Thursday, March 17, 2011

North East India and India-ASEAN trade

North East India consists of seven sister states (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,Tripura) and Sikkim. These land locked states have borders with Bangladesh, Myanmar, Bhutan, China and Nepal. Difficulty in reaching Brahmaputra valley and due to the activities of insurgency groups, these areas didn't attract much commerce in the earlier days and remained backward in development as compared to many other states of India. But recent success in bringing down the insurgency, talks with ULFA, proposals for trade using Bangladeshi ports and physical closeness and geographical continuity with ASEAN offers a lot of new opportunities for this region.

There is no doubt that the recent proposals for Free Trade Areas (FTA), Comprehensive Economic Partnership Agreements(CEPA) between India and ASEAN countries will increase our trade with SE Asia. India's trade with ASEAN rose from $2.4bn in 1990 to $23bn in 2005. In 2010 it was $ 50.1bn and is expected to reach $70bn in 2014. Proposals to establish a trade route between Bay of bengal and NE-India through Bangladesh will not only increase the trade and other economic engagements between NE-India and Bangladesh, it will be a boon for Nepal and Bhutan also.

Sustained peace is one of the essential ingredients for a sustainable economic development. Here comes the  importance of talks between insurgent groups of NE-India and various government agencies.

Hanoi Tower
Government already has ceasefire agreements with some groups like NSCN-IM and talks are already underway with ULFA. It is important for us to give high importance for trade with Bangladesh and other ASEAN countries. Once the neighbouring countries are tightly coupled with each other and with India, terrorist activities in the region will reduce considerably. After all trade requires peaceful environments.

NE-India also provides land access to Myanmar; and through Myanmar to other ASEAN countries like Thailand, Laos, Cambodia, Vietnam and Malaysia. Creation of a grand India-ASEAN highway will definitely boosts the trade between India and ASEAN countries. There is no doubt that such commercial linkages over land will further increase our engagement with ASEAN. This proposal not only bring these countries closer to India but will also change the North-Eastern states of India in to a commercial hub. Another important byproduct of an India- ASEAN road link will be the gradual opening of Myanmar to the external world.

Not only with ASEAN, these links can also be used for trade with China. Deep ecnomic integration between the countries will help to reduce the tension. Even if its not reduced, there is no doubt that economic integration will keep the tensions from reaching an alarming level.

How far government of India will go forward in opening up India's land of rising sun to trade with ASEAN? Only time can tell...


Photo courtesy : Wikipedia

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