Shaping the Emerging

North East Region

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02
 Balkrishan Goenka
President,
ASSOCHAM

Indo-Japanese relations have been recorded as early as the beginning of the millennium. Having
started with spiritual exchanges, the ties have been strengthened over many years to evolve
across spheres spanning philosophy, academia, trade, energy, technology and defence
cooperation, among others.

In present times, the relations have transformed into a ‘Partnership for Prosperity’, forming the
pivot of India’s Act East Policy. A number of collaborative projects are being undertaken with
renewed focus on connectivity, infrastructure, sustainable development, digital partnerships,
among many others, encompassing a vast spectrum of areas.

The long-standing ties stand to be further enhanced by the personal equation shared by Prime
Minister Shri Narendra Modi and Prime Minister Mr Shinzo Abe. The long terms ahead for both of
them would augment bilateral relations and see the fruition of many infrastructure projects
which are in the pipeline.

It is envisaged that synergies between India’s demographic strength and Japanese investment
and technological know-how would play a vital role in harnessing the bilateral partnership to
realize its potential and lead the way for a prosperous future.
In the context of India’s North East Region, the Japanese investment in projects across
sustainability, ecological development, road network, bio-diversity conservation would develop
the region and facilitate forming the gateway to Southeast Asian countries.

ASSOCHAM is keen to contribute to the transformation of the North Easter Region and witness
its socio-economic progress. With this objective and welcoming Japanese partnership, it is hoped
that the Conference on Japanese Investment in the North Eastern Region of India would open
further vistas for mutual cooperation between the two Asian giants.

03
 Saurabh Sanyal
Deputy Secretary General,
ASSOCHAM

Development is the key essence of any economy. Trade and investment fulfils the development
requirements, which in turn, affects social and economic development. The Government of Japan
is keen to participate in the development of North East India.

The India-Japan Special Strategic and Global Partnership is firmly rooted in history and is based
on common values. It is aimed at advancing the two countries’ shared strategic objectives and
achieving peace, prosperity and progress to realise a better future for the people of both the
countries.

India-Japan relationship has been transformed into a partnership with great substance and
purpose and is the cornerstone of India’s Act East Policy. Prime Minster Abe has underlined the
basic importance of India-Japan relationship and is determined to advance the “new era in
India-Japan relations” to further cooperate for peace, stability and prosperity of Indo-Pacific.

ASEAN unity and centrality are at the heart of the Indo-Pacific concept, which is inclusive and
open to all.

The development in connectivity via quality infrastructure and other projects including capacity
building for shared prosperity will make a trajectory for growth in the North Eastern Region.

The development of India’s North Eastern Region through the India-Japan Act East Forum by
identifying and implementing projects for enhancing connectivity, sustainable forest and
ecological management, disaster risk reduction will also mark as key indicators for development.

The launch of the knowledge report jointly made by ASSOCHAM and NEC Technologies India at
the Conference on Japan Invest- North East India on 8th August 2019 will further re-assure the
commitment of Japanese Investors in North East Region of India.

04
 Rahul Sharma
Chairman,
ASSOCHAM India – Japan Business Promotion Council
“JAPAN-INDIA SOCIAL, ECONOMIC AND
CULTURAL COMPATIBILITY”

India–Japan relations have traditionally been strong. The people of India and Japan have
engaged in economic exchanges, however a platform to encourage people-to-people connect
from heart between both countries is required.

The cultural similarities between North East India and Japan are a key factor for attracting
Japanese investment into North Eastern Region, which will lead to overall development of
the people, region and also act as an important connect for trade from India to ASEAN
countries.

The recent interest shown by the Government of Japan to invest an amount of approximately
INR 13,000 crore in several ongoing as well as new projects in different states of India's
North Eastern Region shows their interest in its development.

The people of North East India and Japan can build a closer cultural tradition. With the right
knowledge of the Japanese language and cultural education, the people of North East will fit
in well as a workforce in Japan and the Japanese Industry in India.

The knowledge report would provide information on investment opportunities in The North
Eastern States of India, which will also include other important sectors such as agriculture,
education, infrastructure, power & energy, manufacturing, healthcare, tourism and
hospitality. The conference will be heard carefully and a way forward report shall be prepared
and sent to the Indian Government and stakeholders, private industry as well as to the
Japanese Government and other stakeholders.

We shall work successfully towards this goal and this is the starting.

05
 Piyush Sinha
Deputy Managing Director,
NEC Technologies India Limited

Rich with flora and fauna, minerals, hydrocarbons, people and culture, North Eastern Region
(NER) is nature's alluring gift to India, which has the potential to catalyse India’s growth
trajectory. We believe that this region will evolve into an economic corridor by serving as
India’s gateway to ASEAN (Association of Southeast Asian Nations) and BIMSTEC (Bay of
Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) countries. Honour-
able Prime Minister Narendra Modi has aptly regarded the eight states of NER as "Ashta
lakshmi," which in Hinduism regards to the eight facets of the deity of wealth.

The region, which shares ~8% of the nation’s land while contributing only under 3% to the
nation’s GDP, is far from reaching its true potential. It is appeasing to know that the
Government of India, the respective state governments and various central and state
ministries have a rekindled focus to transform the region’s plight. Their efforts certainly
have been inspiring.

Developing NER doesn’t only serve India’s objective of prosperity, but resonates with
Japan's strategy of “Free and Open Indo-Pacific”, through which it promotes connectivity
between Asia, the Middle East, and Africa. We hope that this conference acts as a medium
through which India and Japan are able to synchronise their agendas – enabling the replica-
tion of success which the two countries have achieved in the past by working together.

We, at NEC Technologies India Private Limited (NECTI), are delighted to collaborate as a
knowledge partner with ASSOCHAM’s India-Japan Business Promotion Council and Japan
Chamber of Commerce and Industry of India (JCCII) to present the conference on Japan
Investment in North East Region.

We believe that it shouldn't only be the government to push NER's development but
private companies should also be proactive in this endeavour. We would like to support
NER’s development by showcasing our willingness to collaborate with respective central
and state ministries to achieve a true prosperous North East India.

06
Table of Contents
Section 1 North Eastern Region, The New Engine of India's growth 08
1.1 Economic Landscape 10
1.2 People and Culture 11

Section 2 Political Landscape and The Role of Government 12

2.1 Look East Policy 12
2.2 Act East Policy 12
2.3 Government’s Efforts in NER 12
2.4 Plan Gross Budgetary Support for NER 13
2.5 Ministry of Department of Development of North Eastern Region (MDoNER) 13
2.6 Major Functions and Responsibilities of MDoNER 13
2.7 Institutions Under MDoNER 14
2.8 NER is Part of the ‘Smart Cities’ Programme 15

Section 3 Key Thrust Areas 16

3.1 Transport Infrastructure 17
3.2 Tourism 22
3.3 Agriculture 24
3.4 Education and Skill Development 26
3.5 Healthcare 27
3.6 Information and Communications Technology 28
3.7 Manufacturing, Mining and Raw Materials 30
3.8 Energy 32

Section 4 India & Japan Relationship 34

4.1 Japan and North Eastern Region Development 36
4.2 How can Japan Shape the Emerging NER? 37

Section 5 The Road Ahead 38

Recommendations
About ASSOCHAM 40
About NEC 41
Analyst Profile 42

07
 North Eastern Region,
The New Engine of India's growth
Introduction
The North Eastern Region (NER), also
known as the Land of Seven Sisters, is
reminiscent of nature’s picturesque
endowments to India. It is located in the
midst of the Eastern Himalayan Region
and comprises eight states, which
include Arunachal Pradesh, Assam,
Manipur, Meghalaya, Mizoram,
Nagaland, Tripura, and Sikkim. The
region shares ~98% of its boundary
with international boundaries of Nepal,
Bhutan, China (Tibet), Myanmar and
Bangladesh. The region is specially
significant to not just because of its
serene beauty or strategic location, but
also because of its rich, diverse, and
unique culture.

08
The NER forms a part of the Eastern
Himalayan Ranges and the Northeast Hills
(Patkai-Naga Hills and Lushai Hills) along with
the Brahmaputra-Barak river systems and
valley plains. It is a mixture of mountain
ranges, plateaus, low hills and valleys, which is
bestowed with abundant natural resources and
flora and fauna. It is, thus, ideal for horticulture
as well as agriculture. Tea is the most
prominent crop cultivated in the region. The
region is also rich in hydrocarbon (petroleum
and coal) and mineral resources. The utilisation
of these resources, however, is not as high as
the potential and can be improved.
Despite the rich natural and human resources,
NER has been lagging behind on the economic
and social front, compared to the rest of India.
This can be attributed to difficult terrain,
extreme weather conditions and low inland
connectivity with mainland India. A narrow
passage between Bangladesh and Bhutan is
all that connects the rest of the country with
the region. The low connectivity has resulted
in a shortages of capital flowing in, which in
turn, has resulted in slow economic growth.
However, the current government of India has
rekindled its focus with the promise to foster
development in the region.

Northeast India was known as NE, but from now on, it will be known
as new economy, new energy, new empowerment. In a way, it will
become a new engine for India’s growth.

– Prime Minister Narendra Modi during inauguration of Third Indian Agriculture Research Institute,
Gogamukh, in Assam (May 2017)

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 Economic Landscape
In the second half of the nineteenth century,
NER was witnessing economic development at a
blistering pace due to rising investments and
expanding global trade. However, since the
Indian independence from The British Empire in
1947, the NER was isolated from the rest of the
country because of its connectivity — leading to a
slowdown in development compared to the rest
of the country. The difficult terrain further made
the process of development slower. This also
lead to regional unrest and socio-political
disturbances for a few years.
NER makes up ~8% of the nation’s land while
contributing only under 3% to the nation’s GDP.
It makes up 3.8% of the country’s population.
This GDP share is certainly low considering the
potential of trade with Southeast Asia.
Given the revived focus of the government to
foster development in the region and the
abundance of natural resources, NER has witnessed
strong economic growth for the past few years. The
region is witnessing an influx of investments to
better utilise the natural resources. Over the years
2012–17, the region has witnessed an annualised
GSDP growth of 12.2%, which shows the great
potential of becoming the growth engine that will
give the next big push to the Indian economy.
The North Eastern Region, thus, has a great
potential to develop not just as a self-sustaining
economic unit of India but also to contribute in the
success story of the country, which is reflected by
the Prime Minister’s focus on this region.
Region GSDP Growth Rate
13.88% 14.43% 12.02%
10.40% 11.45% 10.89%
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18E
Source: Ministry of Statistics and Programme Implementation;
NEDFi Databank; NECTI estimates

Gross State Domestic Product (GSDP) at Per Capita Net State Domestic Product (NSDP) (INR)
Current Prices (in INR Crore)
9.4% 4.8% 1,03,870
4.8% 91,266
5.1% 2,70,572
90,168
4.2% 1,28,241
72,870
6.4%
60.4% 57,888
5.0% 67,303
100%=INR 4,21,124 Crores 1,19,150

Arunachal Pradesh Assam Manipur Meghalaya Average Per Capita

Mizoram Nagaland Sikkim Tripura Net National
Source: Ministry of Statistics and Programme Implementation; NEDFi Databank

Assam has the highest population in the region — accounting for more than half of the entire region’s
population. This also explains the high GSDP share within the region. The region is however,
characterised by economic backwardness compared to rest of the country. The per capita NSDP is lesser
than the rest of the country, which is also true for four other states in the region. Only Sikkim,
Arunachal Pradesh and Mizoram have higher per capita NSDP than the national average.
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People and Culture
NER is predominantly rural, with ~81.7% of the understood and spoken in most areas of the NER.
population living in the countryside.
Horticulture and agriculture are the principal NER has a higher literacy rate vis-à-vis the national
sectors in the region. Agriculture provides average, however, slow industrialisation rate has led
livelihood to ~70% of the region’s population. to high unemployment. Inadequate skill development
The states are culturally, ethnically and infrastructure adds to unfavorable employability
linguistically diverse and represents India’s amongst the population.
unity in diversity. NER houses 200+ tribal
The states Arunachal Pradesh, Meghalaya, Mizoram
groups, a number which represents almost
and Nagaland are predominantly inhabited by tribes,
one-third of the total number of tribal groups in
with a certain degree of diversity among the tribes.
the country. The tribal groups speak a variety
Whereas, other states, namely Assam, Manipur, Tripura
of Tibeto-Burman languages and dialects. In
and Sikkim are inhabited by people of various religious
fact, there are over 220 languages spoken in
denominations including Hindus, Christians and
the region, with 15 languages considered as
Muslims and a combination of local tribes and
the official languages of the region. English and
communities. This unique diversity of the region
Hindi are the most common languages
represents India’s unity in diversity.

State wise Population (Lakhs)

312.06

36.74 29.67 28.56

6.11 19.79 10.97 13.84

Tripura Sikkim Nagaland Mizoram Meghalaya Manipur Assam Arunachal

Pradesh
Rural Urban
Source: 2011 Census
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 Section 2

Political Landscape and

The Role of Government

Look East Policy

Since the Independence of India in 1947, many
Indian leaders, (including the then Prime Minister
Jawaharlal Nehru), had recognised the importance
of Southeast Asia, which offered an opportunity
for India to forge close political links. However,
India was unsuccessful in its efforts due to the
inter-state disputes and apprehensions among
individual Southeast Asian countries and India’s
tussle for power with China. In 1991, the cold war
had just ended and India successfully
implemented its new economic policy of
Liberalisation and Globalisation. With the new
economic policy, the government of India, under
the leadership of Narasimha Rao, was able to
revive its their focus on Southeast Asia. The then
government initiated a ‘Look East Policy’, which
was aimed at fostering economic and strategic
relations with the Association of Southeast Asian
Nations (ASEAN) countries. The policy also
envisaged the development and growth of NER
mainly through trade and national security that
lagged in the region since independence. The Look
East Policy was successfully pursued by the
governments under Prime Ministers
Shri Atal Bihari Vajpayee and Manmohan Singh.

Act East Policy Government’s Efforts in NER

Prime Minister Narendra Modi has further
prioritised the ASEAN relationships, amplifying
this policy to an evolved version ‘Act East Policy’,
with the aim to have a more proactive focus in the
ASEAN region. The government, under his
leadership, views NER as a future economic
corridor between India and ASEAN region. Since
the evolution from Look East to Act East Policy,
the NER region has witnessed a number of
initiatives across sectors.
With the agendas of Look East Policy and NER’s
development, the Government of India had
launched many initiatives over the years to foster
development in the NER. Notably, North Eastern
Council (NEC) and Ministry of Development of North
Eastern Region (MDoNER) came into existence in
1972 and 2001, respectively.

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Planned Gross Budgetary
Support for NER
In October 1996, it was decided that Central
Ministries/Departments, unless specifically
exempted, will set apart 10% of their Plan Gross
Budgetary Support (GBS) for the North Eastern
Region (NER) to ensure a quantum jump in
budgetary resource flows to the region and to fill
the backlog and gaps in basic minimum service
and infrastructure.
In the 2019–20 Union Budget, the Government of
India increased NER’s allocation to INR 50,169.39
crore from INR 39,201 crore (of 2018-19).
Major Functions and Responsibilities of MDoNER
• Coordination with Ministries: MDoNER
coordinates with various
ministries/departments primarily concerned
with development activities in NER. However,
respective ministries/ departments remain
responsible for implementation of programmes
in their respective fields.
• Monitoring expenditure by Central
ministries/departments and Central
Resource Pool for the North East (NLCPR):
The ministry is responsible for monitoring and
tracking expenditure under the mandatory 10%
GBS by ministries/departments
(non-exempted). In 1997-98, when it was
found that the actual expenditure of
ministries/departments for NER is less than the
mandatory ceiling of 10%, the government
took the decision to create a “Central Resource
Pool” into which the unutilised portion of the
10% earmarked GBS will accrue at the end of
the financial year. The Ministry of DoNER also
monitors ministry-wise
expenditure/surrendered amounts for the
purpose of ascertaining the accrual to the
Ministry of Department of
Development of North Eastern
Region (MDoNER)
The Department of Development of North Eastern
Region (DoNER) was set up in 2001 to coordinate
the developmental efforts in the North Eastern
Region (NER). It was converted into a full-fledged
Ministry in 2004. It is the only ministry with
territorial jurisdiction. The ministry of DoNER aims
to give focused attention to address the special
needs of NER.
NLCPR Pool in consultation with Ministry of
Finance. The aim of the NLCPR pool is to bridge
gaps in the infrastructure sector through
financial assistance.
• Capacity Building: The ministry aims to provide
funding for overall capacity building of state
government machinery of the North Eastern
States to improve governance and delivery by
assisting in skill development, improving
knowledge and competencies and improving
capacity of all North Eastern State Governments.
• Advocacy and Publicity: The ministry aims to
market the region as a business, tourist &
educational hub. It carries out this objective
through mega events, active media campaigns,
thereby generating interest in investors and
tourists to accelerate development in the region.
It also provides financial assistance to various
state governments to conduct such activities.
• International Cooperation: In addition, the
ministry is responsible for international
cooperation vis-à-vis the region’s development.
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 Institutions under MDoNER
• North Eastern Council (NEC): NEC extends
financial assistance to states and institutions in
the NER in different sectors, which inter alia
include Agriculture and allied sectors, Power
and Water Resources, Industries & Minerals,
Transport & Communication, Medial Health
Sectors, Human Resources Development,
Science & Technology, Tourism etc. Since its
inception, NEC has focused on improving
connectivity of the region, which has been a
major bottleneck for all developmental
activities.
identifying and promoting theme-based regional
and international circuits, branding and
marketing of North East India Tourism – Paradise
Unexplored, advisory role in policy making at
regional level, work as a nodal agency for
coordination with the ministry.
• North Eastern Handicrafts and Handlooms
Development Corporation Ltd. (NEHHDC):
NEHHDC was established in the 1977 in
Meghalaya to promote and develop Handicrafts
and Handlooms sectors in NER.

• North Eastern Region Community Resource
Management Project (NERCORMP):
NERCORMP is a livelihood and rural
development project aimed at transforming the
lives of the poor and marginalised tribal
families in NER in a way that contributes to the
preservation and restoration of the
environment. It is a joint developmental
initiative of the NEC, MDoNER, Government of
India and International Fund for Agricultural
Development(IFAD).
• North East Tourism Development Council
(NETDC): The main objective of NETDC is to
promote and support tourism in the NER by
• North Eastern Regional Agricultural Marketing
Corporation Limited (NERAMAC): NERAMAC was
established in 1982 as a marketing organisation
to support farmers of NER. It has been under the
administrative control of MDoNER since
MDoNER’s inception. The body is also aimed at
fostering development of the region’s
post-harvest technology (food processing and
storage). With its objective, NERAMAC is
incubating potential entrepreneurs by providing
them exposure of advanced processing
technologies and assisting the farmers by
providing them appropriate market linkages as
well as remunerative prices for their produces.

The Government of India along with the Ministry of Development of North

East Region, and various state governments have undertaken several key
initiatives to foster development of NER in various sectors. In this report,
we have highlighted some initiatives in the Section 3: Key Thrust Areas.

14
NER is Part of the This building or re-building of the cities include
considerations of sustainability and inclusion, as
‘Smart Cities’ Programme per the programme.

The Government of India launched ‘Smart Cities’
programme on June 25, 2015. As part of the
programme, the government envisaged the
development of 100 Smart Cities by 2024. The
programme is aimed at fostering socio-economic
development of select cities by enhancing the
available core infrastructure needed for
satisfactory living standards in urban areas.
Convergent to the Act East Policy, Smart City
Programme considered the NER in its agenda. Nine
cities from the North East were selected for the
programme namely Pasighat and Itanagar
(Arunachal Pradesh), Guwahati (Assam), Imphal
(Manipur), Kohima (Nagaland), Namchi and
Gangtok (Sikkim), Agartala (Tripura) and Aizawl
(Mizoram).

The agenda of the Smart City Program for NER includes the following:

Continous Good Effective Sustainable

Electricity Governance Waste Environment
Supply Management

Efficient Urban Safety And Affordable Health And

Mobility And Security Of Housing Education
Public Transport Citizens

Robust IT Adequate
Connectivity And Water
Digitalisation Supply

15
 Section 3

KEY THRUST AREAS

"The Prime Minister has always regarded the Northeast as 'Ashta

Lakshmi' and given prime importance to its development by focusing
on road and rail connectivity, IT sector development, energy, industrial
development and education facilities”.

– Amit Shah, Current Minister of Home Affairs (June 2018)

Transport Agriculture and Tourism

Infrastructure
Transport Infrastructure is
the pivot through which the
NER can develop. It directly
or indirectly can foster
growth in all other thrust
areas of the region.
Food Processing
Agriculture is the prime
sector of the region. The
vast amount of agriculture
resources make up a huge
food processing potential.
Being referred to as a
pristine destination for
tourism, NER has vast
untapped tourism potential
that can drive India’s and the
region’s economy.

Energy
Abundance of hydrocarbon
(oil, coal and natural gas)
resources and high potential
of renewables makes the
region important. Energy
sector in the region is
challenged by the difficult
terrain and lack of capability
to utilise the potential.
Manufacturing
NER is well—endowed with
mineral deposits, natural
landscapes and forests, and
tea estates, which offer a
great scope for services,
industrial, and
manufacturing investments.
Internet and
Communication
Technology
Internet and communication
technologies are the levers
that promise to raise the
potential of all other thrust
areas.

Education and Skill Development

Development of skills will help support
development of all other thrust areas.

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Transport
Infrastructure
Transport infrastructure is arguably the pivot
through which a region develops. An efficient
transport system directly or indirectly leads to
economic and social development of a region, by
lowering the cost of operations and supply chain.
The challenge to the transport infrastructure
posed by the difficult mountain terrain of the
region is amplified by the only road and rail
connectivity through the chicken neck 22 Km wide
Siliguri Corridor between Nepal and Bangladesh
joining mainland India.
All land trade between North East India and the
rest of the country traverses Siliguri, owing to the
lack of a free-trade agreement between India and
Bangladesh. However, in September 2018, India
proposed a free-trade agreement between the
two countries.
For instance, the
distance between BHUTAN
NEPAL
Agartala and Kolkata
through the Silliguri Siliguri
corridor is three times
more, compared to a
passage from
Bangladesh. BANGLADESH
Nepal Border
Bhutan Border
Bangladesh Border
Key Initiatives
• India and Bangladesh have been working
closely to improve railway connectivity
between them—resulting in developments in
NER with commencement of Agartala-Akhaura
rail project (announced by the two prime
ministers in Sept 2018) and proposed revamp
of Chilahati-Haldibari rail connectivity.
• The Prime Minister inaugurated the Bogibeel
Bridge, India's largest railroad bridge, on
December 25. The 5 km structure, constructed
over the Brahmputra river intends to connect
Dibrugarh in Assam and Dhemaji district
bordering Arunachal Pradesh. This bridge
reduces the travel time between the two
points by four hours.
Railways
Tripura, Nagaland and Assam are predominantly
connected with most railway lines due to the
presence of plains. The master plan for
development of railway infrastructure by the GOI
envisages connectivity to all state capitals with
expansion to unconnected areas and foster trade
by connectivity to neighboring countries. Even after
the announcement of major railway projects by the
railway ministry, there are frequent delays, which
are bolstered by difficult terrain, security situation,
land acquisition and investment-related issues.
As per the master plan by the railway ministry,
there are 37 projects underway, of which the
majority project involves setting up of new railway
lines to bolster connectivity.
Magnitude of projects under
Northeast Frontier Railway
Magnitude
Type of Project
(length of proposed lines)
Setting up new railway lines ~ 1,870 km
Replacing railway track gauges ~ 1,315 km
Converting from single-track
~ 1,870 km
to double track
Source: Northeast Frontier Railway (as of May 2019)
• A 51km long rail link ‘Bairabi-Sairang rail line’ is
expected to be operational soon. The project will
encompass a construction of 23 tunnels
spanning 9 km, along with 36 major bridges and
147 minor bridges. The railway line will include
three stations – Hortoki, Kawnpui and Mualkhang,
which will be equipped with contemporary
facilities like escalators, foot over-bridge, etc.
• The government has planned railway
connectivity in Aizawal by 2022.
• Under Jiribam-Imphal project, Manipur will be
connected with Jiri Bam, including an extension
of the bridge with a pier height of 141m,
resulting in the tallest rail bridge in the world.
17
 Road and Highways

Roads are arguably the most important

transport infrastructure, driven by less
complexities and low costs vis-à-vis
other transport infrastructures,
especially in the mountain terrain of the
NER. When compared to the rest of
India, the region is characterised by a
higher density of road per
capita—skewed by high road densities of
Assam, Nagaland and Tripura. The road
density of other states is subpar, with
Arunachal Pradesh, Sikkim and Mizoram
having the lowest connectivities.

Given their importance, the government

of India has prioritised addressing road
connectivity gaps in the region. The
government aims to develop a national
road network between the major cities
in the areas, which consists of 10,500
km of roads under multiple programmes
and schemes. In addition, two major
schemes were launched with the aim to
improve socio-politically as well as
inter-state neglected roads by North
East Council.

Key Initiatives
• Interstate highway between Doimukh and Harmuti
with 17.47 km road for the connectivity between
Assam and Arunanchal Pradesh completed in
January 2019.
• 120.74 Kalwewa Yagyi road section
• 69 bridges along with the approach road
on 14.70 km Tamu Kyigone Kalewa (TKK)
road section.

• For India-Myanmar-Thailand Trilateral Highway, • Kaladan multi-modal transit transport project

India undertook construction in two sections and to provide an alternative route to the North
will be completed by 2021. East which will connect Myanmar’s Sittwe port
to the region.
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 1. North East Road Sector
Development Scheme (NERDS):
The strategic projects for roads and
bridges include Doimukh Harmuti,
Tura Mankachar and Wokha Merapani
Golaghat of 85 kilometres and will be
led by the National Highway and
Infrastructure Development
Corporation (NHIDCL), at an
estimated cost of ` 213.97 crores. A
total of 14 such projects will be
undertaken by the NHIDCL.

2. Special Accelerated Road

Development Program for North
East (SARDP NE):
Despite being the largest state in the
country, Arunachal Pradesh has the
least road density. The Union
Ministry of Road and Transport is
planning to expedite the Trans
Arunachal Highway project.The
ministry will be driving the Special
Accelerated Road Development
Program of Roads and Highways,
covering 2,319 kilometres.
Construction plans for the Arunachal
Frontier Highway and East West
Corridor have also been proposed.

• Initiation of two phases of Meghalaya North East • Construction of two lane balanced cantilever
Connectivity projects i.e. Tura Dalu (NH51) and bridge over river Kanaka at KayuDzongu in
Shillong Dawki (NH 40) with the potential to North Sikkim.
improve connectivity with Bangladesh.

• Initiation of two-phased Aizwal Tuipang (NH 54) of

380 km road in South Mizoram.

19
 Airways
While the region realises the
importance of air connectivity,
the cost of establishment and
operational challenges has
resulted in a deficiency of
airports in the area. In fact,
the region has seen a decline
of number in the airports-from
17 to 11. Additional airports
‘Pakyong Airport’ and ‘Tezu
Airport’ were commenced in
September 2018 and February
2019, respectively.

The North Eastern Council, a

nodal agency for economic
and social development of the
Northeast, is funding
upgradation of infrastructure
in the operational airports.
The council, along with the
central government, is aiming
to link Guwahati with the rest
of the states and neighboring
countries in the region, as it
has the majority of traffic.

Key Initiatives
• Pakyong Airport in Sikkim was inaugurated by
Prime Minister Narendra Modi in September
2018. The airport is situated ~30 km from
Gangtok, atop a hill at 4,500 feet above sea
level, making it one of the five highest airports
in the country. It was developed at a cost of
INR 605 crore.
• All eight district capitals are now connected by
the state government’s helicopter service,
which connects at least 2 destinations in a day.
• The state government has upgraded and
operationalised seven advanced land grounds
in the district capitals.

• Tezu Airport in Arunachal Pradesh was
inaugurated by the Prime Minister in February
2019. The airport aims to provide connectivity
to neighboring districts like Lower Dibang
Valley, Anjaw, Namsai and Dibang Valley. The
airport has been built on a ‘no-frills model’,
which involves keeping the essential features
only. The airport has no conveyor belts, no
aerobridges and limited air conditioning to
keep the cost of operations low.
• The construction of Hollongi Airport near
Arunachal Pradesh’s capital, Itanagar was
expected to commence in 2019. The cost of
the project is estimated at INR 1055 crore.
• In addition, the North-Eastern Council has
taken up runway extension works in Umroi
(Shillong) Airport to enable bigger aircrafts to
land. Similarly, work is underway to allocate
hangars at LGBI Airport in Guwahati.

20 19
Waterways
The region has ~1800 km of river
routes, which signifies a high
transportation potential. In fact, prior to
the construction of roads in NER,
Brahmaputra and Barak rivers were
predominately relied on as the main
transportation medium. These rivers are
now classified as national NW2
(Brahmaputra) and NW6 (Barak). In
addition to these rivers, the region is
abundant with other large and small
rivers such as Burnishing, Katakhal,
Subansari, Disang, and Gangadhar.

Inland waterways (especially in the

plain areas of NER) have great
advantages associated with them due
to the presence of perennial rivers, thus
representing an economical mode of
transportation. Moreover, this mode of
transportation generates the least
amount of pollution, which is a part of
an important agenda of the government
curbing pollution.

The government thus acknowledges

that this sector is vastly underutilised
and has laid out plans that can tap some
of this potential.

There is only one Inland Water

Transport (IWT) terminal (Pandu, Assam)
that meets the minimum requisite
criterion of a terminal. The ministry of
shipping conducted a pilot run on NW2
from 24–29 April, 2017 as part of IWAI’s
sustained efforts to promote IWT on
National Waterways in the NER. Further,
the development of projects laid on
various tributaries of the NW2 is
expected to generate cargo movements
of about 50-100 million metric tons
over the next two decades.

21
 Tourism

NER provides a plethora of less explored tourism

opportunities including adventure, pristine natural
According to the tourism state ranks
environment, wildlife, wellness, tea tourism,
by the Ministry of Tourism, all states
pilgrimage and cultural. The region at the focal point
except Sikkim rank extremely low in
of the Himalayas, the Naga Khasi and Garo hills, the
domestic and foreign tourist visits.
numerous deep valleys, snow-capped mountains and
reserved forest gathers a lot of traction by the
tourists. Moreover, NER houses a large number of
ethnic tribes, historical and religious sites, which NER’s tourism future is positive though,
further attract tourists. Well they certainly have the the region is witnessing incremental
potential to attract tourists. Y-o-Y growth. For instance, over the year
2016 and 2017, the number of tourist
NER, which roughly shares 8% of India’s total visits increased by an enormous rate of
geographic area and is well known for its serene 22.8% and 16.7% of the total domestic
beauty, only represents 0.58% of total tourist and foreign travelers, respectively. This
(domestic and international) visits of the country. can be well attributable to the efforts
This low share can be predominately attributed to put in by the government. If NER were to
inadequate tourism infrastructure (including realize its potential the region’s tourism
transport and accommodation infrastructure). Other should continue to grow at this
factors that are responsible the low share of tourism incremental pace. To bolster this growth
include insufficient marketing and promotions, poor rate the government of India has put in
brand perception, complex travel permit procedures various key initiatives.
and scarcity of skilled manpower.

State-wise Domestic and Foreign Visits in North East India (in thousands)

DOMESTIC FOREIGN

State 2016 2017 2016 2017

Assam 5,160.6 6,052.7 19.5 21.8

Sikkim 747.3 1,375.9 66.0 49.1

Meghalaya 830.9 990.9 8.5 12.1

Arunachal Pradesh 385.9 444.0 6.6 7.1

Tripura 370.6 398.7 36.8 69.9

Manipur 150.6 153.5 3.1 3.5

Mizoram 67.2 67.8 0.9 1.2

Nagaland 58.2 63.4 3.3 4.2

Source: India Tourism Statistics, Ministry of Tourism (2018)

22
Key Initiatives
• The influential Association of Domestic Tour
Operators of India has been organizing
international tourism marts, an annual event to
highlight the tourism potential of the region in
domestic and international markets
• The home ministry has removed the restriction
over the protected areas of Nagaland, Mizoram
and Manipur for 5 years from 2018 2022 in
order to gain more tourist footfalls in the
region.
• Central and State government is encouraging
young entrepreneurs to enter the space of the
tourism industry. The Indian Institute of
Entrepreneurship in Guwahati, under the
ministry of skill development, has trained 180
young people to set up their own venture in
the tourism sector.
• North East Special Infrastructure Development
Scheme (NESIDS) has been propelled to create
a center foundation in North East Region with
spotlight on the travel industry. The North
Eastern Council is providing financial help to
States and establishments for creating the
travel industry
• NEC has affirmed the arrangement of the
North Eastern Tourism Development Council on
a Public Private Partnership model to advance
territorial traveler circuits in the district
including coordinated efforts over the outskirts
with Myanmar and Thailand.
23
 Agriculture

Agriculture (including forestry and fishing) is the

largest sector in NER, both in terms of occupancy
and contribution to the region gross product. The
sector contributes 22–23% to the region’s GSVA
(Gross State Value Added). Agriculture (excluding
forestry and fishing) provides livelihood to ~70%
of the region’s occupants. Moreover, the sector is
witnessed to have an incremental annualised
growth rate of 11.9% over the years 2011–2017,
which showcases the vast growth potential of the
region. Consequently, the sector demands
importance in matters of the region development
plan. With the available biodiversity, fruits,
vegetables herbs and aromatic plants, NER has
the potential to transform into a commercial hub
for Agri-Business.

Tea and rice are NER’s major plantation and crop,

respectively. Other important crops and
plantations include wheat, maize, small millets,
jute, spices, pulses, foodgrains, oilseeds, cereal
crops, vegetables and coffee. The region is
well—known for Agri-Horti produces such as Khasi
Mandarin of Meghalaya, Kachai Lemon of Manipur
and Queen Pineapple of Tripura.

Despite the agro-friendly climate and agrarian

roots present in the region, the sector faces the
plight due to challenges such as inadequate price
for producers, lack of production insurances and
irregular power supply. This is further intensified
due to inadequate marketing and wastages (due
to the lack of processing infrastructure).

Agriculture, forestry and fishing contribution to regions

Gross State Value Added (INR Crore)
Food Processing
Food processing is being looked at as an
CAGR 11.9% effective path to utilise the region’s high
87,174 agriculture potential. However, its potential is
83,170 currently underutilized. According to NERAMAC
75,087
65,616
(North Eastern Regional Agriculture Marketing
58,488 Corporation Limited), food processing is only
49,623 prevalent at primary levels with an expansion
scope at secondary and tertiary levels. One of
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17* the issues faced by the sector is the lack of cold
Source: NEDFi Databank (2019) storage infrastructure that allows the reduction
*Tripura’s share is considered same as previous year due to unavailability of food wastage.
24
Agriculture and Food Processing is considered as the haven that creates
employment opportunities across sectors– including transportation, packaging,
advertising and marketing. Efficient strategies to boost agriculture in the region
has the potential to boost rural incomes and shift of workers in other sectors like
manufacturing and packaging. The Government of India has been undertaking
many steps to boost this sector in the region.

Key Initiatives
• The Ministry of North Eastern Regional
Agricultural Marketing Corporation is boosting
the participation of potential entrepreneurs by
assisting them in bringing advanced processing
technologies.
• Organic Value Chain Development for NER has
been implemented over the years 2015-16 to
2017-18, with the aim to develop certified
organic production in a value chain model that
links growers with the consumers.

• They are also providing the farmers with
appropriate market linkages and remunerative
prices for the produces.
• For the development of the food processing
and agriculture in the region, the Ministry is
providing a high level of subsidies and financial
assistance to the growers under various
schemes.
• Four mega food parks have been sanctioned by
the Ministry, each one at Nalbari, Aizawal,
Agartala and Dimapur and the work has been
initiated for food parks at Papum Pare in
Arunachal Pradesh. The other park at Agartala
is already operational.
• Cold storage projects with the aim to create
16330 Metric Ton cold storage (which include
2 projects each in Assam, Manipur, Nagaland
and Mizoram and 1 in Arunachal Pradesh). Four
projects have already become operational.
• 7 food testing labs have been assisted to
provide infrastructure for food safety and
quality testing in Guwahati, Tezpur, Manipur,
Nagaland, Sikkim and Tripura
• Launch of National Bamboo Mission to focus on
the development of bamboo amongst all North
Eastern States that has nearly 60% of the
countries bamboo growing stock. This
envisages incentivising the construction
industry to use bamboo in construction.
• An amount of INR 14.21 crore has been
released to upgrade and strengthen the liaison
office of Indian Institute of Food Processing
Technology, Thanjavur Tamilnadu, which was
set up in Guwahati in 2010. The unit has a
food processing training, centre and skill
training programmes are organised there for
the benefit of farmers, SHG members, and
youth. The aim of this initiative is to establish
food processing business incubation as well as
training centre.
• In addition, the Government of India is striving
to spread awareness amongst the farmers as
well as youth through yearly events and
seminars in the region.

25
 Education Skill Development and Healthcare

Education and Skill Development

The North Eastern Region of India has a literacy rate higher than the country’s average. This is a remarkable
statistic, considering the fact that the region faces challenges in the form of distant institutions (due to
difficult mountain terrain) and a large number of spoken languages. As per the 2011 Census, Mizoram has
the highest literacy rate (91.3%) and Arunachal Pradesh has the lowest rate (65.4%). In fact, Mizoram’s
literacy rate is the second highest in India. Only Assam and Arunachal Pradesh have a lower literacy rate
than the India ‘s average (~74%).

From the 2011 Census, it was also observed that the female population has a lower literacy rate than males.

Literacy Rate & Number of Universities and Colleges

State Total Male Female Universities Colleges ITIs
Arunachal Pradesh 65.4% 72.6% 57.7% 9 30 6*

Assam 72.2% 77.8% 66.3% 21 512 28

Manipur 76.9% 83.6% 70.3% 5 87 11
Meghalaya 74.4% 76.0% 72.9% 8 60 11
Mizoram 91.3% 93.3% 89.3% 3 30 2*
Nagaland 79.6% 82.8% 76.1% 5 66 2*
Sikkim 81.4% 86.6% 75.6% 7 17 3*
Tripura 87.2% 91.5% 82.7% 4 52 18
Source: Census 2011, State Website, NECTI Analysis *Latest figures not available

Skill Development and While the thrust areas, such as agriculture,

Higher Education
While literacy is higher, the skills in the region can
be considered lower as compared to rest of India.
One reason for this is that industrialisation has
been really slow, which has led to inadequate skill
development infrastructure. This has directly
resulted in unfavourable employability amongst the
population. For instance, the region has a 4% share
of the youth population of the country in group of
5-35 years with a high rate of unemployment
amongst them. Other headwinds include the quality
of teachers, difficult mountain terrain and
inadequate infrastructure (such as unequipped
labs). To add woes to this, there is a heavy
outmigration of youth, with the most skilled and
qualified population preferring to work elsewhere.
26
transportation and manufacturing are being
pushed for growth, skill development and higher
education. They not only become important but
critical to facilitate the anticipated growth levels.
NER houses 60 universities, along with 854
colleges. Amongst all the states in the region,
Assam has the maximum number of colleges and
universities. In fact, the state also offers
industrial training through 30 specialised
institutes. This is because the state has higher
GSDP and higher industrial activity as compared
to the other states in the region.
NER does house several institutes that offer
technical (vocational) education, however, there
is an imbalance between the number of such
institutes and the demand, with the latter being a
lot higher.
Healthcare
Healthcare industry has witnessed sizeable people, flash floods, heavy rainfall, waterlogged
growth over the past few years, driven by roads, potholes, landslides, insurgency problems
gradually rising medical tourism in the region, of the states, poverty and poor living standards of
medical awareness amongst the inhabitants and the people. NER as a whole has a sizeable
many private healthcare providers setting up population that is underserved or undertreated.
operations. However, the developments in the
sector have been predominately limited to
Assam, Meghalaya and Manipur only where most
of the medical colleges are located. In fact, in
the region, only Assam, Meghalaya, and Manipur
have witnessed a rise in medical tourism (from
neighbouring countries such as Bangladesh,
Bhutan, Nepal, Myanmar, etc.), with Guwahati
becoming a new destination for health
services.Overall the sector is ailing in NER,
driven by factors such as lack of medical
awareness, low penetration of medical
insurance, and skill shortage (low doctor to
population ratio). Other factors that have
hampered the development of sectors include
insufficient transport and communication
facilities, unavailability of standard
accommodation, inadequate public services
systems, frequent power cut-offs,
communication gaps between tourists and

Key Initiatives
• The state governments have undertaken
various steps to bolster the skill development
in the states. They have identified areas of
development and are building education
infrastructure to raise the skills in the region.
• NITI Forum for North East: This regional
forum was constituted to identify various
constraints in the way of accelerated, inclusive
but sustainable economic growth in the North
East Region of our country, and also to
recommend suitable interventions for
addressing the identified constraints. Through
the forum healthcare and education have been
identified as its key focus areas, and GOI are
undertaking various initiatives to foster
development in these areas.
• National Rural Health Mission (NRHM): Under
NRHM, NER states have been given a special
focus. The thrust of the mission is on
establishing a fully functional, community
owned, decentralized health delivery system
with inter-sectoral convergence at all levels, to
ensure simultaneous action on a wide range of
determinants of health such as water,
sanitation, education, nutrition, social and
gender equality.

27
 Information and Communications Technology

Telecommunications Key Initiatives

The mobile connectivity in the region has been low
when compared to the rest of the country. • A comprehensive Telecom
According to TRAI, NER has poor tele-density and Development Plan for the Northeast
the quality of services, which reflect the problem of States, with the aim to deploy 6,673
the telecommunication sector in NER. In addition, mobile towers in 8621 identified the
telecom connectivity on National Highways and uncovered villages has been
broadband penetration is also inadequate. It is launched.
observed that telecom penetration is drastically • BharatNet (Phase-II) has been
higher in urban areas as compared to the rural launched, which is aimed to connect
areas. 6,407-gram panchayats or village
blocks in North East that have
Telecom Density in NER
unfavourable satellite bandwidth.
NER
Category Assam (except Assam and Sikkim) All India • Multi-band communication satellite
GSAT-11 launched in 2018 by Indian
Rural 65.4% 72.6% 57.7%
Space Research Organisation (ISRO)
Assam 72.2% 77.8% 66.3% with the aim to boost high-speed
internet in northeastern states and
Urban 76.9% 83.6% 70.3% hilly region.
Total 74.4% 76.0% 72.9% • Government is encouraging private
Source: MDoNER, TRAI companies to invest in the region. For
instance, Bharti Airtel has recently
deployed 40 towers in the region. It
won a single bid contract to put up
2,005 mobile towers, with the
approval of INR 1660 crore worth
government funding in the year
2017.
• MDoNER in collaboration with
Universal Service Obligation Fund has
taken forward many initiatives to
bolster telecom and internet
connectivity in the region. They
include recommendations of
collaboration with the government of
Bangladesh, setting up National
Internet Exchange of India in Assam,
inspiring private telecoms to boost
operations in the region and guiding
state governments to address
implementation issues.

Source: Telecom Statistics 2018, Department of Telecommunications,

Government of India and NEDFi Data Bank

28
Information Technology
Government of India is focusing on
information technology as the sector that
enables sustainable development and
growth across sectors in NER. It is also
looked at the means for enabling social
upliftment in the region through
e-governance. In fact the Ministry of State
for Electronics and Information Technology
(MeItY) has laid down its roadmap for
known as Digital North East Vision 2022.
The Vision Document emphasizes
leveraging digital technologies to transform
lives of people of the north east and
enhance the ease of living.

Key Initiatives
• Software Technology Parks of India
(STPI) Centres were set up in 2006 to
promote IT Exports from the region.
• The North East BPO Promotion
Scheme (NEBPS) has been initiated
under Digital India Programme to
incentivise BPO/ITES Operations in
NER for the creation of employment
opportunities for the youth.
• National Knowledge Network (NKN)
was set up to inter-connect all
knowledge institutions across the
country through high speed data
communication network in order to
encourage sharing of resources and
collaborative research.
• Common Services Centres (CSCs):
The Government initiated the CSC 2.0
Scheme in August 2015 to improve
accessibility to technology and digital
services for citizens in rural and
remote areas of the country.
• Other initiatives include setting up of
digital Aadhar, smart virtual
classrooms and Wi-Fi enabled
education campuses.
29
 Manufacturing, Mining and Raw Materials
NER is well endowed with mineral and
hydrocarbon reserves which according to
Geological Survey of India (GSI), if utilised can
generate revenue that exceeds INR 10 lakh crore.
If this were to happen, the region will flourish
along with the rest of India. The mineral sector
drives the growth of the country and not only
does contribute to the GDP, it also acts as a
catalyst for the growth of other core industries
such as power, steel, cement, which in turn are
crucial for the economy.
Coal, limestone, clay, granite, oil and natural gas,
and iron are some of the most prominent natural
resources. According to Mulkh Raj Jarngal
(Additional Director General, GSI), a total resource
of 1,642.64 million tonnes of coal have been
estimated from the 3 states of Meghalaya, Assam
and Arunachal Pradesh, whereas limestone
reserve of 10,108.6 million tonnes is estimated to
be prevalent from Meghalaya to the southern part
of Assam. In fact, Meghalaya is also abundant with
Uranium resources.
Contribution to regions Gross State Value Added (INR Crore)
Mining
CAGR 12.7%
32,828
31,950
17,571 18,082 17,602
17,460
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17*
Source: NEDFi Databank (2019)
*Tripura’s share is considered same as previous year due to unavailability
30
Apart from food (covered under other thrust areas
of the report) and mineral industries, the region is
also a manufacturing haven for handicrafts and
textiles.
Raw materials form a major part of its trade with
Myanmar and Bangladesh. Meghalaya, for
example, exports stone boulders, limestone and
horticulture products to Bangladesh. These are
processed and re-imported to India as stone chips
and cement.
The extensive scale of NER’s natural resources
makes the manufacturing and mining sector a
lever that can and will drive development across
the various thrust areas – including power,
transportation, skill development and education.
Increasing utilisation of the potential of the sector
can be witnessed from the high Gross State Value
Added growth of the manufacturing sector in the
region. Over the years 2011–2017, the
manufacturing sector witnessed an incredibly high
annualised growth rate of 10.3%.
Manufacturing
CAGR 10.3%
42,299
37,946
33,408
30,473
26,770
25,837
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17*
Despite their economic importance, the mining industry in the northeast has been systemically plagued by a
multitude of challenges. These challenges primarily stem from ambiguous policies and regulatory hurdles that
have led to unchecked corruption and environmental degradation. In some regions, this has resulted in the
displacement of the indigenous people of the state, culminating in a ban on coal mining by the National Green
Tribunal. Various state governments and central government have undertaken many initiatives to overcome
the headwinds in the region. However, these policies and efforts need to be synchronised for the collective
development of the region

Key Initiatives Other Initiatives

• North East Industrial Development Scheme (NEIDS): In March • The Ministry of Textiles is
2018 GoI approved this scheme with a financial outlay of INR 3000 implementing projects
crores up to March 2020. The purpose of this scheme is to promote worth INR 1,050 crore for
employment in the North Eastern States. The government is handlooms, handicrafts,
incentivising primarily the MSME Sector through this scheme. sericulture, apparel, etc.
Government is also providing specific incentive through the scheme
to generate employment. • In addition, the government
is encouraging businesses
• State Industrial Policies: Various states have implemented to set up operations in NER
industry policies to foster the development of industrial by providing various rebates
infrastructure in the region. Some of the state policies are: and subsidies

• Industrial and Investment Policy of Assam 2014 • The government also

• State Industrial Policy 2008 (Arunachal Pradesh) encouraged local production
• Tripura Industrial Investment Promotion Incentives Scheme, 2017 by make in Northeast
• The Mizoram Industrial Policy, 2012 movement.
• Nagaland State Industrial Policy, 2000
• The Industrial and Investment Policy of Manipur, 2017

• Hydrocarbon Vision 2030: In February 2016, the government of

India released ‘Hydrocarbon Vision 2030’ that outlines steps to
leverage the hydrocarbon sector for the development of the region
31
 Energy
Per capita consumption of electricity in the North East Transmission and Distribution:
Region is only ~300 units a year, which is significantly Dispersed demand, difficult terrain,
lower compared to the country’s average of ~1,000 units a hostile weather and lack of qualified
year. Despite the low energy consumption, the region still manpower has resulted in inadequate
suffers from power shortages, which can be attributed to transmission and distribution system
low plant load factor and grid balancing problem, weak in the region, which has further led to
connectivity with the eastern grid and limited carrying and irregular power supply in the region.
distribution capacity.
Transport Infrastructure:
The region currently has ~5,016 MW installed capacity, Inadequate infrastructure adds to the
which is a fraction of its total potential. This installed sector’s plights.
capacity represents ~1.4% of India’s total capacity. Any
growth in this sector in the region can be beneficial to the
whole country.
Key Initiatives
• In the past few years the
The region needs to mitigate the following challenges to government has undertaken and
boost energy development: announced many new power
projects in the region
Resettlement and rehabilitation: Land acquisition is
difficult due to inaccurate and incomplete data of land • In 2016, the Ministry of Petroleum
ownership. There is a need for sustainable resettlement & Natural Gas announced the
options to be conceptualised by central and state Hydrocarbon Vision 2030 for
governments. north-east India, which outlines
steps to effectively and sustainably
Environment: Because of rich flora, fauna and wildlife,
leveraging hydrocarbons from NER
hydrocarbon extraction and setting up of power plants
for energy production
poses a great risk to the environment. This has resulted in
complexities of getting clearances from Ministry of • Governments have started
Environment, Forest and Climate Change (MoEF&CC).There considering (and have deployed in
is a need for state governments and Ministry of Power to some regions) advanced grid
evaluate genuine cases to enable faster clearances. systems such as micro grids.

State wise Installed Capacity (MW)

Tripura
Sikkim
Nagaland
Mizoram
Meghalaya
Manipur
Assam
Arunachal Pradesh

Thermal (from Hydrocarbons)

Hydro
Renewable

Source: Central Electricity Authority

32
33
 Section 4

India Japan Relationship

India and Japan, two of the oldest and largest
democracies in Asia, have a high degree of
congruence at political and strategic levels. In
fact, the two countries view each other as
partners. Over the past few decades, the two
countries have collaborated to respond to global,
regional, and domestic challenges.
The relationship between the two countries is not
limited to geopolitical levels, but can be witnessed
at cultural, economic and social levels as well.
Japan has proactively taken initiatives to assist in
India’s economic and social development agendas.
In fact, it is one of the largest investors in India.
The citizens of the two nations are guided by
common cultural traditions including the heritage
of Buddhism and share a strong commitment to
the ideals of democracy, tolerance, pluralism and
open societies.
There have been several Indian translations to
Japanese Manga and evidently, anime themes are
prevalent in Indian comic con.
In addition, the popularity of the culture can be
indicated from the popularity of Japanese
handicrafts, toys, textiles and other goods in India,
and vice-versa. The rising popularity of Miniso
products in India is quite evident.
Another area where Japanese culture popularity in
India is quiet evident is food. Japanese cuisine is
gradually spreading to the Indian palate, contrary
to the belief of many culinary experts who think
that the Indian tastebuds would not be able to
handle such an exotic cuisine.

Cultural Congruence
and Popularity
The cultural similarities between the two nations
have early historic roots. As early as 6th Century
AD, the two countries had many cultural
exchanges with the introduction of Buddhism in
Japan from India. In fact, the most prevalent
religion in India, Hinduism, has the same Dharmic
roots as Buddhism.

These cultural congruense and similarities are still

felt today, and result in a natural sense of
amiability between the two nations. Further,
Japanese modern culture has been well received by
the contemporary societies in India, and has
become a part of the popular culture. This is
evident from the popularity of manga (Japanese
comic art form) and anime (Japanese animated
video content) in India.
34
It is not only the cultures that have been
influenced, but there has been widespread
intellectual influence from Japan in India. Leading
Indian intellectuals such as the Nobel-laureate
writer Rabindranath Tagore and influential
philosopher Swami Vivekanada have well regarded
Japan and Japanese intellectuals. Japan, thus, is
seen by many in India as a success story of the
East Asian model that they can safely borrow from.
“In my opinion, if all our rich and
educated men once go and see
Japan, their eyes will be opened. ”
– Swami Vivekananda, A prominent Indian philosopher
To enhance relationships, Japan is promoting
people exchanges in India. Both the countries
signed an agreement to open skies between India
and Japan which enables the carriers to operate
unlimited number of flights to the selected cities
of each country. Further, both the countries have
decided to establish Japanese language
certification courses at many higher educational
institutions in India.
Japan-India investments in India are not only
targeted to improve the infrastructure but they
also focus on the social well-being (basic human
needs and human resource development). In fact,
India and Japan have signed MOU aligned to a skill
development initiative called ‘Technical Intern
Training Program’ (TITP). The program is intended
to promote international cooperation through the
transfer of skills, techniques, and knowledge
developed by Technical Intern Trainees in Japan.
Essentially, the program involves accepting people
from India and transferring skills through
On-the-Job-Training in Japan.
Total FDI Inflows
(Japan as a % of total; April 2008–March 2018)
100%=USD 252.5 Billions
Japan 7%

Socio-Economic Partnership Rest of the World 93%

Source: Reserve Bank of India Annual Reports
Over the last decade, Japan has been the largest
bilateral aid (ODA) donor and fifth largest FDI Total Net Bilateral Aid (ODA) flows to India
investor in India – accounting for ~31% of total (Japan as a % of total DAC Donors; 2008–2017)
bilateral aid inflows (over 2008–2017) and ~7% of
100%=USD 19.0 Billions
FDI inflows (over 2000–2019) in the country.

In fact Japan has been proactive in economic and

development assistance in India. In September
2014, during Prime Minister Modi’s visit, Japan Japan 31%
pledged to invest ¥3.5 trillion (S$43 billion) in
public and private investments in India.

Through its investments, the country has

been involved in many infrastructure Rest of the World 69%
Source: OECD Data
development projects in India, such as the
upcoming Mumbai-Ahmedabad bullet train
To bolster the partnership and to discuss
project, the Delhi-Mumbai Industrial
cooperation projects, ‘India- Japan
Corridor, the Chennai-Bangalore Industrial
Coordination Forum’ (IJCF) was formed
Corridor, and the Delhi Metro, etc.
between the two countries in August, 2017.
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 Japan and North Eastern Region Development
‘Act East Policy’ is Convergent
to Japan’s ‘Free and Open
Indo-Pacific’ strategy
India’s focus on “Act East policy” is convergent to
Japans strategy of “Free and Open Indo-Pacific”, by
which it promotes connectivity between Asia, the
Middle East, and Africa. Thus, during the visit of
Japanese Prime Minister Shinzo Abe to India in
September 2018, the two countries welcomed the
India-Japan cooperation on development of India’s
North Eastern Region as a concrete symbol of
developing synergies.
In addition, in the past few years, Japan has been
actively investing in Infrastructure projects in Asia
and across the globe to increase its presence in
the sector. It is looking at NER in the same light.
Moreover, Japan is ASEAN’s third largest trading
partner, thus, further connectivity between the
ASEAN region and India could be an advantage to
Japan.
PACIFIC
OCEAN High Level Dialogue
INDIAN on Indo-Pacific Cooperation
OCEAN
India-Japan Act East Forum
With the above view and from the formation of
‘India- Japan Coordination Forum’, the two
countries set the foundation stone for the
‘India-Japan Act East Forum’ (IJAEF), during Japan
Prime Minister Shinzō Abe’s visit to India in
September 2017. The forum is regarded as a
platform that puts relevant agencies from both the
countries to collaborate and work towards the
development of the NER.
36
Some examples where Japan
has collaborated to foster
NER development:
• In June 2018, it was announced that a
~20-kilometer Dhubri-Phulbari bridge (when
completed will become India’s longest
bridge) will be funded by the Japan
International Cooperation Agency (JICA),
connecting Assam and Meghalaya over the
Brahmaputra river
• Road Connectivity Improvement Project that
includes expansion of Shillong-Dawki Bridge
and construction of new Dawki Bridge
• Construction of Imphal War Museum in
Manipur supported by Japanese organization
Nippon Foundation.
• IRIS, a youth invitation program by the
Japanese government which invites
promising young talents from North East
India to experience wide-ranging
developmental programs
• Development of water supply & sewage
facilities in Assam
• Development of Umiam-Umtru hydropower
stations in Meghalaya that provide 40% of
the electricity in Meghalaya.
• Sustainable forest management project in
Tripura
• Capacity Enhancement project for
sustainable agriculture & irrigation
development in Mizoram
• Strengthening biodiversity conservation
activities under the Sikkim Biodiversity
Conservation & Forest Management Project.
• Collaboration with local NGOs through aid for
grassroots projects (GGP) to build a
community health clinic, schools & women’s
vocational center in Manipur, Mizoram
Shaping the Emerging North
Eastern Region of India with Japan
With a clear congruence of thoughts and
economics, Japan can use its resources, as well as
experience in shaping the emerging North Eastern
Region of India. Japan’s investments and
technology can provide the means to develop the
region’s economy, whereas its experience (by skill
development programs) can make the
development permanent and sustainable. In fact,
investment should not be the ultimate agenda of
the partnership. The ultimate agenda should
include skill development so that the region is able
to grow sustainably on its own.
How can Japan Shape the Emerging NER?
Resources (Investment and Technology)
Japan can provide the additional but valuable
investment to various central and state
governments, public private partnership schemes,
and big-ticket projects that speed up the
development of the region across sectors. The
most prominent thrust area for this could be:
Transport Energy Mining
With Japan being a leader in technology, it can
enable technology transfer to the region which
makes the investments more efficient. Following
are the sectors which are in need for Tech transfer—
Transport Energy
Agriculture
Mining and Food
Processing
IT Manufacturing
Skill development will not only benefit the region,
but has the potential to be momentous for Japan’s
shrinking and aging population. Similar to India, the
NER has young population. However, in contrast to
most regions in India, the population is unable to
get opportunities to enhance its skills, with the
clear lack of skill development facilities (as
concluded in the Section 3 of this report). If Japan
were to provide skill development opportunities
for the people in NER, there could be a win-win
scenario for all. In fact, this win-win situation is
amplified when it is considered that NER people
are regarded as one of the most hardworking
people, similar to the Japanese people.
Experience (Skill Development)
Japan should establish Japanese language
certification courses, which enables Indian citizens
in the NER to avail work opportunities in Japan.
Japan should open skill development centers that
provide the first level trainings to the people.
With government assistance, Japan should enhance
its programs such as IRIS and TITP. All sectors
categorized in TITP are also the key thrust area for
the NER development. The sectors categorized in
TITP are:
Agriculture Fishery
Food
Construction Manufacturing
(Infrastructure (food processing
construction for NER) for NER)
Textile Machinery
(as part of and Metals
Manufacturing (as part of Manufacturing
in this report) in this report)
In addition, Japan can also take up initiatives that
help skill development in nursing and healthcare,
which benefits both the regions.
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 Section 5

The Road Ahead

With the enhanced focus on the North Eastern Region of India, it can be safely predicted that the region is
poised for incremental growth.

The region is poised to become a hub of connectivity, tourism, trade and commerce—driving the economic
growth in the whole of Southeast Asia. In fact, the efforts of the governments, with assistance from Japan
can truly make the region a ‘New Engine’ for the growth of India. This engine will not only drive economic
growth but will also drive the social well-being of the citizens of the country.

The current levels of industry in NER should be seen as an opportunity for the government, corporations
and people of the region to drive growth in a sustainable manner. Japan’s involvement in progress not only
helps NER grow, but can be the ingredient that helps mitigate some of the current issues faced by Japan,
such as the aging population and additional workforce. NER will further intensify the already strong
partnership between the two countries.

• Large investments NER development will result • Economic prosperity

made will trickle down in the economic and social will convert to social
to various sectors in prosperity wellbeing of the region
India, finally finding its
way to the citizens • Better social amenities

• Gateway for Trade • Better quality of life

with ASEAN countries Economic Social • People will not need to
• Direct employment for Prosperity Wellbeing migrate to other
millions regions to find
opportunities, in fact,
others can migrate to
NER for opportunities

All stakeholders involved in the development efforts of the regions should be

wary of the environmental and sustainability aspects while undertaking any
decisions – to preserve the region’s pristine environment and culture.

38
39
 About ASSOCHAM
The Associated Chambers of Commerce &
Industry of India (ASSOCHAM) is the country's
oldest and most agile apex chamber, always
evolving with the times, ever since it was set up
in 1920. ASSOCHAM reaches out to and serves
over 4.5 lakh members from trade, industry and
professional services through over 250
associations, federations and regional chambers
spread across the length and breadth of the
country. It has built a strong presence and has
also spread its wings in the key cities of the
world.
With a rich heritage of being led by stalwarts of
independent India, like JRD Tata, Nani Palkhivala,
H P Nanda, L M Thapar, A N Haksar and Raunaq
Singh, among others, ASSOCHAM has shown the
ability to transform itself into contemporary
corporate India and of late has emerged as the
'Knowledge Chamber', leveraging the country's
strength in the knowledge - led global economy.
Be it education, health, manufacturing,
banking-finance, international trade, energy,
As the ASSOCHAM prepares for the centenary
human resource, science and technology,
celebrations, it is working hand-in-hand with the
entertainment or the rural landscape comprising
government, institutions of importance and
agriculture and rural infrastructure, ASSOCHAM
national and international think tanks to contribute
has well-established National Councils in each of
to the policy making process, as it shares vital
the segments, chaired by well-known industry
feedback on the implementation of decisions of
leaders, academicians, economists and
far-reaching consequences.
independent professionals. These councils
deliberate extensively and share their inputs ASSOCHAM is truly an institution of eminence,
with the government. contributing to the task of nation building.

Santosh Mathew
Senior Director & Head - International Affairs
The Associated Chambers of Commerce and Industry of India
5, Sardar Patel Marg, Chanakyapuri, New Delhi - 110021, India
Phone: (+91) 11-4655 0585
Email: santosh.mathew@assocham.com
Website: www.assocham.org

40
About NEC
NEC is a leader in the integration of IT and network technologies and brings more than 100 years of exper-
tise in technological innovation to provide solutions for empowering people,
businesses and society.

Headquartered in Japan, NEC started operations in India in the 1950s, accelerating its growth through the
expansion of business to global markets. NEC in India expanded its business from telecommunications to
public safety, logistics, transportation, retail, finance, unified
communication and IT platforms, serving across governments, businesses as well as individuals. With its
Centre of Excellence for analytics platform solutions, big data, biometrics, mobile and retail, NEC in India
offers innovative new services and solutions for India and global markets. NEC operates across India with
offices in New Delhi (head office), Noida, Mumbai, Chennai, and Bengaluru.

For further information please visit: in.nec.com

41
 Analyst Profile

Ayushi
An Economics Graduate from Delhi University and Post Graduate in
Marketing & Telecom, she has completed executive program in
Strategy Consulting from IIM Bengaluru. Ayushi is a business
enthusiast and consultant by profession, responsible for growth and
innovation agenda, go-to-market strategy, profitability road-map and
competitive positioning of clients across sectors.

Varun Khosla
Varun holds a management & an engineering degree with over 4 years
of experience in business consulting and market research. At NECTI,
he is responsible for corporate and ICT product strategy advisory.
His past experience has been in technology, consumer products and
government sectors. Varun believes that most of society’s headwinds
can be suppressed through technology.

Swati Chawla
Swati has completed her Post Graduate Management Studies from
Fanshawe College, Canada. She is a strategy consultant at NECTI and
has participated in various strategy and market intelligence projects in
Healthcare, BFSI and Smart Transportation sector. Before this, she
holds the experience of working in operations for a Digital Advertising
Start-up.”

Mudit Gupta
Mudit holds a Bachelor of Technology degree in Mechanical
engineering from Hindustan Institute of Technology and Sciences,
Chennai. He has deep experience in handling projects in various
domains like Transportation & Logistics, Manufacturing, and
Information Technology and is a part of Strategic Services Team in
NEC Technologies India.

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