passion Fruit is being developed in the state. The literacy rate in Mizoram is above 90%, which is the 2nd highest in India. A well-educated and hardworking young population is an advantage for Foreign and also domestic corporates; sectors like IT and ITeS, agro processing, floriculture and bamboo are some areas that offer huge opportunities to investors. The state also grows fine quality of grapes, which can be utilised for large-scale wine production. The State Government of Manipur is pro-active and industry-friendly, and investors can be assured of single-window clearances. Assam provides huge investment opportunities in sectors like hydrocarbons, oil and natural gas, bamboo, handicrafts and tea. Assam tea is well known for its distinctive quality, and exported to the developed markets of Europe. Sectors like IT, hospitality and tourism, power, agro and food processing are poised for impressive future growth - companies like Infosys and Reliance have already shown interest in investing in Assam, with Tata Consultancy Services even having a BPO unit in Guwahati. All the North-Eastern Indian States have distinct advantages, and provide immense economic and trade opportunities to domestic and international corporates. North-East India is often described as the Gateway to South-East Asia. India’s ‘Look East’ Policy aims at transforming the North-East into a dynamic center of a thriving and integrated economic space, linking the two high-potential regions with a network of highways, railways, pipelines, and transmission lines crisscrossing the region. The huge complementarity arising out of India’s ‘Look East’ Policy and our South-East Asia focus and the ‘Look West’ Policy of South-East Asian nations like Thailand, gives rise to immense opportunities for India and ASEAN countries to develop their trade and investment relations, using the North-East as a primary focal point. However, as indicated earlier, despite these great advantages, the North-East has not grown at par with the rest of the country, and the region’ s potential has not been tapped properly. While the significant initiatives taken by the Government to promote economic growth, tourism and development in the North-East region can be largely welcomed, I would like to mention that issues and problems like shortage of power generation capacity, over-dependence on hydro-power, absence of proper road connectivity, etc., need to be given special emphasis in order to help the region achieve high growth. However, the high priority to be accorded to the development of roads in the North-East Region is well reflected in the Union Government’s intention to invest nearly Rs.50,000/- crores on the roads sector in the North-East over the Eleventh Plan period, that is, over the next 5 years. The East-West corridor project, which will connect Silchar in Assam to Porbandar in Gujarat, is scheduled to be completed by 2009 – and this will go a long way in improving connectivity and transforming the region into a vibrant economic zone. Also, India is exploring a transport corridor through Myanmar, a potential gateway to East Asian countries, to form a free-trade region. The proposed ‘Trilateral Highway' connecting India, Myanmar and Thailand is being discussed. This project, I believe, has the potential of strengthening economic exchanges and international co-operation significantly. With necessary infrastructure development within the region, and the building of connecting links between North-East and the rest of India, and North-East and South-East Asia, the economic potential of the region can be suitably exploited. Time-bound implementation of projects, conducive centre-state relations and political stability, monitoring of fund–flows and necessary marketing and branding of the region can truly transform this goldmine of a region into a vibrant hub of business, tourism and trade.