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Northeast Trade Imbalance
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Context:
U.S. tariffs on Indian exports have highlighted structural and regional trade imbalances, particularly affecting the northeastern States.
Export Concentration &Marginalisation
- Export Centralisation: India’s merchandise exports are heavily concentrated in Gujarat, Maharashtra, Tamil Nadu, and Karnataka, which together account for over 70% of exports, leaving populous States like UP, Bihar, and MP with minimal share.
- Northeast Exclusion: The eight northeastern States, despite having 5,400+ km of international borders, contribute only 0.13% of national exports due to lack of trade corridors, infrastructure, and institutional support.
- Institutional Neglect: The region remains underrepresented in key economic institutions like the Prime Minister’s Economic Advisory Council and the Board of Trade, leading to policy designs that ignore local realities.
Local Economic Impacts
- Tea Economy Vulnerability: Assam, producing over half of India’s tea, faces stagnating prices, labour shortages, and exposure to international market fluctuations exacerbated by tariffs, threatening livelihoods.
- Energy Sector Strain:Numaligarh Refinery expansion relies increasingly on imported crude, including discounted Russian cargoes, making the region vulnerable to U.S. sanctions and global supply chain disruptions.
- Border Trade Decline: Trade with Myanmar has thinned since the 2021 coup, with the scrapping of the Free Movement Regime in 2024 turning once-active corridors into securitised zones, limiting economic integration.
Strategic & Policy Concerns
- Infrastructure Deficit: Roads, cold chains, and warehouses remain inadequate, reducing the northeast’s participation in national and global trade despite India’s free trade agreements and economic initiatives.
- Geopolitical Vulnerability: China’s growing influence in northern Myanmar and ASEAN through infrastructure and militia networks contrasts India’s limited engagement, risking strategic and economic isolation.
- Need for Resilience: Repeated regional omissions highlight the need for dispersal of trade infrastructure and policy attention, ensuring resilience across all regions, not just traditional industrial belts.
Practice Question:
“Examine how regional disparities in India’s export economy, particularly in the northeast, affect national economic resilience and strategic positioning. Suggest measures to integrate neglected regions into national and global trade frameworks.”
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