The Summit, aimed at realising the ASEAN-India Free Trade Area (FTA), which has a combined market of almost $1.8 billion, people and a combined GDP of $3.8 trillion and eventually at integration of East Asian economies. The Summit assigned an important role to small and medium enterprises (SMEs) and encouraging collaboration in this sector.

NER has a large number of small and medium industries producing a wide variety of commodities, from exquisite silk and handloom products to bamboo wares and exquisite decoration pieces like the famous Assamese japi. These products fetch fabulous prices in big cities like Delhi and Kolkata, but, as middlemen control the trade, the actual artisans in the villages get very little. Expanding the market for these products by trade with ASEAN countries through official or semi-official bodies will assure a better price for the artisans.

But this is not all. Increased trade between India and the ASEAN countries will prove beneficial to both sides, especially in promoting development of the NER. The NER is connected to the main land through a narrow strip of land in northern West Bengal, known as the ‘chicken’s neck.’ Supplying food and other essential commodities to the NER involves heavy transport cost. Consequently, prices of all commodities are much higher in the NER than in the rest of the country. Countries like Myanmar and Thailand, which are close to the NER, can supply many of these items (like rice) at a much cheaper rate by cutting down on transport cost.

India-ASEAN trade is increasing. India’s imports from ASEAN countries grew from $2.9 billion in 1996-97 to over $26 billion in 2008-09. During the same period, India’s exports to these countries rose from $2.9 billion to $19 billion. The total trade of India with ASEAN countries was of the order of $40 billion in 2007-08. The countries of Indo-China are the main import partners of India. However, NER’s share in this was only around 12 per cent. In fact, NER’s trade with some of her immediate neighbours has been declining. Take Myanmar, for example. NER’s exports to Myanmar fell from Rs. 22.45 crore in 1997-98 to a mere Rs. 3.86 crore. Similarly, imports from Myanmar declined from Rs. 35.9 crore in 1997-98 to just Rs. 5.21 crore in 2005-06.

Except oil, paper and fertiliser, there is hardly any other modern industry in the NER. Tea is more an agro-industry rather than a manufacturing industry. Even these industries face a critical situation during the floods, which have become a recurring phenomenon every year in the monsoon months. Production at the public sector fertiliser company at Namarup has to be cur down frequently during the floods because fertiliser produced cannot be dispatched outside the State as the National Highways remain waterlogged. On the other hand, capital has to be blocked in building up huge inventories to keep production going through the flood season. Decades ago, the company put forward a proposal to deepen the Dilli river, which flows past Namrup so as to develop it as a dependable all-season navigable watercourse. But the proposal was shot down by the authorities in Delhi.

The geographical location of North East India makes the countries of South East Asia her natural trading partners. Once the Asian Trilateral Highway becomes ready by 2015, connecting India with Myanmar and Thailand, trade is expected to increase manifold. Officials of the three countries are already busy preparing facilities and drawing up rules and regulations to ensure smooth and hassle-free movement of people and goods through the border check posts.

Yet another effort at expanding trade with ASEAN countries and integrating the economy of the region is the Kaladan Multi-Modal Transit Transport Project. It is expected to be completed by 2014. It will connect the Sittwe port in Myanmar with Mizoram by river and road. In effect, it will mean reducing the distance between the Sittwe port and Kolkata by a good 1,300 kilometres. At the same time it will obviate the necessity of transporting goods from the hinterland of India to the NER through the narrow corridor of ‘chicken’s neck.’

The strategic significance of both the Asian Trilateral Expressway and the Kaladan Project is obvious. At a time when China is suspected to be trying to encircle India by constructing a ‘string of pearls’, an opening in the eastern seaboard of the Bay of Bengal through Myanmar will, in a sense, be India’s answer to China’s having secured an access to the Gwadar port of Pakistan on the Arabian sea by building a highway through Tibet and Pak-occupied Kashmir. (IPA Service)