The North East Region (NER) in India is not just a beautiful amalgamation of culture, cuisine, exotic landscapes, and varied flora & fauna. The region is strategically located across India, South Asia, and Southeast Asia, and holds tremendous potential for trade, businesses, and industries.

The region can become a key node in India’s future economic growth roadmap and play an instrumental role in reaching out to the wider ASEAN region. The region’s economic potential in the past has been undermined due to limited infrastructure development. However, governing agencies are now keeping NER high up on the agenda and racked up investments to bridge the infrastructure gap.

A separate forum has also been built in NITI AAYOG to discuss and prepare NER-specific growth plans.

Abundant in Natural resources, Energy & Human Capital

The entire NER is rich in natural resources such as forests, woods, mineral ores, and animal husbandry. The region has plenty of minerals such as coal, iron ore, nickel, petroleum & natural gas, lead, limestone, and clay. Likewise, the region is rich in a wide range of cash crops such as tea, coffee, bamboo, oud, teak, pineapple, oranges, herbs. If proper cold storage facilities and logistic infrastructure is developed, the region can become a major exporter of agribusiness products in the global markets.

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Around 40% of hydro energy resources in India are available in the North East Indian region, which has also made most of the states in the region energy abundant. The price of electricity is also relatively lower in contrast to other parts of India. In the Northeast, the average price of industrial electricity is in the range of INR 4.5- 4.8/ units.

The region of NER is also well endowed with good quality human capital, which is further enhanced in the face of rich cultural diversity. There is an ample amount of quality human capital available in the state. The government has played a significant role as a large volume of people in the region have been trained under the Pradhan Mantri Kaushal Vikas Yojna.

The labor cost is also competitive in the region. On average, the average minimum wage cost set is in the range of INR 5,500- 13,000.

Routing Investments Towards Infrastructure Development

The Central government and state governing agencies understand the importance of developing the manufacturing sector in the region. In view of the same, the government has taken proactive steps to boost infrastructure, improve inter-region & intra-region connectivity, and manage bottlenecks.

Currently, more than 20 railway projects are being undertaken in the region. This is an important step, as the region has lacked railway infrastructure in the past. Likewise, seven new airport projects have opened in the last 9 years. Presently, there are close to 1850 flights/ week, much higher than 852 flights/ week in 2014.

A new international multi-modal logistic park is being developed in Jogighopa, Assam, with a total cost of INR 700 crores. The project, which is slated to be completed by 2023, will comprise railway lines, roads, waterways, warehouses, cold storage, railway yards, and truck yards. The project spread across 317 acres will also be connected to Guwahati with a 154 km long 4-lane roadway.

The mega project wouldn’t just give a facelift to the logistics business in NER but will also help to reach out to the markets in Bhutan and Bangladesh.

Strategically located across the crossroads of India & ASEAN

The North Eastern Region (NER) strategically connects India with the emerging markets of South East Asia and South Asia including Myanmar, Bangladesh, Thailand, Vietnam, and Cambodia. The NER can leverage the India ASEAN Free Trade Agreement (FTA) as it will further help in unlocking new opportunities in a wide range of segments. This will include but is not limited to agribusiness, fish, grains, minerals, textiles, handcraft, engineering machines, and woods. ASEAN is the 4th largest trading partner of India, and NER can be instrumental in reaching out to a vast market of 2.1 billion in the future.

Work is going on in full swing on the India-Myanmar- Thailand highway. The 1360-km-long project will augment the India- ASEAN FTA and help the NER increase the trade relationship with neighbouring countries. In the future, it has been proposed to further expand the road to Vietnam and Cambodia.

Massive Potential For Industrial Park Development

Industrial parks are relatively a new idea in NER. Nevertheless, there is plenty of potential to develop the segment in a systematic fashion. Thrust to industrial parks, SEZ, and food parks can be instrumental in boosting production & export, generating employment, and harmonizing social growth in the entire region.

Industrial parks won’t just help larger enterprises but will also bolster the SMB sector in the region. It will help local industries to lower costs and boost productivity, thereby becoming more competitive in Indian and international markets.

Already in other parts of India, we have seen how industrial parks have played a pivotal role in regional growth and development. In NER as well they can spearhead the next round of progress.

(By Ankit Kansal, MD, Axon Developers. Views are personal)