Shillong, Jul 12 (UNI) In order to usher in development and prosperity in the Northeastern Region (NER), a qualitative change in the relations among India and its neighbouring countries close to the NER is required, sources at the Union Panchayati Raj Ministry said. In the case of Bangladesh, there could be significant gains from transit fees and access to the markets in the NER, which could also contribute significantly to the reduction in Bangladesh's trade deficit with India, they said.
''Given that economic interests of the NER are affected by the nature of relationship with these countries, it is important that the External Affairs the, Defence and Home Ministries have consultations with the NE states to take account of their views,'' the sources said.
Various political, economic and cultural factors have shaped the making of the Look East (LE) Policy for the Northeast. To give effect to the policy, a large number of administrative measures have been taken in recent years to promote trade in the NER. The recommendations of various studies to develop infrastructure at Moreh and open up other trade points has also seen considerable progress.
Despite this, so far the LE Policy has not delivered any concrete economic gains to the NE States.
The most common form of trade between geographically contiguous areas is border trade, already taking place between the NE States and the bordering countries and is in fact formalised in the agricultural trade under the Indo-Myanmar Border Trade Agreement.
However, for a majority of the items traded internationally, transport costs account for only about five per cent of the final price. A transport subsidy to the NE States is unlikely to overcome this problem.
Coal and limestone trade has sustained the trade link between Meghalaya and Bangladesh, but it is debatable how long mining in Meghalaya will be sustainable, given the environmental concerns in the NER in general.
Further, the pattern of Indo-Myanmar and Indo-Bangladesh trade indicates that the demand of both Myanmar and Bangladesh is largely for industrial items, including processed foods and drinks, animal foods, miscellaneous minerals and manufactured goods, textiles and clothing and machinery and transport equipment.
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