Why in News: In Aug 2025, the U.S. imposed 25% tariffs on Indian imports, exposing India’s export imbalance — NE States with 5,400 km borders contribute just 0.13% of exports.
Context
- In Aug 2025, US imposed 25% tariffs on Indian imports citing trade deficits and Russian crude.
- India’s export architecture is spatially lopsided: four States (Gujarat, Maharashtra, Tamil Nadu, Karnataka) contribute >70% of exports; Gujarat alone >33%.
- Conversely, the eight northeastern States with 5,400 km of international borders contribute just 0.13% of national exports.
Structural Issues
1. Policy Neglect – NE absent in DGFT’s 2024 export plan; no representation in PM’s Economic Advisory Council or Board of Trade.
2. Infrastructure Deficit – No functional trade corridors, weak logistics, skeletal customs offices, lack of warehouses/cold chains.
3. Security-Centric Approach – Borders treated as counterinsurgency zones; Free Movement Regime with Myanmar scrapped in 2024.
4. Tea Economy Distress – Assam produces >50% of India’s tea but remains CTC-grade, poorly branded; tariffs and falling demand threaten jobs.
5. Energy Risks – Numaligarh refinery increasingly dependent on Russian crude; sanctions could directly hit Assam’s economy.
Geopolitical Implications
- Myanmar Border Silence – Zokhawthar, Moreh reduced to securitised bottlenecks.
- China’s Expanding Footprint – Infrastructure and militia networks in northern Myanmar risk sidelining India’s Act East policy.
- Strategic Hollowing – The India-Myanmar-Thailand Highway remains incomplete, leaving NE disconnected from ASEAN corridors.
Way Forward
- Build resilient trade corridors through Siliguri and Myanmar gateways.
- Extend RoDTEP, PLI, and branding support to NE products (tea, horticulture, handicrafts).
- Prioritise roads, warehouses, cold chains over rhetoric.
- Institutional inclusion of NE in national export policymaking.
Conclusion
India cannot claim Indo-Pacific heft while its eastern flank remains economically brittle. Trade resilience demands spatial dispersion, not concentration.
UPSC Relevance
GS Paper 3 (Economy): External sector, trade policy, inclusive growth, infrastructure deficits, production-linked incentives.
Mains Practice Question
Q. “Despite sharing over 5,400 km of international borders, the eight northeastern States contribute only 0.13% to India’s exports. Analyse the structural causes and suggest measures to integrate the region into India’s export economy.” (Answer in 250 words)