With a distinct advantage of being strategically located with access to the traditional domestic market, adjacent countries and also being a vantage entry point for the South-East Asian markets, this region is now the hot zone for infrastructure, connectivity and cargo movement
It wouldn’t be despicable to agree upon the fact that development and prosperity of a region depends on its connectivity to the outer world and within its own territory. One such region which was badly in need of an infrastructure makeover was the north eastern states of India often referred as seven sister states which pose herculean logistics challenges to move cargo even from the rest of India. But at the same time these states (Assam, Manipur, Meghalaya, Nagaland, Mizoram, Tripura and Arunachal Pradesh) also hold the key to open up greater trade opportunities with neighboring countries and with ASEAN.
Topography of the North East:
The only connecting point for north eastern states to the rest of the country is a narrow strip of circuitous landmass called as the Siliguri Corridor or the Chicken’s Neck through which the surface transport takes place. Through this route of about 200-odd kms cargo movement takes place from the north eastern states to major trade hubs like Darjeeling and Jalpaiguri districts in West Bengal and to rest of India. It is the reason why Siliguri apart from Guwahati, is a hub for truckers, and plays an important role in surface transportation in the hinterland. No other region of India shares their borders with the number of countries as the seven states do, for example Meghalaya has 443 km stretch of border with Bangladesh, Assam has 263 km border with Bangladesh, and 267 km with Bhutan, Arunachal Pradesh has 217 km border along Bhutan, 1080 km with China, and 520 km with Myanmar. Similarly Nagaland has 215 km border along Myanmar, Manipur has 398 km border along Myanmar, Mizoram has 318 km border along Bangladesh and 510 km along Myanmar, and Tripura has 856 km international border along Bangladesh. Hence, these states with improved connectivity hold the key to greater market access to the neighborhood and far east.
MEGHALAYA
Exports from the state stands roughly at $87 million. Major exports from the state are coal, limestone, boulder stone, agricultural produce and raw hides, among others. The state is connected through five national highways. The state has an Export Promotion Industrial Park at Byrnihat in Ri-Bhoi district, however it caters mainly to domestic market due to demand from local market. Meanwhile, out of 10 LCSes in the state only 8 are functional. An Integrated Check Post is planned at Dawki. One of the major hurdles for export growth is lack of port and the nearest port is Kolkata. Border Haats have been developed based on MoU between India and Bangladesh, and currently the state has a border haat at Kalaichar in West Garo Hills district and the other one is at Balat in East Khasi Hills district. Four new border haats have been approved at Bholaganj, Ryngku, Sibari and Nolikata. IWAI in March 2018 had commissioned a RO-RO terminal in Assam’s Dhubri district and 250 DWT Ro-Ro vessel MV Gopinath Bordoloi was pressed into service to sail between Dhubri river port and Hatsingimari, a river terminal along the Assam-Meghalaya border having a total waterway length of 29km. The new service aides to steer clear of the circuitous route of 220km to reach Meghalaya on the opposite side. Dhubri is one of the business hubs of Assam which is connected to Meghalaya through a road bridge over Brahmaputra river at Jogighopa. In December 2017, the Prime Minister had inaugurated 271-km two-lane NH connecting Tura in western Meghalaya to Shillong, and announced `90,000 cr for improving roads and highways.
ASSAM
Assam is the major trade transit point to the north east and also largest economy in the region. Assam is third-largest producer of POL and natural gas in India. It is also a major exporter of tea. Other major industries are coal, cement, limestone, and food processing. The state has approved 5 Border Trade Centers at Sutarkandi, Mankachar and Golokganj in Dhubri district, Darranga in Baksa district and Jagun in Tinsukia district to facilitate border trade. CONCOR ICD Amingaon is the only ICDs in the region. There are about 47 industrial units in Amingaon Export Promotion Industrial Park. Assam has active riverways with navigation in Brahmaputra and Barak rivers. ICD Amingaon has 2 bonded warehouses of CONCOR and a private one. The state government has earmarked $6.64 million to develop a logistic hub. The World Bank is assisting Assam to modernize water transport, ferry Infra, last mile connectivity, fleet modernization, and institutional capacity development. The state offers investment scope in development of river port/terminals, port townships, operation of river taxis, etc. The state has most developed road and rail network in the region. In the recently organized investors summit at Guwahati, Kenichi Yokoyama, Country Director, India Resident Mission, ADB had stressed that Assam could be a potential hub for trade with ASEAN due to its strategic location with multi-modal transport, and if it could develop infrastructure like Chinese trade hubs Yunnan and the Greater Mekong sub-region. The state has some ambitious plans to develop state capital region along with development of logistics infrastructure, river transport and port township. The existing river terminal at Jogighopa is going to be upgraded to a bulk cargo handling facility, and will also have MMLP. It will increase container movement. The MMLP looks to tap a potential cargo to the tune of about 12mmt and currently it is growing at CAGR of 6 per cent, which is expected to touch 34mmt in the future. The MMLP also aims to tap an estimated container volume of about 5,000 teus in the region.
MANIPUR
The state shares border with Myanmar. Major sectors are handloom & handicraft, food processing, minerals, bamboo processing, among others. At present, nearest ICD is Amingaon, and it may be extended at Moreh-Imphal and Imphal-Guwahati to ease EXIM goods movement. Restoration of Indo-Myanmar Border Trade via Moreh and the Ganga Treaty with Bangladesh herald a new chapter for international trade through Manipur. Moreh, a border town in Manipur is the official export point and a Land Custom Station facilitates export documents. Exchange of about 40 tradable items under Barter Trade mechanism takes place through Moreh. Major exportable items include cement, engineering goods, transport equipment, motor cycles, iron & steels, medicine, chemicals and allied products, cotton yarn, etc. Import goods from Myanmar through barter are betel nuts, turmeric, red kidney beans, kuth roots, gram, resin, dry ginger, etc. The volume of trade at Moreh-Tamu Border Point is growing at double digit. Union finance ministry has cleared operation of normal trade through Moreh. There is a Land Custom Station at New Checkon in Imphal East district which acts as the central processing office for export clearance. Moreh has a 400mt warehouse for EXIM goods. An export oriented SEZ is under development in Thoubal. A cold storage chain is being developed at Nilakuthi Food Park. A major initiative to promote exports is development of Integrated Check Post at Moreh where all necessary EXIM infrastructure is planned to be installed. A cargo terminal is under construstion at the Imphal airport.
ARUNACHAL PRADESH
Arunachal Pradesh is the largest state in the north east. The state’s international borders are with China, Myanmar and Bhutan. It has 5 river valleys, offering immense hydropower potential estimated at 60,000mw or roughly 22 per cent of India’s current power generation capacity. Till 2016, installed hydropower capacity in the state was 97.57 mw. With a vision to produce 30,000mw, the state is poised to be one of the largest hydro power producers in India. There are about 34 hydropower projects at various stages of implementation, and the construction work will continue till 2030. There are requirement of about 24 million tons of cement, and 2 million tons of steel. There is also need to move ODC cargo to the region. The state has good production of horticulture crops of about 481.76 thousand mt, with total production of fruits and vegetables of around 9,964.03 thousand mt and 5,124.26 thousand mt, respectively.
NAGALAND
The state is surrounded by Myanmar on the east, Arunachal Pradesh on the north, Assam on the west, and Manipur on the south. Nagaland has rich reserve of natural resources like minerals and petroleum, and there is considerable scope for hydropower industry. The state has reserve of around 600 mmt of crude oil, and about 20mt of hydrocarbon reserves. Additionally, Nagaland also has more than 1,000mt of high chemical grade limestone and 315 mt coal reserve. Nagaland Industrial Development Corporation promoted Export Promotion Industrial Park has plans to develop SEZ spread across 400 hectares in Dimapur. Key industries in the state are agriculture and allied industries, horticulture, mineral & mining, among others.
TRIPURA
Tripura’s trade with Bangladesh is about `230 cr per annum, and largely organized trade is through Akhaura. Tripura has 6 Land Custom Stations, and Agartala is major Customs station. ONGC Tripura Power and other projects in Palatana require movement of project cargo. Future projects are Urea fertiliser plant and a petro-chemical hub. As per treaty, Bangladesh allows north eastern states access to Chittagong port. Tripura with access to Ashugunj port can connect to Kolkata to reduce distance from north east. Some projects underway are fourlane NH and rail from Agartala to Sabroom, bordering Bangladesh. Sabroom and Bangladesh is separated by Feni river, and India has approved construction of a bridge over the river. It will connect the region to Chittagong. But there is a need for Land Customs Station in Sabroom with facilities like warehouses, container transshipment and other freight forwarding services to encourage trade.
MIZORAM
Mizoram shares its international border with Bangladesh and Myanmar. Three national highways pass through the state. An Integrated Check Posts (ICPs) at Tlabung-Thekamukh sector has been planned to facilitate trade with Bangladesh. Another ICP is located at Kawrpuichhuah along with a multi-storied Trade Facilitation Centre at Tlabung. The Tlabung–Thekamukh (Bangladesh) route connects southern parts of Mizoram to Chittagong Port. There is a potential for growth of exports from the state in agriculture, horticulture and floriculture products, besides other produce like Bamboo and teak. There is also good demand of quarry stones and stone chips from Mizoram in Bangladesh. Zorinpui is the land custom station along the Myanmar border in Mizoram for the Kaladan multimodal project, and the nearest port for Zorinpui is 287 km away at Sittwe Port. As part of the East Policy, the Kalädan Multi-Modal Transit Transport Project, Zorinpui will be India’s gateway to South East Asia. A land custom station at Zokhawthar in Mizoram was inaugurated in March 2015 which is expected to boost trade between India and Myanmar. Bairabi railway station in Mizoram, bordering Assam provides goods movement, and construction of 51-km broadgauge line between Bairabi and Sairang, near the state capital is under construction. A survey on the proposed 272 km railroad from Sairang to Bangladesh border trade centre at Kawrpuichhuah has also been completed. There are plans to connect Kawrpuichhuah to Lawngtlai railroad, which would reach Kaladan, that would contribute in promoting trade in the state. In December, the Prime Minister had inaugurated a 60-MW Tuirial hydropower project in the state and had announced additional `10,000 crore for power sector to set up a state-of-the-art transmission system for the northeast. The development of the Rih-Tiddim road and the establishment of numerous rural ‘haat’ (markets) along the Mizoram-Myanmar border would increase trade volume in the region. The Union government has allocated `180 crore for expansion of Shillong airport to accommodate bigger aircrafts like Boeing 737 and Airbus 320.
Transit mode, cargo mapping and future growth:
While the hilly terrain poses a challenge to the land movement of goods, at the same time abundant river resources, particularly the mighty Brahmaputra offer alternate modes of cargo movement through river. National Waterway No. 2 (NW2) is located in this region. NW2 navigates through the Brahmaputra River over a river channel length of about 891 km upto the Bangladesh border and it has two floating terminals, Dhubri and Sadiya in Assam. This water channel is an all weather route and acts as an alternate to West Bengal – Sikkim narrow land corridor and shortens distance from Tripura, Mizoram, South Assam to Bangladesh for freight movement. IWAI maintains navigational channel of about 45 meters minimum width, and 2.5 meters draft in NW2 between Dhubri and Neamati. The existing river terminal at Jogighopa is planned to be upgraded to a bulk cargo handling facility, primarily to handle products like Meghalaya coal with rail connectivity to the terminal. One of the major trade facilitators for the north eastern states were the river routes which connect the region to Kolkata. The largest expected cargo movements in the hinterland will be fueled by a number of power projects being implemented by various private sector companies along with the National HPC, NEEPC, and NTPC on various tributaries of the Brahmaputra particularly in Arunachal Pradesh. These developments are expected to generate cargo movements of about 2.5 -5.0 million metric tons per year. Apart from which other identified cargo movements include coal from Meghalaya, fly ash from Farakka to various destinations in the north east, limestone for cement plants, petroleum products from Numaligarh refinery, bitumen from Haldia, and food grains from Kolkata to various depots of the FCI in the region. A multi modal transport hub is under development on the outskirts of Guwahati at a location called Pandu, which is a river port with road and rail linkage. Dhubri, Jogighopa, Biswanthghat and Dibrugarh river terminals on NW2 have GPS-aided channel navigation chart, while the waterways has 12 other locations with floating jetties. Hence, this waterways is ready for commercial cargo movement to a great extension.
Currently, major cargo moved between the seven states and rest of India are tea, oil, cement and coal (on the export side), and food grains, fertilizers, and petroleum products (on the import side). Since India has a cordial relation with Bangladesh, a multi-modal cargo transport can benefit both the countries. IWAI has started to move 800mt of cement in January 2018 from Pandu (a river port near Guwahati) to Dhubri a small town-cum-river port and a transit station between India and Bangladesh, and looks to move 1200mt of the commodity per month on a regular basis on the route. Lack of facilities like storage, warehouse, and transportation affects movement of goods to the outer world. NTPC is another major industry which moves coal for its unit at Bongaigaon. Similarly, ONGC and Oil India move pipes and other cargo to the north east. FCI and department of food and public distribution have requirement of a significant volume of rice and food grains for public distribution in the region. North East is also growing as a major producer of organic farm products which requires streamlining of logistics to reach overseas markets.
Surface movement: Extreme weather conditions, with extended monsoon of 8-9 months is a challenge for cargo movement in the region. The road condition in the region can be gauzed from the fact that about 30 per cent of all roads in the region is paved road whereas national average is about 64 per cent. Though the seven states have good number of national highways passing through the region but majority are poorly maintained and narrow. Meanwhile, many parts of NH in the region is under upgradation. Another thrust area is the Asian Highway (AH) network that will improve connectivity with the neighboring countries. The AH1 connects north east to Bangladesh at Dawki on Indian side and Tamabil on Bangladesh side. AH2 connects to Bangladesh at Phulbari on Indian side and Banglabandha on Bangladesh side. Kaladan Multimodal Transport projects connects Mizoram to Kolkata/Haldia ports through NH54 and Kaladan river in Myanmar. Land Ports Authority of India (LPAI) was formed in 2012 to facilitate cross border trade. LPAI develops and manages Integrated Check Posts (ICPs) along the land borders. In the first phase, Agartala (Tripura), Moreh (Manipur), and Dawki (Meghalaya) have been identified for development of ICPs, and in the second phase Sutarkandi (Assam) and Kawrpuichhuah (Mizoram) have been identified. Indian Customs offers single entry permit system by following standard operating procedure by which vehicles from neighboring country can come up to Land Customs Station (LCS), however, seamless movement at some LCSes have not been possible as both countries need to have adequate hard and soft infrastructure. The Commissionerate of Customs (Preventive) Shillong has jurisdiction over the seven states. After initial hiccups, BBIN motor vehicles agreement has finally been put to use on the ground allowing seamless cross-border goods movement. In addition to the treaty, World Customs Organization mandated e-sealed containers need not require to stop or change vehicle or Customs inspection while crossing border. Trial runs for cargo vehicles under the BBIN agreement have already been conducted along the Kolkata-Dhaka-Agartala and Delhi-Kolkata-Dhaka routes.
Since north east shares land border with Bangladesh, Bhutan, China, Myanmar and Nepal, there have been agreements of overland trade with these countries through Land Custom Stations. India has Free Trade Agreement (SAFTA) with Bangladesh and Bhutan for border trade through LCSes. Though there are Border Trade Agreements with China and Myanmar, however, it is limited to exchange of commodities from a bi-laterally agreed list by people living along both sides of the international border. The major commodities traded between the north east, Myanmar and Bangladesh are electricity, consumer goods, construction material including steel and cement, construction equip- ment, fertilizer, agricultural commodities, spices, fruits, medicine, bamboo & bamboo products, wooden logs, oil & gas, mineral, grain, medicinal plants, textiles & garment, electronic goods, handicraft, among others. However, due to lack of infrastructure and streamlined trade facilities, a lot of trade between the north eastern states and neighboring countries takes place through informal and unofficial modes.
Speaking about cargo trend in the region,
Atul Kulkarni, Advisor International Projects, Indian Ports Association (IPA)said, “Inbound volumes in the north east are of fertilizers, rice and other food grains, FMCG, white goods, etc. Trade is growing consistently over last few years due to increased consumption. Online shopping and Ecommerce activity is also on the rise. The retail business is also booming. With the focus on converting Assam into manufacturing hub for more than 50mn population of the region, there will be increased logistics activity.”
Rail: A major rail project for the region is connecting Sittwe Port in Myanmar to Tirap in Arunachal Pradesh while passing through Mizoram, Manipur and Nagaland, and another will connect Dhubri to Silchar through Meghalaya.
Air: Guwahati is the busiest and the only airport in the north east region with international air connectivity, and annually handles about 11 million tonnes of cargo of which majority comes from Delhi and Mumbai airports. Ministry of Civil Aviation is developing Guwahati as the regional air cargo hub. The hub and spoke model with air cargo hubs in Guwahati, Imphal and Agartala will be key to the region.
Outlook
The Indian government’s move to ‘connect’ the region to the mainland is to some extent driven by its ‘Act East’ policy, but to some extent the urgency is also driven by the underlined current of political motivation and China’s steadily increasing activity in the region. Whatever the reason may be but the north east is fasting catching up the fancy of policy makers as well as investors. It is time for the logistics companies to cease the opportunity and start looking at the region not as a consumer market but as a gateway to the neighboring countries. With existence of rivers in abundance, the region offers perfect opportunity to implement a multi-modal mode of transport with the mix of road, rail and river based cargo movement. So far inland waterways have not achieved the desired success largely because the rivers in the plains are fast drying up and it requires lot of investment to dredge the bed to make them viable for even barge movement. Whereas with an extended monsoon which is a challenge for road construction and cargo movement by road turns out to be a boon for river based cargo movement. Road construction projects in the region are catching up pace, but it is also a fact that road projects are time consuming and in the meantime policy makers, logistics service providers and port operators should give a serious thought at putting coastal shipping to full use for cargo movement to the north east. It is high time the government should look at using ports, especially on the east coast of India which are geographically closer to the region, effectively to move cargo through ports in Bangladesh and Myanmar to reach out for the ease of cargo movement in the north east. It is also a fact that currently due to various reasons, including lack of cargo volume surety, policy obstacles and issues with coast shipping, logistics service providers have not effectively explored the opportunity of cargo movement from the east coast ports to the north east, however, this obstacle to some extent could be addressed by the government in terms of encouraging multi-country coastal and land based cargo movement by providing policy support. Furthermore, the government should also consider the option of viability funding for a limited period of time to give initial thrust and incentive to logistics service provider. Lack of cargo mapping in the north eastern states is another reason for which logistics services providers have not shown much interest for investment in the region. Additionally, freight forwarders have to strategize to make inroads into this market, for example the trucks that move in the plains might not be suitable for the narrow hilly terrain of north east. With right kind of infrastructure and policy in place, the north eastern states have the potential to be developed inline with Duisburg Inland Container Port, and can facilitate trade and commerce between India and its neighboring countries and the ASEAN.
Need for better border infrastructure
Mahbubul Anam, MD, Expo Group and President, Bangladesh Freight Forwarders Association speaks about the infrastructure and trade facilitation measures that can help EXIM growth between north eastern India and Bangladesh
Q What is the annual volume of EXIM cargo movement that takes place from the seven north eastern states?
Inward and outward movement of merchandise in north eastern states and rest of the states in India through rail and river for 12 months (in ‘000MT) is shown in the table below:
| CommodityGroup | North Eastern States | |
| Inward Outward | Inward Outward | |
| Rice | 2,914.25 | 156.47 |
| Wheat | 746.59 | 29.97 |
| Oil seeds | 0.83 | 0.00 |
| Raw cotton | 0.12 | 0.12 |
| Fruits and vegetables | 526.87 | 0.00 |
| Oil cakes | 14.16 | 147.38 |
| Sugar | 434.24 | 13.22 |
| Coal and coke | 32.45 | 6,717.15 |
| Lime and limestone | 175.82 | 141.84 |
| Mineral oils (excluding kerosene) | 281.67 | 3,176.44 |
| Cement | 1,438.77 | 129.80 |
| Fertiliser and organic manure | 310.69 | 210.63 |
| Total | 6,876.33 | 10,723.01 |
Q What are the major commodities that move between the north eastern states and Bangladesh?
Major import commodities from the north eastern states to Bangladesh are rice, coal, agarbati, bamboo, natural rubber, limestone, among others. Major exports from Bangladesh to the north east are RMG, cement, pharmaceuticals, ceramic tiles, hosiery, among others.
| BANGLADESH’S TRADE WITH THE NORTH EAST IN MILLION USD | ||
| YEAR | EXPORT | IMPORT |
| FY2012‐13 | 97.22 | 145.02 |
| FY2013‐14 | 104.96 | 152.86 |
| FY2014‐15 | 112.7 | 160.7 |
| FY2015‐16 | 120.44 | 168.54 |
| FY2016‐17 | 128.18 | 176.38 |
Q What are the major challenges for EXIM trade in the region in general and related to infrastructure in particular?
Ensuring seamless movement through regional connectivity and multimodal transport facility is key to resolving many of the NTB-related disputes. There is an urgent need to build the necessary border infrastructure to facilitate cross-border movement of goods between the two countries. Major infrastructure facilities include development of land port with modern warehouse facilities, development of the connecting road and bridges with India. Coordination among partner countries in terms of development of the infrastructure facilities is also critical to addressing these issues. Trade facilitation is not only important from the perspective of Bangladesh’s export; but it is also important in reducing the costs of import from India which has to be borne by Bangladesh’s importers. Even if import cost could be reduced by 10 per cent, importers will be able to make significant savings which will benefit the country’s producers, exporters and consumers, and enhance Bangladesh’s competitive strength.
Q What is the potential of trade growth between north eastern states and Bangladesh?
A number of initiatives could be taken to stimulate bilateral trade between the two countries. India should be persuaded to provide duty-free market access for all exports originating from Bangladesh and Bangladesh should put renewed emphasis on diversification of its export basket in the Indian market. Attracting investment from India that target the Indian market will be critical to realizing Bangladesh’s export opportunities in India. North Eastern region of India presents a unique opportunity for enhancing Bangladesh’s exports.
* Mentioned statistics are based on trend and estimation from various sources
