India's Northeast has a trade potential of between Rs 35,000 crore and Rs 1.8 lakh crore. It could become the country's growth engine if adequate attention was given to the infrastructure development, a Ficci-PricewaterhouseCoopers report said.
Gateway to Asean - India's Northeast Frontier said the trade between India and its neighbours Nepal, Bhutan, Bangladesh and Myanmar was Rs 80,303 crore, which could grow at a compound annual growth rate of 20 per cent. With its proximity to the international borders, the Northeast could be a hub of industrial activity, as it would be cost-efficient to have the plants near the export corridor. The region shares a boundary of 4,500 kilometres with China, Myanmar, Bangladesh, and Bhutan.
"Given its geographic position, long international borders, proximity with the Asean countries and its rich resources, it has a great potential to become a hub of economic activity and trade for India in the region," said A Didar Singh, secretary-general, Ficci.
Despite sharing a border with all these countries, the share of the region in this trade was only one to two per cent. The Centre, with its Look East policy, has been announcing initiatives for the region over the years. Apart from substantial investments in infrastructure, a package of incentives aimed at industrial development was announced in 1997. This was followed by the more comprehensive North East Industrial and Investment Promotion Policy in 2007. However, according to the report, the results have been dismal. Since 2005-06, the northeastern states have registered an annual growth rate of 6.9 per cent, which is far below the national average of eight per cent.
The report calls for a major push in infrastructure development, including policy intervention in the areas of decentralisation, easing of border trade, promotion of local sectors and entrepreneurs, capacity building, taxation and exchange-rate reforms, to realise the potential of the region.
"Infrastructure development along these nodes is expected to bring in investments of Rs 42,500 crore over 15 years," said the report.
A total investment of Rs 2,10,672 crore is required for developing the region to estimate its true potential. In addition to it, the report suggests an estimated investment Rs 3,06,052 crore to develop the road networks, which would help build an integrated economic corridor along the region.
- The Northeast has a trade potential of between Rs 35,000 crore and Rs 1.8 lakh crore
- Trade along the Nepal, Bhutan, Bangladesh, and Myanmar border is Rs 80,303 crore, which could grow at a CAGR of 20%
- An investment of Rs 2,10,672 crore is required to develop the region