The North East: Hidden Economic
and Trade Potential
Siddhartha Mitra
Director (Research)
Structure of Presentation
Map and related discussion
Strengths
Drawbacks
Unutilised opportunities
Recommendations
North East and Neighbouring Countries
Source: IBEF
North East: Many Strengths
Rich in mineral and water resources
Facilitates power generation
 Makes industrialisation easier
Boost to agriculture
Alternative mode of cheap passenger and cargo transport
Fertile Soils
Mountainous terrain
Facilitates generation of hydel power
 Non extreme climatic conditions
Gives a boost to cultivation of valuable cash crops such as tea
North East: Many Strengths
Population is more literate than the rest of India
Pressure of population on land is lower: 3.8 percent of the
country’s population and 7.9 percent of its area
International borders with China, Bangladesh, Bhutan,
Nepal and Myanmar
 Can be a major participant in cross-border trade
 Can act as an entrepot economy, facilitating trade for
other countries and regions
With its natural beauty offers great scope for tourism
North East: Many Strengths
English literacy much higher than the rest of India
 Facilitates cultural and business interaction with
the the rest of the world
 Can be used to promote tourism from the AngloSaxon world ( United Kingdom, Australia, New
Zealand and North America)
 Source of English teachers for the Rest of India and
neighbouring countries
Drawbacks
Distance from the Central Government
 Feeling of alienation
 Poor communication with the Central government
Access for goods by land very difficult
 Connected to the rest of India by a 22 km wide
stretch of land called the chicken’s neck
 Goods have to travel parallel to Bangladeshi
border and enter through the chicken’s neck – high
transportation costs
Drawbacks
Cultural dissimilarities with the rest of India
Terrorism

Discourages investment, especially from the rest of
India

Cripples industry

Vicious cycle: Poor employment generation contributes
to terrorism which in turn hampers investment and
consequently employment generation
Tribal, ethnic and cultural conflicts
Drawbacks
Mountainous Terrain


Abets terrorism
Makes transportation and communication difficult
o has 45.7 Km. of road length per 100 sq km of area as
against the country average of 62.8
o vastly lower teledensity than the rest of India
Formal trade facilitation with bordering countries is very
poor
Unutilised Opportunities
Power generation: 1,011 MW out of a total potential of
63, 257 MW utilised
Potential for tourism
 Accounts for less than 1 percent of domestic and
0.5 percent of foreign tourist arrivals in India
 Terrorism and lack of promotion of tourism have
been important reasons
Recommendations for the future
Boost to trade facilitation is needed
 More cross border trading points and installation of
modern facilities for faster and smoother transit
 Should have functioning international airports with
flights to neighbouring countries
 Active export promotion of North Eastern products in
neighbouring countries – handicrafts, tea, rubber, silk
products etc
Power trade with neighbouring undulating Bangladesh
will help North East’s power plants attain economies of
scale
Recommendations for the future
Transit can be provided for Bangladeshi products to
Nepal, Bhutan, China etc: emergence of North East as
an entrepot power
Cheap port facilities in Bangladesh can be used for
exporting North Eastern products and importing items of
consumption and valuable raw material inputs
Mutually beneficial exchange of human and physical
capital with Bangladesh/other neighbours