Since 98% of the states in the region share international boundaries and are rich in natural resources, NE enjoys a locational advantage, says new ICC report
New Delhi: In order to add momentum to the India growth story, the Northeast region must be positioned as the gateway to South and South East Asia, a recent report has reiterated. The document released by the Indian Chamber of Commerce (ICC) says that since 98% of the states in the area share international boundaries with Bangladesh, Bhutan, Nepal, Myanmar and China, and are also rich in natural resources, NE enjoys a locational advantage to be promoted as an international trading and commercial hub.
“Northeast India is the gateway to India’s connectivity with South and South East Asia. Given its strategic location, Northeast India can be seen as a window for India’s trade with Southeast Asia including Bangladesh and China,” says the over 93-year old Kolkata-based industry chamber’s latest Knowledge Report.
Citing Prime Minister Narendra Modi’s remark that India’s growth story would be incomplete unless the growth of its eastern part matches that of the western part, the report also urges encouragement for Public-Private Partnerships (PPP) in infrastructure development.
“Private-Public Partnerships in infrastructure in road, telecom, power and waterways to connect all the states of the Northeast should be the priority to tap the trade potential of the region and help in proper functioning of the region as the gateway to Southeast Asia,” it notes.
Rudra Chatterjee, president ICC & MD, Luxmi Tea Co, asserts, “Northeast can be made into a pilot for the kind of changes we want across India. We can have land and labour reforms as the industry hasn’t matured to the same extent as it has in the rest of India. Therefore, you can experiment with a much more liberalised economic regime in the area.” If successful that can serve as a development blueprint for the rest of the country.
MK Saharia, chairman, North East Regional Committee, ICC, and chairman, Contemporary Industries & Leasing Ltd, sums up the situation with the remark, “If you take Guwahati or any other part of the Northeast as the centre and draw a 2,000 km radius, it will cover 50% of the world’s GDP and 50% of the world’s population. Northeast is not just a corner of India but at the centre of the three fastest growing regions in the world: China, South Asia and South East Asia.”
The granular document examines the seven states in the region in some detail to provide insights into their respective strengths, policy interventions and human development parameters before making suggestions and highlighting the investment potential on a case-by-case basis. For instance, in the chapter on Assam, the largest state in the region, it mentions presence of an educated labour pool, rich natural resources, infrastructure, conducive investment policies and ease of doing business as core strengths. In terms of the state’s investment potential, power & energy, minerals, tourism, crude oil refining, agriculture & food processing, pharmaceuticals, biotechnology, and IT&ITES sectors are offered for investment.
Similarly, for Tripura, also counted among the least developed states in the country, the strengths are presence of four climate zones ideal for large-scale cultivation of jackfruit and pineapple, proximity to Bangladesh and South East Asia, and presence of infrastructure such as a mega-food park, industrial estates, industrial growth centres and Integrated Infrastructure Development Centres (IIDC)s.
But the lack of connectivity remains an area of concern for all stakeholders. Although all agree that the ongoing infrastructure development will help fast-track development of the region. Simultaneously, they insist on creating robust cross-border engagements.
Sudhanshu Pandey, additional secretary, trade policy division, ministry of commerce and industry, assures that improving connectivity to the region remains the top priority of government. “From the connectivity point of view, all four modes are being pursued very actively and vigorously both within the region as well as across its international boundary.”
Saharia suggests , “The India-Myanmar-Thailand trilateral highway is going to be operational very soon. But what would happen once it becomes operational? There would hardly be any traffic coming through because of infrastructural issues. The rail link to Imphal should be extended till Moreh.”
He is all for the development of the township on the Manipur-Myanmar border as an international transit hub between South and South East Asia to create the kind of linkages that exist in Continental Europe. This would include the creation of a large warehousing facility for the transport of goods into India from Southeast Asia and vice-versa after undertaking a proper feasibility study.
Pandey points out that moves are also afoot to improve intra-region, inter-region and trans-national air connectivity. “Eight airports are being developed in the region. The flight to Bangladesh is set to begin. We are working with a number of other airlines and the ministry of commerce and industry is prepared to give Viability Gap Funding (VGF) so that the fresh agricultural produce from the region can be taken to international markets.”
Ram Muivah, secretary, North Eastern Council (NEC), admits that the growth of horticulture is presently hampered for the lack of proper infrastructure. “Given the prohibitive cost of transportation, buyers don’t come to Northeast. For example, the potato for the Frito-Lay plant near Guwahati comes from Indore,” he mentions.
Budget carrier SpiceJet has already commenced dedicated freighter services for the transport of mandarin fruits to Hong Kong and Dubai. Additionally, the Ministry of Commerce & Industry is working on a comprehensive logistics plan for the region.
But Pandey agrees that though a lot is happening on the ground, it needs to happen in a much more structured and faster manner. “At a time when technology has made everyone impatient, we can no longer afford the pace that we worked with in the past. We need to actually accelerate work on various projects and rapidly integrate with the national economies around the North East,” he surmises.
What the regional economies say
The ICC report expects the central government’s ‘Act East Policy’ to provide a massive fillip to the tourism and MSME sectors in the region. “The trickle-down effect the various schemes coupled with increased government expenditure is likely to improve the competitiveness in various industries,” it avers.
The economies bordering the region see a humungous growth opportunity. Terming the upcoming 15-km rail link between Agartala and Akhaura a small but significant step that will help connect North East with the Chittagong port, Rokebul Haque, Acting High Commissioner of Bangladesh declares, “Bangladesh is looking for Indian investment to manufacture various goods on a buyback basis,the kind of arrangement that exists between the US and Mexico.” As per the trade deal referred to by Haque, US companies invest in manufacturing facilities in Mexico and the products thus manufactured are imported into the US to take advantage of their lower production cost.
Welcoming the various concrete initiatives being taken by India under the Act East Policy, Sidharto Reza Suryodipuro, Ambassador of Indonesia to India, feels that while one needs to think big baby steps also need to be taken to arrive at what is practical. He points out that based on the existing bilateral agreements there are only 28 flights per week between the two countries. “If we put a limit on the flights, obviously airlines will choose to go where the biggest markets are like New Delhi, Mumbai and Chennai. That’s why it’s important to expand and have more flights between the two countries,” he emphasises.
Suryodipuro also stresses the need to open a maritime route to the region. “Though the Northeast is essentially a land bridge to Southeast Asia we need to also think about how to get there using the maritime route. Kolkata is obviously is an important hub. Recently we established a bridge between the Andamans and Aceh when the first ever boat ever carrying goods from Banda Aceh reached Port Blair in early January.” He feels that the Andamans can very well serve as a transshipment point between India and Indonesia in the medium term.
The Northeast region holds tremendous scope for medical tourism. For instance, in 2018, around 3,000 patients arrived in Manipur from Myanmar for treatment. Similarly, Guwahati also receives a large number of foreign patients. The government is now upgrading the health infrastructure in the region to keep pace with the yearly increase in the number of foreign patients. The audiovisual industry and education are other potential areas of growth.
Enthused by the results that recent development initiatives in the region have generated, Rajeev Singh, director general, ICC states, “There are plenty of success stories from the North East. Such stories belong to the central and state governments, ministries, private sector players and individuals. There’s, therefore, a need to celebrate and highlight such stories to let the outside world know that the region is growing.”
Besides, increased awareness and investments would serve to ensure all-around progress of the region.