Tapping North-East Potential for India's enhanced Trade Relations with ASEAN

India's North-East, also known as the land of the seven sisters, comprises the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. All the North-Eastern Indian States have distinct advantages, and provide immense economic and trade opportunities to domestic and international corporates. 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. 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, Northeast India has all the potential to transform into a commercial hub and tourist paradise. As such, it 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; defense, etc. Despite all these advantages, this region is a huge untapped, emerging market, which should prove to be of interest to large domestic and international investors.

Unlike the rest of India, North-East India has an added demographic advantage, in the sense that it account for7.8 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. The region is known for its ethnic, linguistic, cultural, religious and physiographical diversity. North East India Tourism is another potential high growth industry. 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 pointed 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. Various significant initiatives have been taken by the Government of India to promote economic growth, tourism and development in the North-East region in the recent past. The crucial role played by the infrastructure-related issues like shortage of power generation capacity, over-dependence on hydro-power, absence of proper road connectivity, etc., are crucial for the overall development of the region to its true potential.

If given proper implementation, Indian government’s North East strategy could result in making North East an important site for India’s enhanced trade relations with ASEAN, which both the blocs are aiming under their much-awaited Free Trade Agreement (FTA). India and ASEAN are at the crucial moment of signing the Free Trade Agreement (FTA) at the postponed ASEAN Summit meeting in Bangkok in August 2009, after resolving all their contentious issues.