World Bank in its report titled ‘A Glass Half Full: The Promise of Regional Trade in South Asia’ of 2018 remarked that the region despite being geographically most connected remains economically least integrated, with less than 5 per cent of total trade[1]. Countries in South Asia incur higher cost while trading with neighbours as compared to places in Europe or North America. Trade in the region is constrained by poor condition of infrastructure, congestion, high costs, lengthy delays, different identities, conflict and unsettled border disputes[2]. Lack of connectivity is a major reason behind the low inter-regional trade. Chinese Belt and Road Initiative (BRI) seems to have taken the lead in improving connectivity in the region. By challenging its sovereignty, BRI is threatening India’s strategic importance in South Asia. In a bid to counter the Chinese influence, it is pertinent for India to strengthen its role in the region by spearheading the connectivity plan for South Asia.
States of Northeast India are active stakeholders in building connectivity in the region. The region comprising eight states is home to 3.8% of national population, covers 8% of India’s total geographical area and shares over 5,300 km of international border[3]. However, the region is connected to rest of India by only a 22 km narrow stretch called the Siliguri Corridor and remains devoid of development. However, the region considered to be remote and landlocked shares almost 80 per cent of its border with other countries including China, Nepal, Bhutan, Bangladesh and Myanmar[4]. This geographical proximity of Northeast India with major neighbouring countries can be leveraged not only to improve connectivity in South Asia but also to foster development and reduce isolation of the Northeastern States. Moreover, these States have strategic advantages to foster economic integration with the South Asian neighbours. These advantages include politico-historical linkages, geographical proximity, socio-cultural cohesiveness, economic complementarities and scope for further economic integration with ASEAN and China[5].
Considering the strategic geographic location of Northeastern States, focus must be laid on the inter-regional movement of people. This requires inter-country bus, air and rail services from Northeast India to neighbouring countries and vice-versa[6]. This can be achieved by restoring the pre-independence routes connecting the northeastern states to mainland India through Bangladesh. To this end, mutually beneficial transit facilities can be opened between the two countries. A two-way transit corridor through Bangladesh for the movement of goods and people between the Northeastern region and the rest of India can address the connectivity and development issues. At the same time, Bangladesh must be allowed transit facilities for export and import from Nepal and Bhutan through convenient routes across the Indian territory. Concept of ‘Border Haats’ (markets) as successfully set up along the India-Bangladesh border should also be replicated along the border with other neighbouring countries especially Nepal, Myanmar and Bhutan.
A lot of connectivity projects have been initiated under BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and BBIN (Bangladesh, Bhutan, India, Nepal). The Motor Vehicles Agreement (MVA) signed in 2015 by BBIN countries will facilitate unhindered movement of passengers and goods through the land borders. Implementation of this agreement will improve connectivity that will reduce the transportation cost, travel duration and will develop regional trade.
Maritime connectivity is also taking shape in the region making transport of raw materials and other products easier. A case in point is opening of river Brahmaputra by India as a maritime route between Bangladesh and Bhutan with Assam being a transit. Nepal is currently utilising Kolkata port for its maritime trade and Bhutan can use the Pandu river port in Assam to further connect to the Chittagong port in Bangladesh. India has initiated many waterway projects along its riverine international borders that will help in overcoming road congestions and environmental pollution[7].
Another effort by the Indian government to improve connectivity is establishing railway links but this is being challenged by the uneven terrain. Despite this, the Indian Railways envisions to connect all state capitals of Northeast India by March 2020. In 2015, 120 km broad Lumding-Silchar gauge line connecting Barak Valley in South Assam with Tripura, Manipur and Mizoram was commissioned for goods movement. Also, a 15 km line between Agartala and Akhaura in Bangladesh connecting West Bengal with Tripura will provide cross border linkages with Tripura and the entire Badarpur-Lumding-Guwahati-Siliguri route[8].
Additionally, India can pursue its energy diplomacy which is an integral part of the Act East Policy. This can improve India’s access and connectivity to its immediate neighbours especially Nepal, Bhutan and Bangladesh. India holds a strategic position geographically and economically to support its neighbours in their energy demands. The main opportunities for cross-border energy trading lie in hydropower and gas pipelines and pooling and interconnection of electric power grids[9]. Transboundary infrastructure including transportation linkages and energy pipelines across the region will contribute to the regional integration by reducing transportation costs and facilitating intraregional trade[10]. Northeast region of India consists around 23 per cent of country’s crude oil and its potential in hydropower electricity generation remains unexploited.
South Asia’s first transnational petroleum products pipeline became operational on 10 September 2019. The Motihari-Amlekhganj petroleum pipeline is a 69 km long cross-country pipeline and has a 2 million metric ton per annum capacity. It will transport fuel from Barauni refinery in Bihar’s Begusarai district to Amlekhganj in southeastern Nepal[11]. Being a landlocked country, Nepal’s largest supplier of petroleum products is India, hence this pipeline aims to provide cleaner petroleum products to Nepal at affordable cost. Opening of this pipeline will reduce the over-reliance on road-based transportation thus ensuring that fuel supply between India and Nepal will no longer be affected by frequent road blockades and can overcome the threats of congestion of roads, spillage and adulteration. With respect to infrastructure development projects funded by India, a major criticism faced is that these projects undergo inordinate delays before completion. However, with renewed efforts being made by the Indian government as part of its ‘Neighbourhood First’ Policy, it is expected that all pending infrastructure projects will be expedited.
Two region-wide grids including ASEAN Power Grid and the Trans-ASEAN Gas Pipeline are being developed by ASEAN. Northeast India can connect these two grids via transmission lines and gas pipeline connections through Myanmar. India’s electricity grid which is already connected to Bangladesh can further be linked to Myanmar[12]. Such interconnectivity will allow accessing energy products from not only Bangladesh and Myanmar but also ASEAN countries like Indonesia and Malaysia. The Asian Development Bank in 2017 suggested that a single interconnected power market will improve integration of the region. “Under this arrangement, smaller countries like Nepal and Sri Lanka would rely on market to provide reserve generation capacity, lowering their own investment costs, while fossil fuel-based generation in Bangladesh and India would be replaced with cleaner hydropower from Bhutan and Nepal[13].”
Cooperation with Nepal and Bhutan in the field of hydro-power electricity generation can be clearly observed in the recent years. The Power Trade Agreement of 2014 between India and Nepal involves developing transmission interconnection, grid connectivity, power exchange and trading through governmental, public and private enterprises[14]. Three hydroelectric plants in Bhutan (Chukha, Kurichhu and Tala) have been constructed by India keeping in mind mutual benefits[15]. A joint venture- 600MW Kholongchu Hydroelectric Project to cement economic partnership and provide clean and low-cost electricity to India has been started.
India must advance on the path of expanding regional trade and connectivity in order to gain improved access to markets of South Asia, substitute fossil fuels by cleaner hydropower from Nepal and Bhutan and also to reduce the remoteness of Northeast India[16]. Northeast India is the bridge that connects India to its strategic immediate neighbours in South Asia. Hence, greater attention is sought to address the predicaments of the region’s isolation and landlockedness. For a long time, the infrastructural development in these states was determined by the security and defence requirements. It is important to realise that both security needs and development are interdependent and demands a comprehensive policy that views both as complementary to each other. Therefore, by keeping Northeast India at the forefront, focus must be laid on building inter-dependencies in the region such that all stakeholders benefit from the development resulting from greater inter-regional connectivity.
References
[1] Kirtika Suneja, “India-South Asia trade has potential to triple to $62 billion, says World Bank,” The Economic Times, 24 September 2018. Accessed on 27 September 2019. https://economictimes.indiatimes.com/news/economy/foreign-trade/india-south-asia-trade-has-potential-to-triple-to-62-billion-says-world-bank/articleshow/65935340.cms?from=mdr
[2] Prabir De, Connectivity, “Trade Facilitation and Regional Cooperation in South Asia” Research and Information System for Developing Countries (RIS), April 2013. Accessed on 27 September 2019. http://ris.org.in/images/RIS_images/pdf/South%20Asia%20meeting%202-3%20may%2020013%20PPT/Prabir%20De.pdf
[3] Anil Wadhwa, “The North East is key for India’s ties with ASEAN”, LiveMint, 9 March 2018. Accessed on 25 September 2019 https://www.livemint.com/Opinion/o4QSDxyenyvZ0QGwX5mwdL/The-North-East-is-key-for-Indias-ties-with-Asean.html
[4] Joyeeta Bhattacharjee, “Act East through Northeast: Success depends on implementing CMs’ suggestions,” ORF, 25 May 2018, Accessed on 25 September 2018. https://www.orfonline.org/expert-speak/act-east-through-north-east-success-depends-implementing-suggestions/
[5]Venkatachalam Anbumozhi, Ichiro Kutani and Mahendra P. Lama, Energising Connectivity between Northeast India and its Neighbours, (Indonesia: ERIA, 2019), Accessed on 26 September 2019. http://www.eria.org/uploads/media/ERIA_Book_Energising_Connectivity_Northeast_India(NER)_2019.pdf
[6] Dr Prabir De, “How government can help Northeast India recapture its past glory”, The Economic Times, 18 October 2017. Accessed on 29 September 2019 https://economictimes.indiatimes.com/blogs/et-commentary/how-government-can-help-northeast-india-recaputure-its-past-glory/
[7] Susan Mathew, “Closer economic ties with neighbours vital”, The Hindu Business Line, 7 May 2019. Accessed on 25 September 2019 https://www.thehindubusinessline.com/opinion/closer-economic-ties-with-neighbours-vital/article27060646.ece#
[8] Sreeradha Datta, “India-the bridge linking South and Southeast Asia”, ORF, 10 February 2017. Accessed on 25 September 2019 https://www.orfonline.org/research/india-the-bridge-linking-south-and-southeast-asia/
[9] Ibid.
[10] Prabir De, Connectivity, “Trade Facilitation and Regional Cooperation in South Asia” Research and Information System for Developing Countries (RIS), April 2013, pp. 4, Accessed on 27 September 2019. http://ris.org.in/images/RIS_images/pdf/South%20Asia%20meeting%202-3%20may%2020013%20PPT/Prabir%20De.pdf
[11] Explained Desk, “Explained: The India-Nepal petroleum pipeline inaugurated today,” The Indian Express, 10 September 2019. Accessed on 25 September 2019. https://indianexpress.com/article/explained/explained-the-india-nepal-pipeline-that-is-set-for-inauguration-5980625/
[12] Prabir De, Connectivity, “Trade Facilitation and Regional Cooperation in South Asia” Research and Information System for Developing Countries (RIS), April 2013, pp. 8, Accessed on 27 September 2019. http://www.eria.org/uploads/media/ERIA_Book_Energising_Connectivity_Northeast_India(NER)_2019.pdf
[13] PTI, “Interconnected power market a clear win for South Asia: ADB”, 10 December 2017, Accessed on 29 September 2019. https://economictimes.indiatimes.com/industry/energy/power/interconnected-power-market-a-clear-win-for-south-asia-adb/articleshow/62013405.cms?from=mdr
[14] Kalpana Jha, “India-Nepal Power Trade Agreement: Challenges before Opportunities”, IPSC, 24 March 2015. Accessed on 30 September 2019. http://www.ipcs.org/comm_select.php?articleNo=4854
[15] Susan Mathew, “Closer economic ties with neighbours vital”, The Hindu Business Line, 7 May 2019. Accessed on 25 September 2019 https://www.thehindubusinessline.com/opinion/closer-economic-ties-with-neighbours-vital/article27060646.ece#
[16] Sanjay Kathuria, “A Glass Half Full: The Promise of Regional Trade in South Asia,” World Bank Group, 19 September 2018. Accessed on 25 September 2019 https://openknowledge.worldbank.org/bitstream/handle/10986/30246/9781464812941.pdf?sequence=8&isAllowed=y
