Mentor’s Comment

India’s trade story is dominated by coastal powerhouses, while the Northeast, despite its 5,400 km of international borders and strategic location, contributes a meagre 0.13% of exports. The recent 25% U.S. tariff on Indian goods has exposed not just external vulnerabilities but also deep structural and spatial imbalances in India’s trade economy. This article dissects the marginalisation of the Northeast in India’s export architecture, the missed opportunities in border trade, and the urgent need to diversify resilience across regions.

Introduction

When the United States imposed an additional 25% tariff on imports from India in August 2025, New Delhi responded with restraint, continuing its familiar strategy of quiet diplomacy. But beneath this diplomatic choreography lies a deeper crisis: India’s export economy is dangerously centralised. While four States, Gujarat, Maharashtra, Tamil Nadu, and Karnataka, account for more than 70% of exports, the entire Northeast contributes only 0.13%, despite sharing long borders with multiple countries and lying at the crossroads of South and Southeast Asia. This exclusion is not incidental but structural, reflecting decades of neglect in infrastructure, policy, and representation.

Why is this in the news?

The U.S. tariff hike of 25% against India is significant not just for its external trade implications but for the internal fault lines it exposes. For the first time, the spotlight has shifted from India-U.S. friction to India’s own spatial imbalance in trade. Striking numbers illustrate the scale of the problem: Gujarat alone contributes 33% of exports, while eight northeastern States together contribute only 0.13%. This stark contrast shows that India negotiates global trade deals while leaving its eastern frontier out of the economic map. It highlights a major failure in policy design, where infrastructure and incentives remain clustered in a few industrial enclaves, leaving large swathes of the country economically orphaned.

Why is India’s export economy so centralised?

1. Export concentration: Gujarat, Maharashtra, Tamil Nadu, and Karnataka together account for over 70% of exports, with Gujarat alone contributing 33%.
2. Policy alignment: Infrastructure, political continuity, and incentives have been systematically channelled to these States.
3. Peripheral neglect: Uttar Pradesh, Bihar, and Madhya Pradesh together contribute barely 5%, showing how populous regions remain trade lightweights.

Why does the Northeast remain marginalised in trade?

1. Minuscule share: Eight northeastern States, despite 5,400 km of international borders, contribute only 0.13% of exports.
2. Security apparatus over trade: Borders are securitised for counterinsurgency, not for commerce. Goods do not move, but surveillance forces do.
3. Policy exclusion: No representation from the Northeast in the PM’s Economic Advisory Council or the Board of Trade.
4. Ignored in planning: The DGFT’s 2024 export strategy ran into 87 pages without a single mention of Northeast corridors.

What are the ground-level impacts of neglect?

1. Tea economy in crisis: Assam produces over half of India’s tea output, but branding and packaging are almost absent. A 25% tariff hike threatens viability, with planters in Dibrugarh warning of job losses.
2. Oil vulnerability: Numaligarh Refinery’s expansion requires imports, increasingly relying on discounted Russian crude. U.S. sanctions risk choking supplies, with Golaghat bearing the brunt, not Mumbai.

How has border trade with Myanmar collapsed?

1. Vanishing corridors: Zokhawthar (Mizoram) and Moreh (Manipur) have withered into skeletal outposts.
2. Free Movement Regime scrapped (2024): Severed kinship ties, daily trade, and hill economies.
3. Performative infrastructure: Roads and customs offices exist on paper, cold-chain facilities are missing.
4. Security logic over market demand: Borders function more as containment grids than trade hubs.

How does global context deepen India’s challenge?

1. China’s influence: Consolidating control in northern Myanmar through infrastructure investments and militia alliances.
2. India’s inertia: The India-Myanmar-Thailand Highway remains unfinished, symbolic of missed opportunities.
3. Global supply chains shifting: Southeast Asia builds new corridors, but India clings to colonial-era coastal routes.

What does this reveal about India’s trade resilience?

1. Dependence on few corridors: A flood in Gujarat or strike in Tamil Nadu can paralyse exports.
2. Northeast excluded by design: Not just oversight, but structural neglect in infrastructure, logistics, and institutions.
3. Strategic hollowness: India claims Indo-Pacific leadership but leaves its eastern flank brittle and disconnected.

Conclusion

India cannot aspire to regional leadership while its Northeast remains economically orphaned. The 25% U.S. tariffs are not just a foreign policy irritant but a reminder that trade resilience must mean dispersion, not dependence. The Northeast needs roads, warehouses, and representation, not rhetoric. Integrating this frontier into the export map is essential for both economic equity and strategic credibility. Without it, India risks negotiating global trade while ignoring the geographies that could anchor its cohesion.

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