The Northeast as a unified market & production base

Holding the first meeting of the High Level Task Force on the Northeast Economic Corridor (NEEC) on Wednesday has set the ball rolling for projecting the states in the Northeast region as a single market and production base before global players. Prioritising intra-regional connectivity and facilitating the smooth movement of goods, services and people are critical to the region leveraging India’s Act East policy and Neighbourhood First Policy to unlock its potential for trade and commerce with vibrant ASEAN economies and key neighbours in South Asia. Mizoram Chief Minister Lalduhoma, who chaired the meeting held via video conference, said that the establishment of the Task Force on NEEC is aimed at assessing the existing economic, infrastructure and investment ecosystem in the region, highlighting critical sectors, and formulating strategies to attract public and private sector investment and align the objectives with the action plan to attain measurable targets for short-term, medium-term and long-term milestones. Meghalaya Chief Minister Conrad Sangma has rightly emphasised in the meeting that the North East, as a unified region, holds significant potential to drive national economic growth through strategic partnerships that leverage each state’s strengths. He also said that the proximity of the region to Southeast Asia positions it well for development. The central government commissioned a feasibility study on NEEC from the Asian Development Bank (ADB). The ADB report submitted in 2023 highlighted that the study delved deep into three key infrastructure aspects— transport, urban and power—as enablers for equitable economic development for the region. It envisaged a multi-modal transport network at three levels – within NER; between the region and the rest of India with additional ways of connectivity through Bangladesh; and with the neighbouring countries (Bangladesh, Bhutan and Myanmar) to enhance South Asia-Southeast Asia connectivity. The study found that all identified routes are in line with international and regional transport corridors such as the Asian Highway Network, South Asia Sub-regional Economic Cooperation (SASEC) corridors, the Trans-Asia Rail Network, and the India–Bangladesh Inland Waterways Protocol routes. The ADB study focused on the economic uplift and equitable development of the individual states and the region and identified 24 growth centres and 20 border centres that will drive the development of the states based on their potential. The connectivity through Bangladesh has plunged into uncertainty with the current regime turning hostile against India and tension between the two countries. With Bangladesh moving closer to Pakistan, India must adopt a cautious approach in all transborder projects for connectivity between the region and the rest of India through Bangladesh. India exploring an alternative route through Bhutan and Nepal has become crucial, as commissioning another alternative route connecting the region with the rest of India through Myanmar via Sittwe has become uncertain due to political turmoil in that country. The dynamic geopolitics in the neighbourhood have created a sense of urgency in fast-tracking the establishment of the NEEC so that ASEAN nations and other friendly neighbours – Nepal and Bhutan – can focus their attention on the region for increasing bilateral and multilateral trade and commerce. Spectacular expansion of the network of highways, railways, and airways has significantly improved intra-regional connectivity, and this has influenced private investors to start looking at the region with tremendous growth potential, offering a large market and sustainable production base with huge natural capitals. The states in the region collaborating to strengthen human capital and social capital by facilitating skill training, sharing resources for the establishment of centres of excellence, and facilitating networking and connections among different communities will attract big-ticket players in ASEAN markets to invest in sunrise sectors. States in the region projecting individual production bases and market demands have failed to attract substantial foreign direct investment despite a range of incentives announced by the central government and the states. A global player essentially considers aggregated market demand and production base along with infrastructure availability to make an investment decision. The improvement in intra-regional connectivity is a big infrastructure push and brought the opportunity for the region to project the aggregated market demand for agricultural and allied products, manufactured goods, tourism products, etc., to the potential investors. Creation of a single-window clearance ecosystem under the aegis of the Ministry of Development of the North Eastern Region to facilitate instead of requiring investors to move to individual states for required permission and clearance for a business venture involving marketing and supply chains in the entire region will be vital to shape the image of the region as a single economic zone. Establishment of a unified market and production base under NEEC will also help local producers, entrepreneurs and traders to optimally tap their marketing potential and grow business, which in turn will generate huge employment opportunities. Realising the goals of NEEC will require the Task Force to draw an elaborate roadmap along the lines of the ASEAN economic community blueprint.