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REDESIGNING THE SUPPLY CHAIN FOR NORTHEAST INDIA

Lt Gen Balbir Singh Sandhu, AVSM, VSM (Retd) Writes: 

North East Region (NER) of India is known for her natural beauty, energetic people, and abundance of natural resources. The region has a great history of trade with the Eastern neighbours of India for centuries, yet it is one of the most backward areas of the country today. It is interesting to note that NER of India, which accounts for eight percent of the geographical area, comprises of eight states and accounts for  four percent of India’s population, is connected with rest of the country through a narrow link called the ‘Siliguri Corridor’ or ‘Chicken Neck’ which is just about 23 kilometres wide. The region shares almost one third of India’s external borders measuring about 5600 kilometres. The map below shows the narrow link through the Chicken neck, which is the lifeline of the NER, surrounded by the neighbouring countries from all sides. It shares 1880 kms long border with Bangladesh,1643 Kms with Myanmar,1300 Kms LAC with(Tibet) China,516 with Bhutan and 98 Kms with Nepal, which offer immense opportunity for international trade provided the region has a well-developed manufacturing base and infrastructure.

Nepal, Bhutan, and Tibet (China) lie to the North, Bangladesh to the South and Myanmar to the East of Northeast India. Unfortunately, due to the partition of India in 1947, the region got separated from the Bay of Bengal due to division of the state of Bengal into Indian West Bengal and the then East Pakistan or the present-day Bangladesh. This resulted in making the region landlocked and cut off from major business centre and port city of Kolkata.

As per the strategic thinker Alfred Thayer Mahan, in a globalised world, the Oceans connect countries and not separate them; especially with respect to trade and economics which have been the foundation of international relations. Therefore, India’s NER being landlocked became a major disadvantage for the economy of the region. Historically, the Ahom kingdom of Assam was extensively trading through the land routes with present day Myanmar and Tibet for centuries. Along these routes the Tibetans came down to Pasighat in Arunachal Pradesh to exchange goods like rock salt, woven fabrics, and metal items. Sea trade from Eastern part of India with the countries of South East Asia is well known and commonality of culture is testimony to the same.

The takeover of Tibet by the Communist China stopped the trade between Northeast and Tibet in the 1950s. India should have evolved appropriate policies to remodel the trading arrangements post-independence in the light of the changed geopolitical situation. However, it may be easy to state this in hindsight but with 1962 Sino-Indian conflict and series of insurgencies happening simultaneously in the Northeast , Indian Government’s policies in the Northeast were driven by security factors and economy was the last thing that Indian leadership could think of in such circumstances.

Neglect of the region by the successive union governments led to lack of economic development and alienation of the people. The degree of neglect of the region has been so pronounced that It would not be surprising in case a high percentage of educated middle class Indians including the law makers fail to list out the eight North-eastern states. Such is the ignorance about the region. However, in 1991 at the end of Cold War India gave attention to her Eastern neighbours by launching the ‘Look East Policy,’ which was aimed at establishing closer relations with countries of East and South East Asia. Prime Minister Modi further reinforced it as ‘Act East Policy’ and announced that Northeast India would be the launch pad for India’s Act East Policy.

It needs to be understood that to achieve this goal of making Northeast as the launch pad for trade with South East Asia, India needs to do a lot more for its development, and a status quoist approach cannot achieve such an ambitious goal. There is need to transform NER in terms of connectivity and manufacturing to make it competitive. It needs to be appreciated that transporting goods manufactured in other parts of India to South East Asia through India’s NER will not be cost effective. To make business sense of such a goal, the manufacturing base must be located in the NER, which houses plenty of natural resources and has an abundance of skilled population.

Due to geographical constraints, as discussed above, all eight states of the Northeast are maintained from rest of India through a single rail/road link passing through the famous Siliguri corridor or the Chicken Neck. Except Sikkim which lies to the north of the Chicken Neck, the supply chain for all other states passes through Assam with off shoots emanating for other states which makes them vulnerable to any natural or manmade disruption on the way. One of the reasons for lack of development and industrialisation over the years may have been defensive mindset at the national level, besides the lack of infrastructure and prevalence of insurgencies. Hence, the citizens of the region are dependent on supplies from rest of India, even for certain basic needs. India today is a confident country which has come a long way from yester years of defensive and cautious mindset, and therefor needs to pay attention to transform the economy with bold initiatives.

A time has come for India to invest in Northeast to make it an engine of growth taking full advantage of its geographical location and connect with the neighbouring countries. India must supplement the existing supply chain via Siliguri by utilising the ports of Chittagong in Bangladesh besides having a transit agreement to use the rail and road route from Kolkata to Agartala. The distance between Kolkata and Agartala in Tripura via Bangladesh is about 575 kms against more than 1500 kms via Siliguri which is the current route of maintenance for the region.

The current supply chain through Siliguri makes logistics extremely expensive. It needs to be understood that Bangladesh was part of undivided India when the trade and connectivity in the Northeast was flourishing. After over seventy years of partition, the time has come to undo the disruption caused by it; by redesigning the supply chain of the Northeast, linking the two sovereign nations – Bangladesh and India, in a synergetic manner to create a Win-Win situation for both the economies.

Myanmar is the other country which can give India connectivity advantage over the existing supply chain via Siliguri. In order to make to make Northeast as the pillar of India’s ‘Act East Policy’ it is planned to develop connectivity between Manipur in India and Thailand through Myanmar. Construction of Trilateral highway has been one such project which has not yet taken off.  Similarly, the Sittwe port of Myanmar which is located on the mouth of Kaladan river and has been developed by India as part of Kaladan Multi Modal Project to connect land locked Northeast to Eastern India. This will make the supply chain to Manipur and Mizoram much shorter, leaner and economical.

It may be pertinent to note that during the visit of Chinese President Xi Jinping in Jan 2020,  the two countries signed 33 agreements including creation of China Myanmar Economic Corridor connecting South West parts of China to the Bay of Bengal where China is now developing a deep sea port at Kyaukpyu. With Gwadar in the West and Colombo & Hambantota in India’s South, China has a presence on all likely routes of trade of India.  India’s relations with Myanmar will be crucial for its economic relations with the countries of South East Asia but China will always be an elephant in the room.

Notwithstanding, China’s investments in Myanmar and her relations with Bangladesh, the only way forward for India is to enhance her economic and strategic engagement with Myanmar and Bangladesh. India must set up economic zones in partnership with Bangladesh and Myanmar located on both sides of the border which should cater for consumption in Myanmar, Bangladesh and India’s Northeast as also export to third countries from the ports located in these two countries. It needs to be noted that security cooperation with these two countries and Bhutan has helped stabilise the insurgency situation in North Eastern states to a great extent and further scope for cooperation is immense. Economic and security cooperation with Bangladesh and Myanmar will help develop an alternate supply chain for NER of India which will not only transform the economy of Northeast India but benefit people of both these countries to have much better quality of life. To achieve this economic and strategic synergy, India needs to lead the way.

 

Reference : 

http://www.nwccindia.com/2016/05/21/distribution-challenges-in-north-east/http://www.businessworld.in/article/Uncorking-The-Logistic-Competencies-Of-India-s-North-East/04-08-2018-156198/ https://www.unescap.org/sites/default/files/22.%20tfforum11_c3_hussain.pdfhttps://www.google.com/search?q=trade+route+between+india%27s+northeast+and+tibet&oq=trade+route+between+india%27s+northeast+and+tibet&aqs=chrome..69i57.34406j1j4&sourceid=chrome&ie=UTF-8https://www.asthabharati.org/Dia_July07/b.b.kum%20.htmhttp://oaji.net/articles/2016/1115-1480922019.pdf

 

Lt Gen Balbir Singh Sandhu, AVSM, VSM (Retd) has held a number of prestigious command and staff appointments primarily in the Counter Insurgency Operations in North Eastern states, over his 37 years of distinguished service.  A Supply Chain Management Specialist, he has extensive practical experience up to the apex level. He is currently pursuing his PhD on Security, Development and Peace in North East India from Punjab University Patiala.

Disclaimer: The views expressed are those of the author and do not necessarily represent the views of the organisation that he belongs to or of the USI of India.

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