North East India, located between India and its neighbors in South and Southeast Asia, is strategically positioned in a geo-strategically crucial region. Over 96% of the entire region shares international borders, offering robust opportunities for the North East region to emerge as a major manufacturing, trading, and logistics hub for export, import, and re-export to the ASEAN Region. Developing new linkages with major consumption centers and markets could leverage the latent opportunities of the region, contributing to trade expansion and sub-regional integration.
The North East covers 7% of India's total land area and 3.7% of its population, boasting rich biodiversity, unique cultural heritage, and scenic landscapes. The region has significant forest cover, comprising one fourth of the country's total forest area. The North East has made considerable progress in various economic indicators in recent years and is slowly catching up with the rest of India.
Agriculture is the main occupation of the people in the North East region, with around 70% of the population engaged in it. The region grows major crops like rice, maize, millets, sugarcane, jute, mustard, coconut, kiwi, pineapples, passion fruit, walnut, and other horticulture produces. The region is also known for its tea plantations, which, along with other plantation crops like coffee and rubber, are significant sources of revenue.
The North East region of India is abundant in natural assets and resources, including rich biodiversity, forest cover, and fertile land, offering an ideal opportunity for developing the region as a global investment destination.
Furthermore, the region has made considerable advancements in human development indicators, such as literacy, life expectancy, and infant mortality rates, due to the spread of education, skilling, and training facilities in the region. The literacy rate is over 70%, and a sizable population of people can speak English fluently.
The region has the potential to emerge as India's powerhouse, with a latent generation potential estimated at over 50,000 MW. Additionally, there are vast mineral resources available in the region, such as natural gas reserves of over 190 billion cubic meters, coal reserves of over 900 million tonnes, oil reserves of over 500 million tonnes, and limestone reserves of around 5000 million tonnes. These large reserves of minerals, such as limestone, coal, dolomite, uranium, and oil and gas, point to significant opportunities for setting up resource-based industries.
The government of India and state governments have encouraged the flow of investment into the North East through a wide range of policies and initiatives. However, there are ground-level challenges that can be surmounted with the support of the government and government agencies. The government and the private sector need to collaborate and take the lead in providing solutions to these problems. Adequate policy support for industry in the region fosters economic growth, innovation, sustainable development, and social welfare.
The Confederation of Indian Industry (CII) has been actively supporting both the central and state governments of the North East region through policy inputs at both the sectoral and regional level. Major recommendations have been shared with the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry (MoCI), Ministry of External Affairs (MEA), Finance Ministry, Department of North Eastern Region (DoNER), Parliamentary Standing Committee on Commerce, North Eastern Council (NEC), and the state governments on introducing a new industrial policy for the North East, improving the ease of doing business, bridging infrastructure deficits, accelerating industrialization, and bilateral and multilateral trade engagements in the region.
CII has been engaging with the state governments on sectoral policy reforms, including bamboo, agarwood, startups, tourism, organic farming, infrastructure, logistics, and the oil and gas sector. To compensate for the challenges and inadequacies in infrastructure, connectivity, and issues around generating economic opportunities in the hilly and difficult terrain, each state of the region has provided adequate policy support for the industry to operate and flourish.
The North East region of India has predominantly been an agrarian economy, but positive changes have been observed in recent years. The government of India is playing a pivotal role in ensuring sustainable development of the region by allocating large funds, providing favourable policy support, and making significant investments in the hydrocarbon and power sectors. Several state governments in the region have also initiated development initiatives to encourage small and medium-sized enterprises (SMEs) and improve social infrastructure, which has resulted in a rise in the enterprising spirit of the region.
Although significant improvements have been made in physical infrastructure, including roads, railways, waterways, airways, and digital connectivity, it is important to note that infrastructure alone may not be sufficient for realizing the full growth potential of the North East. The region has been experiencing a comparatively slower pace of industrialization and socio-economic growth. To overcome this, efforts at infrastructure development must be supplemented with the development of "Growth
“Growth/Employment Engines” that harness resident assets and skills of the region.
To promote the development of the manufacturing sector in the North East region, it is crucial for the government to offset the high input costs incurred by industries through incentives and schemes. This will help make their operations sustainable and viable until the input costs become equivalent to the rest of the country. The Indian government has acknowledged this need and is actively considering reintroducing a competitive industrial policy for the North East region. The focus is on providing investors with a unique set of incentives and opportunities, which can be a gamechanger for the region and enable it to access substantial markets in East Asia and ASEAN.
For a long time, the manufacturing sector in the North East region has remained passive and subdued due to various reasons and the absence of a major thrust. Traditionally, the region has attributed major emphasis on areas where it has a comparative advantage, such as tea and oil & gas. However, this should not distract the importance and need to boost manufacturing.
While the manufacturing sector in the North East has historically not grown, there is currently a trend towards growth aspirations cutting across both traditional and non-traditional sectors. However, entrepreneurs in the region require more support to create investable ventures. While most innovation in the northeast has been based on natural resources like bamboo, the scale and nationwide markets have been limited in certain areas. Thus, it is important to modernize manufacturing activities to meet market demands.
To address these issues, CII has taken multi-dimensional initiatives in close partnership with the government and industry to mainstream the North East, infuse sustained and equitable growth, and set up growth engines for accelerating economic and social development of the region.
CII has identified several high-potential growth sectors and is working extensively in these areas. The region is competitive in low-skill manufacturing and has the requisite manpower to make complex products that require skilled labor and frugal engineering. By focusing on these sectors, CII aims to leverage the region's strengths and capabilities and promote growth in high-potential areas. Through its initiatives, CII aims to create a sustainable and inclusive ecosystem for entrepreneurship and industrial growth in the North East.
The region has the potential and CII has dovetailed its focus in these sectors. One such sector is Textile and Handloom, which is an area of competence for the region. The handloom sector produces world-class fabrics, and moving it up the value chain can create a unique identity for the region. The North East also has a rich handloom and handicraft culture that has immense potential for high economic transformation and global opportunities. Furthermore, this sector can be a key tool for poverty alleviation in the region, as the artisans possess a considerable amount of human capital.
Another sector that holds tremendous potential in the North East is Food Processing and Agro. The region boasts varied agro-climatic conditions, making it one of the most fertile regions in the country. Investing in this sector would boost the economy of the region and help reduce food waste, which is a significant problem in the area. With a third of what is produced going to waste, investing in agro-industries such as food processing and establishing a reliable cold chain could make a huge difference in terms of rural employment and food security.
The North East's abundant production of bamboo makes it a unique product due to its versatility in usage. Technological advancements have enabled bamboo to be used beyond conventional utilities, as it can substitute for timber, fabric, and even beverages. Moreover, bamboo generates high-quality raw materials that can be processed locally to offset the use of industrial materials such as concrete, steel, plastics, and wood.
In addition, the North East has been identified as one of the two biodiversity "hotspots" of India, boasting rich bio resources spread across diverse ecosystems and nurtured by indigenous communities. The region's bioresources need to be harnessed and made widely popular for the benefit of society, providing supplementary scope for entrepreneurial development through biotechnology. Biotechnology can be infused for the development of healthcare and pharmaceuticals, agro-technology, food processing, bioinformatics, and other sectors. Availability of land and clear policy initiatives would propel the region as a pharma hub, as the Government of India has already committed a Pharma Park in Assam.
With major locations and tremendous potential in numerous tourism activities possible, a Tourism driven economy can have major implications for the region.
The North East, surrounded by nations with limited medical infrastructure, presents an opportunity to attract medical tourists for both conventional treatments and regional alternate treatments and wellness cares. This would not only meet the local demand but also provide a boost to the regional economy.
The North East has a critical role to play in the country's Act East Policy. To address the challenges faced by MSMEs in the region, the Government of India has been focusing on promoting their growth. Recent government initiatives have created a wide range of opportunities for various organizations to participate in the development of SMEs in this region.
This year, CII organized four B20 Conferences in the North East region, aimed at promoting multilateral business opportunities. Each conference had significant participation from delegates representing different countries, and there was a strong expression of investment interest in various sectors.
The Imphal B20 Conference saw participation from 18 countries, with an expressed investment interest of over Rs 1,000 crore in sectors such as healthcare, pharmaceuticals, infrastructure, engineering, agriculture, sports, tourism, upskilling, manufacturing, bamboo, ICT, education, mobile fuel distribution, and renewable energy.
Similarly, the Aizawl B20 Conference had delegates from 17 countries, with an expressed investment interest of over Rs 600 crore in sectors such as sports, bamboo, tourism, nursing and paramedics, ICT, hospitality and hotel, BPO, social infrastructure, food processing, coffee, waste management, education, power, incubator, and startup support.
At the Gangtok B20 Conference, delegates from 22 countries participated and expressed an investment interest of over Rs 1,000 crore in sectors such as IT infrastructure, electric vehicles and renewables, micro-brewery, infrastructure (skywalks, bridges, etc.), skill development, education, agri-processing, organic farming, and forest products.
The Kohima B20 Conference saw participation from delegates representing 27 countries, with an expressed investment interest of over Rs 5,596 crore. The major sectors that garnered investment interest included green energy, healthcare, ethanol from bamboo, medical tourism, animal feed, rubber, pharmaceuticals, organic farming, food processing, tea, agriculture, sports, tourism, upskilling, manufacturing, bamboo, textiles and handloom, ICT, and renewable energy.
These conferences provided an excellent platform for investors and entrepreneurs to explore investment opportunities and collaborate with each other to achieve mutual growth and development.
CII, in association with DPIIT, organized the first-ever CII North East Logistics Conclave in Guwahati in December 2022.. The conclave saw the participation of six line ministries of the Government of India and eight state governments, along with the private sector. The participants deliberated on making the North East logistically future-ready, given its strategic location in the sub-regional context.
While the North East region of India still faces several challenges, there have been significant strides in recent years. The region has enormous potential for growth, particularly in sectors such as tourism, agriculture, and industries, and with the right policies and investments, it can become a vibrant hub of economic activity in India.
North East India, located between India and its neighbors in South and Southeast Asia, is strategically positioned in a geo-strategically crucial region. Over 96% of the entire region shares international borders, offering robust opportunities for the North East region to emerge as a major manufacturing, trading, and logistics hub for export, import, and re-export to the ASEAN Region. Developing new linkages with major consumption centers and markets could leverage the latent opportunities of ...