National Council of Applied Economic Research
Opinion: Bornali Bhandari
With better transport and communication facilities this region has the potential to grow trade with bordering nations.
The ‘Look East’ policy of 1991 gave way to the ‘Act East’ policy” of 2015. The objective of the latter is to promote economic cooperation cultural ties and strategic relationship with countries in the Asia-Pacikc region. This would involve providing enhanced connectivity to India’s North Eastern Region (NER) with our bordering countries.
In contrast to global experiences the border districts in South Asia tend to lag behind others especially in the East. There is a vast amount of literature to show that transport and connectivity are among the major challenges to improving trade ties in the East especially the chicken neck area in the Siliguri corridor. This corridor falls in the North Bengal region of West Bengal.
Several of the districts in the region which border Bangladesh Bhutan and Nepal had been classiked as “backward” by the erstwhile Planning Commission.
The focus here is on the potential of the services sector in North Bengal and NER. While it is challenging to think of the services sector in a pandemic the idea is to be future ready.
The key services sectors that hold potential are:
Producer services: Each of the border districts must develop a perspective plan identifying their comparative advantages and sync them with schemes like District Export Hubs and One District One Product. Scaling up of key sectors will require signikcant enhancement of what economic literature calls ‘producer service’ sectors which include management services research and development knancial and accounting services and marketing.
A related recommendation is that all States should produce district level statistics using the latest 2011-12 base year so as to facilitate economic analysis.Financial services: Barring Sikkim the NER lags behind in terms of knancial inclusion (NCAER DBT Research). The sector can spur regional growth and it has both e÷ciency and equity implications. The innovations from the kntech sector can be another line of export.
ICT connectivity: The nature of this sector is similar to knancial services. Poor connectivity plagues the NER which is largely due to its geographical terrain (NCAER DBT Research). If India can tap into Bangladesh’s submarine cable networks then a combination of optical kbre satellite and microwave technologies could be used to provide digital connectivity in NER. Cooperation trade and innovations in this area will also help our neighbours.
Tea and Bamboo: Eighty-one per cent of Indian tea is produced in Assam and West Bengal. The most signikcant product of the North Bengal economy is tea. NCAER research on border tea trade in North Bengal shows that Nepal and Bangladesh also provide competition to Indian tea producers. However India’s tea infrastructure and regulations are far superior to those of its neighbours.
Online Indian tea auctions provide transparent prices. If Nepalese and Bangladeshi tea are sold in India via Indian tea auctions the “tea services” industry can be further enhanced.
The branding of tea products from each country will benekt India. Similarly the Tripura Bamboo Mission is one-of-a-kind model which can be applied to the eastern region.
Tourism: Improved connectivity will boost tourism in this region. The natural beauty combined with its religious and historical sites can spur tourism.
NCAER research has found that Nepali citizens living in border regions come to Siliguri for shopping. Day trips for shopping/picnicking from neighbouring countries could be encouraged and monetised. Both short and long trips can generate foreign revenue. The border haats between India and Bangladesh must be enhanced.
Education: The NCAER has found that the share of educational services in Darjeeling district West Bengal is relatively large. It houses good quality boarding schools which can attract international students from bordering districts with spillovers in tourism.
Similarly other districts could identify their respective comparative advantage. Higher education especially through research institutes and edtech companies could be another potential area of service exports. Same languages being spoken in districts across neighbouring international borders may be an enabling factor.
The current infrastructural investment will boost demand for logistics services. India is developing several airports in the region. Bagdogra airport Darjeeling is the only international airport in North Bengal and it is close to many districts in Bangladesh and Nepal. There are plans to expand this airport and it could potentially cater to passengers from neighbouring countries.
Both North Bengal and NER o½er tremendous potential in terms of growth of the services sector. The unique nature of each of the border districts in the region needs to be identiked developed and scaled for sustainable growth and development of these areas.
The writer is a Senior Fellow at NCAER. Views are personal