Export Potential of NE States: Export Concentration and Spatial Imbalance in India

Context

Despite sharing 5,400 km of international borders with ASEAN countries, China, and Bangladesh, the Northeastern region contributes only 0.13% to India’s national exports.

Export Concentration and Spatial Imbalance in India

• High Regional Concentration: 
  • Four States – Gujarat, Maharashtra, Tamil Nadu, and Karnataka – account for over 70% of exports.
  • Gujarat alone contributes more than 33%, leveraging ports and industrial clusters.
• Northeast Marginalisation: 8 States with 5,400 km of international borders contribute just 0.13% of exports.
  • No functional trade corridors, weak logistics, and minimal representation in export policy bodies.
• Neglected Heartland: Uttar Pradesh, Bihar, and Madhya Pradesh, despite large populations and agricultural potential, together contribute only ~5% of exports.
• Structural Vulnerability: Over-dependence on a few coastal enclaves makes India’s trade pipeline fragile – a disruption in Gujarat or Tamil Nadu can paralyse exports.

Potential of the Northeast Region in Boosting Exports

• Strategic Geography:
  • Shares borders with Bangladesh, Bhutan, Nepal, Myanmar, and China.
  • Can serve as a bridge to ASEAN markets under the Act East Policy.
• Agro and Plantation Products:
  • Assam’s tea (over half of India’s output), spices from Sikkim, ginger from Meghalaya, horticultural produce (pineapple, kiwi, orange) with export potential.
• Energy and Natural Resources:
  • Petroleum and natural gas in Assam and Arunachal Pradesh.
  • Potential for hydroelectric power exports to neighbouring countries.
• Handloom and Handicrafts:
  • Unique crafts, bamboo-based products, and sericulture (Muga silk) can tap niche international markets.
• Tourism & Services Exports:
  • Eco-tourism and cultural tourism in NER can complement merchandise exports.

Challenges Facing Northeast in Exports

• Infrastructure Deficit: Poor roads, limited rail connectivity, inadequate warehouses, and lack of cold chain.
• Border Instability: Myanmar political crisis, border tensions, and insurgency undermine corridor projects.
• Policy Neglect: Export strategies ignore NER’s potential; no dedicated incentives.
• Market Access Issues: Absence of branding and packaging facilities (e.g., Assam tea remains bulk CTC grade).
• Dependence on Few Products: Heavy reliance on tea and crude oil, without diversification.
• Competition from China & ASEAN: China’s rapid infrastructure penetration into Myanmar leaves India behind.

Way Forward

• Dedicated Export Strategy for Northeast: Create a Northeast Export Promotion Policy under DGFT with product and corridor focus.
• Strengthen Connectivity: Fast-track India-Myanmar-Thailand Trilateral Highway, Kaladan Multi-Modal Transit Project, and border haats.
  • Improve logistics hubs, ICDs (Inland Container Depots), and cold-chain infrastructure.
• Institutional Representation: Ensure NER voices in the Board of Trade, PM-EAC, and export councils.
• Value Addition and Branding: Invest in tea branding, spice processing, and organic certification for NER products.
• Cross-Border Cooperation: Negotiate with ASEAN, Bangladesh, and Bhutan for market access via regional FTAs.
• Empower Local Communities: Skill development and cooperative models to engage farmers, artisans, and women entrepreneurs in export value chains.

Balance Security with Trade: Shift governance from counterinsurgency mindset to trade facilitation, while ensuring stability.

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