Eight States, with over 5,400 kilometres of international borders, account for just 0.13% of national exports. 

Background

• Centralization of Exports in Coastal States: India’s export economy is highly centralised in coastal States — Gujarat, Maharashtra, Tamil Nadu, and Karnataka contribute over 70% of merchandise exports.
• Limited Contribution from Populous States: Limited Contribution from Populous States: In contrast, populous States like Uttar Pradesh, Bihar, and Madhya Pradesh together contribute 5%.
• Northeast’s Minimal Export Share: The Northeast region, despite sharing 5,400 km of international borders, contributes only 0.13% of exports.
• U.S. Tariffs and India’s Diplomatic Response (August 2025): In August 2025, the U.S. imposed 25% tariffs on Indian imports, citing trade deficits, Russian crude purchases, and retaliation precedent.
  • India responded with measured diplomacy and no public retaliation, but the episode exposed structural imbalances in India’s export economy.

Key Reasons For Marginalisation Contribution of North East In India’s Exports

• Regional Marginalisation in Trade: Export infrastructure, incentives, and policymaking are concentrated in a few industrial belts.
  • The Northeast has no operational trade corridor or logistical support to access foreign markets.
• Institutional Exclusion: The region lacks representation in key trade policy bodies like the Prime Minister’s Economic Advisory Council and the Board of Trade.
  • The National schemes like Remission of Duties and Taxes on Exported Products (RoDTEP) and Production-Linked Incentive (PLI) focus on industrial States, bypassing the Northeast.
• Sectoral Stress in the Northeast: Tea economy in Assam faces stagnating prices, labour shortages, and vulnerability to tariff hikes in Western markets.
  • Producers rely on the low-profit CTC grade standards (based on leaf size, dust content) and are vulnerable to international market fluctuation.
  • Numaligarh Refinery expansion increases dependence on external crude, including Russian imports — making it vulnerable to sanctions.
• Collapse of Border Trade with Myanmar
  • Since the 2021 coup in Myanmar, cross-border trade has collapsed.
  • India’s two principal gateways to Myanmar, Zokhawthar in Mizoram and Moreh in Manipur, have turned into securitised outposts rather than trade hubs.
  • The scrapping of the Free Movement Regime (2024) severed local cross-border economies and kinship ties.
• Strategic Blind Spot: India’s Act East Policy has not translated into actual trade infrastructure.
  • The India–Myanmar–Thailand (IMT) Trilateral Highway remains incomplete, while China expands influence in northern Myanmar.

Concerns Associated With Marginal Contribution of North East In India’s Exports

• Federal and Economic Cohesion: The over-concentration of exports in four States makes the national economy fragile to regional disruptions. 
  • The Northeast’s exclusion undermines the idea of balanced economic federalism.
• National Security: Lack of economic integration weakens India’s eastern frontier, even as it remains strategically sensitive vis-à-vis China and Myanmar.
• Global Competitiveness: With shifting global supply chains, India’s failure to diversify export corridors limits its Indo-Pacific ambitions.

Challenges in North Eastern States’ Export Contribution

• Infrastructure Gaps: The region suffers from inadequate infrastructure, including poor road connectivity, insufficient warehouses, and a lack of cold chain facilities, which hampers the movement and preservation of goods.
• Policy Inertia: Trade and industrial policies often fail to account for the region’s unique geographical and economic context, resulting in strategies that are ill-suited for boosting exports from the Northeast.
• Security-First Border Approach: Along the international borders, a focus on surveillance and security often takes precedence over trade facilitation.

Way Forward

• Diversify Export Geography: India should invest in Northeast trade corridors to ASEAN via Myanmar and Bangladesh. 
  • The Act East Policy must be backed by concrete infrastructure projects, trade facilitation measures, and targeted investments to harness the region’s potential as a gateway for international commerce.
• Representation: The Northeast voices should be represented in national trade policy bodies.
• Revival of Trade Hubs: Key border towns like Moreh (Manipur) and Zokhawthar (Mizoram) should be developed as fully functional trade hubs, equipped with modern customs facilities, warehouses, and seamless connectivity to domestic markets.
• Trilateral Highway Connectivity: The completion of the India–Myanmar–Thailand Trilateral Highway must be prioritized and integrated with India’s domestic road and logistics corridors to enable smooth movement of goods and promote regional trade.
• Economic Perspective for the Northeast: The Northeast should be treated not merely as a security buffer but as a strategic economic bridge connecting India with Southeast Asia.

Conclusion

The Northeast’s economic neglect undermines India’s overall resilience and cohesion. Addressing infrastructure, policy, and governance gaps is essential to integrate the region fully into the national and global economy.

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