Logistics Hope for Northeast Economy

Transforming the consumption-driven economy of the Northeast region into a marketable surplus economy is critical to increasing household income to boost growth. Increasing investment is essential to boost agricultural production and productivity, but without market access, increasing production is not going to change the situation. Rather, marketable surplus fetching non-remunerative returns to producers will only disincentivise them from reducing production to match the local demand-supply dynamics. Domestic consumption boosts can also spur investment and economic growth, but in the Northeast region, low household income limits consumption. Therefore, producers in the region accessing markets outside the region with high demand for goods from households with higher income levels are critical to boosting production. Logistics plays the most crucial role in ensuring market access for producers in farms as well as industrial sectors. The Northeast Frontier Railway launching a dedicated parcel cargo express train from Agartala to Sanhewal in Punjab is certainly a significant initiative that gives hope to increasing the flow of goods produced in the region to the rest of India. The parcel van will facilitate transportation of a higher volume of commodities like rubber and pineapples from Tripura by providing a reliable logistics solution for producers and traders in the region. The logistics solution remaining cost-efficient for freight movement from the region to large markets outside will determine its demand in the long term. Reaping optimal benefits from the cargo express train will require other stakeholders, such as the Rubber Board, agriculture and horticulture departments, and industry and commerce departments, to coordinate and collaborate for timely intervention and initiatives for boosting production and productivity of goods, including rubber and pineapple produced in the region, to meet the anticipated increase in demand in markets outside. Initiatives to increase cargo movement along the Brahmaputra waterway for cheaper transportation of goods supplied to the region via the Indo-Bangladesh Protocol route were a major step, but the change of regime in Bangladesh and rising tension on account of the hostile attitude of the interim regime have cast a shadow of uncertainty. In view of the emerging geopolitics in the neighbourhood, highways and railways passing through the narrow Chicken Neck corridor at Siliguri will remain the most important sustainable logistics solution for the movement of cargo from the Northeast region to markets outside until the security situation in the region improves. The introduction of the cargo express train, therefore, demonstrates the central government’s priority to improve logistics in the region, not just to bring in supplies to cater to the demand for food foodgrain, infrastructure-related and fast-moving consumer goods for consumers in the region, but also to facilitate the supply of goods to cater to demand in markets in the rest of India. States in the region, in collaboration with the Ministry of Development of the North Eastern Region, the North Eastern Council and the Ministry of Commerce and industries organising buyers-sellers meetings, agri-horticultural exhibitions and trade expos in different states outside the region can go a long way in marketing the unique products, including organic farm products, among consumers and traders to generate demand. In the competitive markets, goods with lower prices have the edge over goods with higher prices. However, when it comes to unique products that are produced in a specific agroclimatic zone or geography, like the northeast region, and by producers having traditional knowledge and skills, efficient marketing can drive demand for such goods. The initiatives so far have mostly been limited to attracting major players to such events held in Guwahati and other places in the region. The strategy to attract investors needs to be aligned with the strategy to attract buyers from outside the region so that investors are assured of adequate demands of goods to be produced in agriculture and allied sectors or the industrial sector processing farm produce in a broader market. Improvement in logistics solutions in the region requires reducing delivery time, adequate cold storage and other cold chain solutions from the farm gate to retail markets outside for highly perishable, high-value goods to ensure minimum loss in transit and customer satisfaction for end consumers. High and growing demand for Assam tea in the domestic markets outside the state is a classic example which demolishes the myth that production of goods in the region is economically not sustainable for markets outside due to the higher cost of transportation. A growing list of unique products from the region with a geographical indication tag has triggered hopes for the transformation of traditional subsistence production, driven more by cultural practices, into commercial-scale production. A cost-efficient and easily accessible logistics solution can turn such hopes into reality.  Improvement in connectivity in the region has drawn the attention of major players in the logistics sector. The central and state governments facilitating marketing access for unique products from the region, along with the development of highways, railways and waterways, will put logistics solutions on a faster lane in the northeast.