NORTH EAST STATES December 2008

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State economy and socioeconomic profile

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Stat e economy and soci oeconomi c profil e

• The North East Region (NER) refers collectively to the eight states located in the midst of the East Himalayan region, comprising , , , , , , and .

• It Covers an area of 262,230 Sq. Km., accounting for 7.9 per cent of ’s total geographical area.

• With a total population of 39 million (Census 2001), it accounts for 3.8 per cent of the country’s total population. CHINA ARUNACHAL • The NER is connected to the rest of India by a 22 km PRADESH wide stretch of land (at , West ). SIKKIM • It shares 2,000 Km. of international borders with Nepal, Bhutan, China (), Myanmar and . ASSAM NAGALAND • The region is well endowed with natural resources MEGHALAYA and, idea l c limati c con ditions f or agrilticulture, plantations and sericulture. BANGLADESH MANIPUR TRIPURA MIZORAM MYANMAR

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SiSocio-economihtic snapshot

Arunachal Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Pradesh

Capital Area (Sq. Km.) 83,743 78,438 22,327 22,429 22,081 16,579 7,096 10,486 Population (2001 1.1 26.7 2.2 2.3 0.9 2.0 0.5 3.2 Census, million) Sex ratio (2001 901 932 978 975 938 909 875 950 Census, per 1000 males) Literacy rate 54 64 69 63 88 67 70 74 (2001 Census, per cent) GSDP (US$ 0.7 13.0 1.2 1.6 0.7 1.4 0.5 2.1 billion) at current prices - 2004 Annual per capita 428 260 314 345 NA NA 384 NA income (US$) - 2001 Natural resources Crude oil, natural gas, coal, marble, forest resources, other minerals Key industries Tea, agro and forest-based products, rubber, natural gas, petroleum, silk, handloom and handicrafts, breweries, distilleries, tanning.

Sources: Official website of Ministry of External Affairs, GOI, www.indiainbusiness.nic.in downloaded on July 2007; Individual state official websites, downloaded on July 2007 and Annual Report 2006-07, Ministry of Development of North East Region, GOI 4 www.ibef.org North East States | December 2008

EifilEconomic profile

¾ Higher contribution of the agriculture sector to the Net State Domestic Product at current prices (1993- GSDP than the country average. 1994 b ase) , i n US$ milli on

¾ Primary sector activities mainly constitute cultivation, States 2001-2002 2002-2003 2003-2004 2004-2005 on which approximately 75 per cent of the region’s population depends for employment; agriculture Arunachal contributes to approximately 30 per cent of the NSDP. Pradesh 430 470 540 560 Assam 7,620 8,330 8,870 9,600 ¾ Secondary sector activity comprises infrastructure, construction and mining; contributes to approximately Manipur 730 760 830 910 18 per cent of the NSDP. Meghalaya 920 990 1,080 1,180 ¾ Industrial products primarily include crude petroleum, Mizoram 440 500 NA NA natltural gas, tea, mi nera ls an dtlfbitid steel fabrication. Nagaland 960 1,110 NA NA ¾ Tertiary sector constitutes tourism-related activities, real estate businesses and public administration; Sikkim 240 280 310 340 contributing approximately 52 per cent of the NSDP. Tripura 1,380 1,500 1,670 NA NER 12, 730 13, 930 NA NA

Source: Individual state official websites, downloaded on July 2007

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EifilEconomic profile

Sectoral contribution to NSDP of NE states compared to Assam GDP composition of India (2002-2003) 100 % ƒ Largest producer of tea in India and, other agricultural produce including rice, maize and jute. 80%

ƒ Secondary industries include coal mining, crude 60 % petroleum, cement and fertilizers. 40 % ƒ Assam accounts for about 15 per cent of India's crude output and about 50 per cent of India's total onshore 20 % production of natural gas. 0 % ƒ Muga silk, known for its natural shimmering gold ura ram ipur chal laya land sam esh ndia kkim pp oo nn aa aa I ss aa colour, is extracted from a species of insect found dd Si A Tri Ma

only in the NER, particularly in Assam. Miz Pra Nag Arun Megh Manipur Agriculture and allied activity Industry Services Source: RBI 2002, www.indiastats.com ƒ The state produces paddy, wheat, maize, pulses, oilseeds and rubber. Arunachal Pradesh ƒ Handloom products are sarees, bed sheets, curtains and woolen shawls. • Major agricultural produce is food grain, oil seeds

ƒ production is above one million ton per and pulses. annum and , the state is also known for bamboo craft . • Handicraft and handloom industry provides employment to a large section of the population.

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EifilEconomic profile

Meghalaya • Main crops include rice, millet, maize and pulses.

• MjMajor crops an d p lantat ions inc ldlude r ice, ma ize, jute, • Major crafts are artistic textiles, cane and bamboo rapeseed, mustard, rubber and coffee. straw, woodwork and metalware.

• Agriculture employs more than 50 per cent of the Sikkim total workforce. • Horticulture is widely practiced in the state . • Main crops produced are rice, wheat and maize. • Major crafts are cane and bamboo-based. • Sikkim produces 80 per cent of India's large cardamom. Mizoram • Sikkim is famous for its locally grown ‘Temi’ tea. • Bamboo forests in the state account for 14 per cent ofthttlbf the total bamb oo f orest area i n I Idindia. • Liquor in dus try is a ma jor source o f exc ise revenue.

• Bamboo is used in construction, agriculture and, Tripura allied services and micro enterprises. • Second-largest producer of rubber in India. The state accounts for about 12 per cent of the total output of fruits in the NER. • Largest producer of true potato seed (a high- yield variety) in India. Nagaland • Fifth-largest in tea production, among the 14 tea- • 70 per cent of the population is dependent on producing states in India. agriculture.

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SiSocio-economifilic profile • The NER has a high literacy rate of 68 per cent, which is higher than the national average of 65.4 per cent.

• Mizoram has the second-highest literacy rate in the country at 88 per cent.

• Educati on i nf rast ruct ure h as i mproved consid erabl y over th e past d ecad e an d, so have the assoc ia te d me tr ics o f teacher-student ratio, enrollment rates and, the number of schools and colleges.

• More than 50 per cent of all the state’s population is employed by the primary sector.

• Handloom industry provides employment to a large section of the population.

Sector-wise distribution of workers Literacy rates Rural Urban Arunachal States Primary Secondary Tertiary Primary Secondary Tertiary Pradesh 54.74 AhlArunachal Assam 64.28 Pradesh 83.4 7.5 9.0 8.7 13.4 77.9 Manipur 68.87 Assam 67.7 6.2 26.2 6.0 13.5 80.5 Meghalaya 63.31 Manipur 75.3 8.9 15.8 28.3 15.6 55.9 Mizoram 88.49 Meghalaya 86.5 3.0 10.5 1.3 14.6 84.1 Nagaland 67.11 Mizoram 88.5 2.4 12.2 30.3 14.7 55.0 Sikkim 69.68 Nagaland 79.7 2.2 18.1 8.4 12.1 79.5 Tripura 73.66 Sikkim 60.8 9.9 29.3 2.1 16.1 81.8 NER 68.00 Tripura 45.7 12.0 42.3 2.7 8.0 89.3 Source: Census of India,2001 India 76.3 11.4 12.4 8.8 32.0 59.2 Source: Census of India,2001 8 www.ibef.org Infrastructure

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PhilifttPhysical infrastructure - roaddilds and railways

• The NER has a total road network of 89,000 Km., including 4, 935 Km . of national highways.

• For every 100 Sq. Km. area, the NER has 45.7 Km. of road length as against the country average of 62.8 Roads and railways (Km.) Km. Total road network 89,000 • The total railway network is 2, 450 Km. long, with National highways 4,935 1,068 Km. of broad gauge and 1,384 Km. of meter Rail network 2,450 gauge; the bulk of the railway network runs through the state of Assam. Broad gauge 1,068 Meter gauge 1,384 • Important rail-heads in the NER are mainly in Assam, at GhtiGuwahati, New BiBongaigaon, JhtJorhat, Tezpur, Roa d length/100 Sq. 45. 7 Dibrugarh Town, Lumding and . Km.

• Central Government has assured disbursement of Surfaced roads 27.1 US$ 12.42 billion over the next five years for per cent infrastructure improvement and, for interlinking the Source: Indiastat.com region through road and rail network.

• Creation of a 7,616 Km. network of inter and intra- state road network under the Special Accelerated Road Development Program

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PhilifttPhysical infrastructure - roaddilds and railways

Road infrastructure (Km.) Road length per National State Major district Village 100 Sq. Km. highways highways roads roads States 21.93 392 NA 12,169 4,657 Arunachal Pradesh

Assam 114.09 2,836 1,811 26,146 44,135

Manipur 51.21 954 1,118 6,638 2,172

Mizoram 24.07 927 354 3,518 NA

Meghalaya 42.65 717 991 5,416 604

Nagaland 126.79 369 398 13,754 5,137 Sikkim 28.45 62 186 1,502 NA

Tripura 155.41 400 136 5,569 7,912

Source: Indiastat.com

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PhilifttPhysical infrastructure - aitdtirports and waterways (1/2)

Air connectivity in the NER Cargo handled by various modes 2006 2007 Increase Mode of Amount transportation handled (MT) 18.70 Flight/ day 32 38 per cent Air () 85.1 16.20 Waterways City pairs/ day 80 93 per cent (Assam) 10,000 Seats deployed/ 18.90 Road NA day 9,493 11,288 per cent Source: Indiastat.com City pairs/day – NE cities connected with other frequented neighbouring cities in India, in a single connecting flight.

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PhilifttPhysical infrastructure - aitdtirports and waterways (2/2)

Airways WtWaterways • 11 airports, with six in Assam and, one each in the • River Brahmaputra in Assam is National Waterway 2 other states excluding Arunachal Pradesh and Sikkim (NW2). River Barak has maximum navigation which have helipads. potential. • Alliance Ai r i s th e maj or carri er i n th e NER. • Connec tiv ity be tween NW1 an d NW2 v ia Bang la des h provides a shorter route than road and railway; best- • The North Eastern Council (NEC) announced plans to suited for bulk commodities and low cost connectivity. set up a dedicated airline for the region. • Waterways of 3,000 Km. have high potential for • 50 airports and airstrips in the NER proposed by the movement of carggpgo and passengers but re quire end o f the 11th Five Year Plan (2007-11), ensur ing 600 infrastructure improvement. flights a week connecting all the state capitals and other cities in the region. • Fund allocation of US$ 51.09 million has been made for the purpose, in the tenth Plan (2002-2007) under the NE pool. • Investment is proposed to be through public sector investment and Public Private Partnerships (PPP).

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PhilifttPhysical infrastructure - power State Potential assessed (MW) Potential developed (MW) Arunachal 50,328 281 Pradesh Assam 674 250 • Present installed capacities in the region are highest iAin Assam an dthld the lowes tiMit in Mizoram. Manipur 1, 784 105 Meghalaya 2,394 185 • The total installed capacity for power generation in Mizoram 2,196 - the NER in 2006 was recorded to be 2404.2 MW. Nagaland 1,574 91 • Major source of power supply is thermal but the NER Tripura 21 15 has hihhigh po ten tilftial for hdhydro power as we ll; e.g., Sikkim 4,286 84 Arunachal Pradesh is expected to generate an additional 22,584 MW of hydel power by 2020 Total 63,257 1,011 through 166 hydel projects. Source: Indiastat.com Installed capacities of power utilities including allocated • The regg,ion also has abundant resource of coal, oil shares in jj()oint and central sector utilities (2005) and gas for thermal power generation. 1200

• Hydro Electric Power: NER has almost 40 per cent of 1000 the country's total hydro potential but only seven per cent has been tapped. 800

WW 600 • Natural Gas: Reserves of 151.68 billion cubic meters M

which is capable of generating 7500 MW for 10 years. 400

• Coal: 864.78 million ton which is capable of 200 generating approximately 240 MW/day for a period of 100 years . 0 Assam Arunachal Meghalaya Tripura Manipur Nagaland Mizoram Sikkim Pradesh Hydro Total thermal Others Source : www.indiastats.com (Annual Report 2004-2005, Ministry of Power, Govt. of India) 14 www.ibef.org North East States | December 2008

PhilIfttPhysical Infrastructure - TlTelecom Number of internet connections Circle 2003-04 2004-05 2005-06 Assam 3,202 3,636 3,143 Telecommunications North East – 1 1,285 1,751 4,590 • Teledensity is 4.95: lower than the India average; gap being bridged by cell phone operators in the region North East – 2 1,345 5,060 4,746 NER 5,632 10,447 12,479 • Mobile services started in 2005 by Reliance and Airtel. India 500,290 785,358 802,701 • Number of cell phone subscribers in the NER stood at Source: www. indiastat. com, Rajya Sabha Unstarred Question No. 3499, about 4.2 million in June 2008. May 18, 2006. • Total number of internet connections stood at 12,479 in Number of telephone connections and teledensity 2005-06, a growth rate of about 121 per cent over States Telephone, 2006 Teledensity 2003-04. Arunachal PdPradesh 126, 373 11. 58 Assam 1,075,537 4.04 Manipur 110,341 4.62 Number of cellular phone subscribers – June 2007 Meghalaya 122,569 5.32 Operators Subscribers Mizoram 99, 229 11. 14 Reliance Telecom 612,283 Nagaland 148,003 7.44 1,005,496 Sikkim 103,014 19.06 BSNL 1,058,307 Tripura 145,737 4.57 Dis hne t Wire less 1, 263, 603 NER 1, 930, 803 4954.95 NER 135,995,192 India 60,177,380 6.04 Source: MoCIT, GoI Source: Cellular Operators Association of India. 15 www.ibef.org North East States | December 2008

SilifttSocial infrastructure - hlthhealth

Health infrastructure NumberNumber of health of centre Healths Centers in NER instates, NER States,2001 2001 5107 • Impressive public health infrastructure through a 610 network of hospitals, primary health centres, primary 600 health sub-centres and community health centres. 532 500 420 420 401 412 • Over 100 hospitals in the NER. 400 353 352 • Allocation of US$ 251.68 million for the NER in 2007- 300 2008 for investment. 246 200 147 • The declining infant mortality rates compare very 121 125 114 100 78 83 66 67 33 28 46 favourably with national averages – since 1981, 15 22 8814 10 15 6 2 16 Manipur has had the lowest infant mortality rate in the 0 country. Arunachal Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Pradesh • Increase in child immunization, and increasing life Hospitals Primary and Community Health CenterSub Center Dispensaries & Others expectancy in almost all NER states. Source: Director of Medican andSource: Health Directorservice ofof Medicalrespective and statesHealth Service of respective States • Apart from Assam and Tripura, there is a surplus of primary and community health centres in rural areas.

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SilifttSocial infrastructure - Educati on

Education

• The NER has a high literacy rate of 68 per cent, as per Census 2001.

• 626 colleges in the region, including 48 professional colleges and 12 universities.

• Important institutes include Indian Institute of Technology, Guwahati; National Institute of Technology, Silchar; regional centres of Indira Gandhi National Open University and central universities.

Number of educational institutes in North East region Arunachal Pradesh Assam Manipur MeggyhalayaMizoramNagaland Sikkim Tripura

Universities 15 2 1 1 1 1 College of general education 10 431 NA 54 25 41 3 14 College of professional education 1 34 NA NA 4 4 4 1 H.S. school 78 620 NA 76 34 45 215 Secondary school 136 4,607 NA711 475 332 93 392 Primary and middle school 1,866 38,410 NA 7,610 2,809 1,993 649 2,489 Other institutions 1 202 10 10 NA 24 4 5 Total 2,093 44,309 NA 8,386 3,390 2,429 798 3,117 Source: NER Datatabank 17 www.ibef.org North East States | December 2008

IdtilifttIndustrial infrastructure Mizoram and Sikkim • Apart form the industrial estates present there are no Arunachal Pradesh other dedicated economic zones presently. • Bamboo Technology Park under construction. Nagaland • Large and medium industries in the state include • IGC would provide all basic services and, facilities in cement plants, fruit processing units, tea and, an industry-friendly environment. plywood industries. • EPIP with industrial infrastructure and facilities is Assam being set up. • Assam has Software Technology Park (STP), Export Tripura Promotion Industrial Park (EPIP), Food Processing • Houses 12 industrial estates. Park (FPP) and four proposed Integrated Industrial Development Corporations (IIDC). • IGC has all basic facilities.

• Industrial Growth Centres (IGC) have physical and State-wise industrial infrastructure social infrastructure Large and medium Small scale Industrial estates/ Meghalaya State Scale industries industries area • Seven industrial estates and areas have basic Arunachal Pradesh 17 2,526 16 infrastructure Assam 115 45,193 21 • An EPIP is being set up with basic services and Manipur 12 57795,779 6 facilities Meghalaya 38 4,564 7 Manipur Mizoram NA 4,600 2 • Houses six industrial areas. Nagaland NA 347 4 • IIDC, EPZ, FPP and growth centres have been Sikkim NA 730 NA proposed. Tripura NA 2,066 12 NER 182 58,337 80 18 www.ibef.org North East States | December 2008

IdIndust tilrial es tttates and areas i n NER

State Name and location of industrial estate Facilities offered Changlang, Miao, Changlang District Roing, ,,g East Namsai, Arunachal Pradesh , Papumpare District Itanagar, Papumpare District , Dis tr ic t Tawang , Khonsa, Tirap District Tippi, Legend:

Manipur Industrial Estates, Takyelpat Power available Road connectivity available Dimapur Nagaland Kohima Water supply available Tuensang

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UbifttUrban infrastructure

Per capita supply of water in various cities (lpcd) Water supply Itanagar (Arunachal Pradesh) • Average per capita supply of water is 78 lpcd. 150

Agartala (Tripura) 100 Guwahati (Assam) • Itanagar, Gangtok and Agartala have adequate water 50 supply Gangtok (Sikkim) 0 Imphal (Manipur) • Cities have 30-40 per cent coveraggye of water supply

Kohima (Nagaland) Shillong (Meghalaya) • Cost recovery is very low; approximately 50 per cent of water supplied is unaccounted. Aizawal (Mizoram) Current Per Capita Supply- litres/day Sewerage system Desired Per Capita Supply- litres/day

• WllWell-dlddideveloped drainage an d sewerage sys titem is no t entirely available in all states. Collection efficiency of solid waste ( per cent)

Itanagar (Arunachal Solid waste management Pradesh) 100 Agartala (Tripura) • Collection efficiency is 50 per cent on an average for 75 Guwahati (Assam) 50 all t he c it ies. 25 Gangtok (Sikkim) 0 Imphal (Manipur) • Solid waste and medical waste management needs improvement. Kohima (Nagaland) Shillong (Meghalaya)

Aizawal (Mizoram)

Ideal collection efficiency ( per cent) Present collection efficiency ( per cent)

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UbifttUrban infrastructure

Roads Road length per capita (m) Itanagar (Arunachal • Per capita road length is lower in all cities except for Pradesh) Itanagar and Aizawl. Agartala (Tripura) Guwahati (Assam) 0.8

0.4 Emphasis on development Gangtok (Sikkim) 0.0 Imphal (Manipur)

• Opportunities of investment in these sectors are vast Kohima (Nagaland) Shillong (Meghalaya) due to recent reforms, government initiatives to improve infrastructure in the region and, quantum of Aizawal (Mizoram) funds flowing into the sector from various donor Per capita road length (m) agencies. Ideal per capita road length (m)

21 www.ibef.org Policy and Incentives

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NthNorth-EtEast regi on poli liicies

Industrial policy of the North East Region, 1997 North East Industrial and Investment Promotion Policy, 2007 • Stimulate development of industries so as to ensure the region’s economic development • The North East Industrial Development Finance Corporation (NEDFi) will continue to act as the nodal • Provide incentives for the development of growth agency for disbursal of subsidies under NEIIPP, 2007. centres and, Integrated Infrastructure Development Centres (IIDC). • Covering all the eight states in the NER.

• Included transport subsidies, attractive fiscal incentives for the new industrial units and, for substantial expansion of the existing units.

• This policy has recently been replaced by the North East Industrial and Investment Promotion Policy, 2007.

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Nor th Eas t Ind us tri a l an d Inves tment P romoti on P oli cy (NEIIPP), 2007

North East Industrial and Investment Promotion • Interest subsidy: Interest subsidy will be made Policy (NEIIPP), 2007 available at 3 per cent on working capital loan under NEIIPP, 2007. • Industries, under this policy, are eligible for incentives for a period of ten years from the date • Comprehensive insurance: New industrial units as of commencement of commercial production. well as the existing units at their substantial expansion will be eligible for reimbursement of • Incentives include various subsidies in 100 per cent ins urance premi u m. transportation of goods, capital investment, interest rates, income tax, power, excise duty and, insurance schemes.

• 100 per cent excise duty exemption will be continue d, on fin is he d pro duc ts ma de in the northeastern region.

• 100 per cent income tax exemption will continue under NEIIPP, 2007 as was available under NEIP, 1997.

• Capital investment subsidy will be enhanced from 15 per cent of the investment in plant and machinery to 30 per cent and, the limit for automatic approval of subsidy at this rate will be US$ 0 .36 million per unit, as against US$ 73, 170 as was available under NEIP, 1997.

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Stat e poli ci es (1/4)

State Industrial policy Tourism policy Agriculture policy IT policy

• Introduced in 2001. • Reduce ppyyoverty by • Introduced in 2001 • 100 per cent equity ensuring economic • Priority accorded to ownership of industries participation of the local increasing farmers’ to investors. community in tourism incomes. Arunachal opportunities. • Stress on development Pradesh • Capacity building and of marketing deployment of ifinfras truct ure. mechanisms in support of • Development of agro- small and medium scale processing units. enterprises.

• Introduced in 2003 • Introduced in 2000. • Increase the share of • For the IT industries, industrial sector to State many special Domestic Product. incentives have been • Attract out of state proposed. investments. • Policy encourages • Promote private sector private sector ittinvestments. participation in setting Assam up of IT units. • Develop industrially backward regions. • Growth and development of SSI units. • Promote IT, biotech and export oriented industries. 25 www.ibef.org North East States | December 2008

Stat e poli ci es (2/4)

State Industrial policy Tourism policy Agriculture policy IT policy

• Introduced in 2002. • Introduced in 2003. • Focus on enhanced • Single window investments, investor- system. friendly environment, • 50 per cent provision for infrastructure concession on rentals MiManipur and institutional support. for five years. • Setting up of IT centres, • Local entrepreneurs IIDC, EPIP, EPZ and an will get 50 per cent IGC. concession on rentals for two years.

• Introduced in 1997. • Introduced in 2001 • Introduced in 2004 • Encourages public and • Benefits to reach the • Encourage setting up private sector investments, grassroots of the of IT units with infrastructure development, populace, mitigating adequate incentives. development of EPIP and innumerable • Setti ng up of IT - growth centres. interlinked problems. Meghalaya related organizations. • Promote industrialization of • Strong incentives • Build IT Infrastructure backward areas with have been put forward including an IT park. infrastructure facilities. in the policy to attract • Drive investments in investment. the sector .

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Stat e poli ci es (3/4)

State Industrial policy Tourism policy Agriculture policy IT policy

• Introduced in 2002. • Introduced in 2001. • Improving infrastructure • IT interventions in like road, power, administration, communication and water education, health, supply. rural development, • Establishing Growth agriculture and Centres, Industrial Estates tourism. and areas, EPIP, IT Park • Encourages private Mizoram IIDC and SEZ. sector to establish • Special promotional SftSoftware T ech nol ogy packages for rural and Park (STP). traditional industries. • Attractive package for • Focusing on training setting up such units facilities and, developing and, also provides researchddlh and developmen t single window facilities. clearances.

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Stat e poli ci es (4/4)

Agriculture State Industrial policy Tourism policy IT policy policy

• Introduced in 2000 . • Introduced in 2004 • Industrial areas with • Provides tax and other infrastructure facilities of incentives and, quality adequate power and infrastructure for Nagaland water supply. development and growth. • Attractive incentives • Creation of a statewide have been proposed. network with a central control mechanism.

• Follows NEIIPP 2007 for • Introduced in 2006. industrial promotion. • Envisaged to lead to Sikkim em pl oym en t gen er ati on , resource mapping.

• Tripura Industrial • Eco tourism policy • Introduced in 2000 Development Agency introduced in 2004. • Separate objectives for acts as a single window • Take advantage of the electronic governance and for facilitation . natural beauty, promote setting up of IT industries. • Simple, transparent and sustainable tourism as a • Simple procedures have need-based package of source of revenue and, been laid down for Tripura incentives. create local approval for IT industries, • Identification and employment. with adequate incentive facilitation of food schemes. processing, natural gas, IT and, export -oriented projects.

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CtldSttLCentral and State Leve lIl Incen tifIdtitives for Industries

Central Arunachal Category Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Government Pradesh

Land subsidy DD D

Transport subsidy DD D DD D

Capital investment subsidy D D DDDDD D

Interest subsidy D D DDDDD D

Insura n ce scheme D Follow NEIIPP Income tax 2007 exemption DD D

Power subsidy D D D D D D D D

Excise duty exemption DD D

Sales tax D D D D D D

Price preference DD DDD 29 www.ibef.org Business Opportunities

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KthtKey thrust areas (1/2)

Arunachal Sectors Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Pradesh Tourism ÏÏ ÏÏÏ IT-based industries ÏÏ Ï Ï Ï ÏÏ Tea-based industries ÏÏ Ï ÏÏ Food processing ÏÏÏÏ ÏÏÏÏ industry Infrastructure Ï Crude oil and ÏÏ Ï Ï natural gas Petrochemicals ÏÏ Ï Pharmaceuticals ÏÏ ÏÏ and bio-tech Agro-based industry ÏÏÏÏ ÏÏÏÏ Forest-based industry ÏÏ Ï ÏÏÏÏ Fishery industry Ï Sericulture-based ÏÏ ÏÏÏ industry Mineral -bdbased ÏÏÏÏ ÏÏÏ industry

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KthtKey thrust areas (1/2)

Arunachal Sectors Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Pradesh Engineering ÏÏÏÏ Ï industry Chemicals industry ÏÏÏÏ Services sector ÏÏÏÏÏ Handloom sector ÏÏÏÏÏÏÏ Handicrafts sector ÏÏÏÏ ÏÏÏÏ Textile-based ÏÏ Miscellaneous Ï Ï Ï Ï Ï Ï Ï Ï industry Horticulture ÏÏ Ï Floriculture ÏÏÏ

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Attrac tive sec tors (1/8)

Tourism Rubber plantation Agro-based industries Virtual paradise for travellers where Integrated approach for rubber industry NER has an agrarian economy various categories of tourism can development has been adopted in NER. and tremendous ppgotential for agro- be explored. based industries.

Favourable business environment ¾ Lucrative incentives Energy intensive industries ¾ Complimentary policies IT industries Availability of large natural gas ¾ Availability of manpower States have an attractive IT policy reserves offers a great opportunity ¾ Special infrastructure (EPZ, IIDC, for governance and for IT units. to prospective investors. SEZs etc.) ¾ Abundant natural resources ¾ Favourable climate for plantation

PtPetrol eum and nat ural gas Tea production Half of onshore oil reserves and NER accounts for more than half of more than half of onshore gas India’s total production of tea. reserves in India lie in the NER.

Key Mineral-based Industries Tourism

Forest-based industries Petroleum Information and natural technology Sericulture Various valuable trees and gas-based Offers great potential and needs medicinal plants are available in Agro and Engineering to be organised for profitable abundance in the forests of NER. forest-based Growth.

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Attrac tive sec tors (2/8)

Tea production Tourism Agriculture and allied industries

Assam Arunachal Pradesh Assam • Produces 51 per cent of India’s tea and, • Eco-tourism, wildlife, adventure, • 75 per cent of workforce engaged in accounts for a sixth of the tea produced cultural and historical tourism agriculture and, allied activities, with ggylobally. opportunities. 40 per cent area under cultivation. • Home to one of the world’s oldest and Assam • Agriculture contributes roughly 40 per largest tea research centres, started in • Natural landscape, green forests, cent of the GSDP. 1911. famous wild life sanctuaries, Manipur •Woodssecodrld’s second-lar gest tea aucti on pil grim age spots. • Aggri cul tur e sector em pl oys 7 6 per cen t centre, established in 1970 at Guwahati. Manipur of the workforce. • Production of 290.1 million kilograms in • Known for its natural beauty and, • State’s traditional agro-based liquor, 2007. exotic flora and fauna. Yu, is comparable with any other Mizoram Meghalaya quality liquor. • Tea produced in Mizoram has a distinct • Scope for nature tourism, adventure Meghalaya quality and flavour, similar to tea grown tourism and health tourism. • 80 per cent of state’s population in high altitudes such as the Nilgiris and depends on agriculture. the . • States’ produce of turmeric is considered the best in the world.

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Attrac tive sec tors (3/8)

Tea production Tourism Agriculture and allied industries

Sikkim Mizoram Nagaland • Known for ‘Temi Tea', considered a • Bamboo forests, virgin rivers and • Over 70 per cent of the population is top quality and premium tea in the mountains have the potential for dependent on agriculture. international market. adventure tourism. • Of the total ggppross cropped area under Nagaland Tripura cultivation of food grains, rice • Reputation as the ‘Land of Festivals’ • Tripura, is fifth-largest among the 14 accounts for about 70 per cent. and, rich art and, culture of the people tea producing states of India. Sikkim is a major tourist attraction. • State is categorised as a traditional • Agriculture plays a dominant role in Sikkim tea-growing state - with about 60 tea the state economy. • With a clean environment, natural estates and, 3,000 small tea growers, • Vast potential for the commercial beauty and, a rich cultural heritage, producing about 7.5 million Kg. of tea the state has abundant tourism production of large cardamom, ginger, every year . opportititunities. medicinal herbs and exportable Tripura flowers. • Rich cultural heritage and, rich flora and fauna have the potential for nature tourism opportunities.

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Attrac tive sec tors (4/8)

Handicrafts and handloom IT industries Professional education infrastructure

Manipur Manipur ¾ Vast potential for private professional ¾ Handloom industry provides maximum ¾ accords high education and training institutes for employment after agriculture. priority to the electronics and students in NER. ¾ Handicrafts ppyproduced by Manipur information technology sector as a ¾ This will create a market for skilled have a unique place in the various major thrust area for development. labour as well as provide business for crafts of the country. Meghalaya the private educational institutes. ¾ Kouna (water reed) craft also has ¾ Strategic location of Meghalaya for IT ¾ Sectors of education may include IT, huge potential for large-scale business in South East Asia, the management, biotechnology , plantation, production and marketing. surplus power generation and, its high mining/minerals and agro-sciences. Mizoram literacy rates are contributing to the ¾ Handicrafts industry is built on cane, focus on the IT industry as a strategic bamboo and textile craft . Its popularity sector for the state. is due to special features such as pliability and strength.

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Attrac tive sec tors (5/8)

Handicrafts and handloom IT industries Professional education infrastructure

Tripura Mizoram • The Ministry of Human Resource • In Tripura, handloom represents a • IT policy covers the vital sectors of Development (MoHRD) has taken unique harmonious blend of three industry, education, government, certain initiatives such as setting up a traditions - Tribal, Bengali and health, tourism, agriculture and IT for new Indian Institute of Management Manipuri weaving. masses. (IIM) in the NER, setting up of a • Tribal fabrics of Tripura are well • The policy has provided a number of Faculty of Engineering and known for their elegant design, bold incentives for entrepreneurs in the Management in select institutions in color combination and lasting texture. state. each state of the NER. Tripura • IT sector has been identified as one of major potential growth sectors by the state government. • NEDFi is setting up an IT Park in Tripura, which will provide all necessary infrastructure facilities required for IT sector .

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Attrac tive sec tors (6/8)

Medicinal and aromatic plants Sericulture industries Forest-based industries industries

Assam Assam • Various valuable trees like bamboo, • About 300 types of medicinal herbs • Traditional varieties of silk cultured cane, sal, teak, bansom, simul, sishu, and plants are known to exist in include eri, muga and mulberry. gamari, sarol, halokh, are available in abundance in the state. • State offers a tremendous potential abundance in the forests of NER. • It is estimated that only about five to for the development of large-scale • As per the available statistics of 10 per cent of the plants and herbs industry based on silk. recent years, the forests of this are currently utilised for commercial Manipur regg,ion, on an avera g,pge, provide 7.05 purposes. • Sericulture is a traditional industry in million tonnes of bamboo (one of the Nagaland the state. largest contributors in India), 0.8 • Medicinal herbs and plants are • All varieties of silk are produced in the million cubic meter of ordinary timber abundantly available in the hilly state, viz ., , tasar, eri, muga and and soft wood for the production of regions of the state. mulberry silk. 0.16 million cubic meter plywood etc. • One of the most valuable medicinal Nagaland plants found in the state, commonly • State government has identified seri- known as Ginseng, has tremendous culture as a thrust area. export potential.

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Attrac tive sec tors (7/8)

Bamboo-based industries Rubber plantation

Mizoram Tripura • Mizoram contributes to about 14 per cent of India’s • Tripura accounts for the second-largest production of total bamboo production. rubber in India after Kerala. The Rubber Board now • About 20 varieties of bamboo have been recorded in considers Tripppura the "Second Rubber Capital of the forests of Mizoram. India". • Only about 10 per cent of locally produced rubber is Tripura used by industrial units and the remaining is sold • Tripura is endowed with rich and diverse bamboo outside the state. resources. • Availability of high-quality rubber offers sufficient • Only about two per cent of the extracted bamboo is scope for setting up of rubber-based industries in the utilised for value addition through handicrafts, etc.; state immense potential for commercial use .

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Mineral-based industries

Mizoram Assam • Minerals in Mizoram are typically hard rock of • State accounts for about 15 per cent of India's tertiary formation, which is mainly utilised as crude oil output. building materials. • Wells at Digboi, Duliajan, and Sivasagar produce Nagaland natural gas accounting for about 50 per cent of • Mineral and fossil fuel reserves which can be India's total onshore production. exploited for commercial purposes are petroleum • Limestone, china clay, decorative stones and and natural gg,ggas, high grade limestone , marble coal also have high reserves in the state. and dimensional/ decorative stones and coal. Meghalaya Tripura • Wealth of mineral deposits has great industrial • Natural gas available is of high quality, with high potential. methane content of up to 97 per cent. • Large deposits of coal, limestone, granite, clay and other minerals for commercial exploitation.

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IttiNERInvestments in NER State-wise assistance approved by Ministry of DoNER 2006 (percentage)

• Total amount of investment approved by the Ministry of Development of North-East Regg(ion (DoNER) was US$ 1.31 billion. Maximum amount was approved for Assam, Tripura and Nagaland in roads, power and education sectors.

• NER is expecting investments and trade opportunities from Thailand and will exppplore potential of rubber, tea and bamboo industries for developing exports.

• Significant investments are coming in from the Central Government and International Financial Institutions for the development of infrastructure. Source: Ministry of Development of North East Region

• Asian Development Bank is investing in road projects, urban development projects, trade and capacity building.

• World Bank is investing in natural resources, water, environment and livelihood projects.

Source: Ministry of Development of North East Region

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KlKey players ithiin the region

Industry player Key highlights

North Eastern Regional Agricultural Marketing • Public sector undertaking incorporated in 1982 Corporation Ltd. • Helping farmers in procurement of agro-horticultural commodities. • Engaged in fruit preservation training programmes.

North Eastern Handicrafts and Handlooms • Public sector undertakinggp set up in 1977. Development Corporation Ltd. • Responsible for promotion, development and marketing of handicrafts and handloom products of NER.

Oil and Gas Corporation Ltd. • Set up in 1955. • Extracts oil and natural gas in the region and also engaged in exploration activities.

Oil India Limited • Pioneer in field of crude oil transportation. • Owns and operates the state of the art pipeline having the capacity to transport over eight MTPA of crude oil feeding four public sector refineries in North East India.

Reliance Group • India's largest private sector enterprise. • Providing mobile services in the region and expanding into the petrochemical sector.

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KlKey players ithiin the region

Industry players Key highlights

Acer • Manufacturer of desktops and notebooks, planned to set up six Acer malls and four Acer points. • Focussing on retail business.

Greenppyly Industries Limited • Leader in the plywood and laminate industry established in NER. • Greenply accounts for 25 per cent of its organised plywood and, 15 per cent of its organised laminate market and operates in Arunachal Pradesh.

Sarda Plyy()wood Industries Limited (SPIL) •SPIListheflaggpship comppyany of a ppgrestigious Chitlangia Group and was founded in 1957. • Plywood manufacturing facility is established in Assam.

Apeejay Tea Limited • Founded in 1889 in London, one of the oldest tea companies in the world. • Each of the group's gardens is ISO 9002 compliant. • Has the largest tea factory in Assam. • Great emphasis is being laid on the development of direct exports.

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KlKey players ithiin the region

Industry players Key highlights

Tata Tea • Set up in 1964 as a JV with UK-based James Finlay and Company to develop valued-added tea operations with product and brand presence in 40 countries. • Represents the world's second-largest global branded tea. • Extensive plantations in the state of Assam.

Williamson Tea Assam Limited • Founded in 1869, a family-owned enterprise • 17 tea estates in Assam producing 21 million kilograms of tea for domestic and export consumption

McLeod Russell India Limited • Group's principal activity is to cultivate, manufacture and market tea • Early producers of Assam tea

Local and regional groups • Shivdham Industries Pvt. Ltd., Sikkim Mining Corporation, Manipur Cements Ltd., DHTC (India) Ltd., Manipur Spinning Mills Corporation Ltd.

Other players in tea sector • Bishnauth Tea Co., Assam Company, AFT Industries, Bengal Tea and Fabrics, Goodricke Tea, etc.

44 www.ibef.org Doing Business

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KlidKey approvals required

List of approvals and clearances required Respective departments of states

Incorporation of company Registrar of companies

Registration, IEM, industrial licenses Department of industries, Respective state governments Permission for land use

Allotment o f lan d SidildlState industrial development corporat iLdion Ltd.

Site environmental approval State pollution control board No objection certificate and consent under water and Pollution Control Act Registration under States Sales Tax Act and Central and State Excise Act Excise department Commercial taxes

Sanction of power

Power feasibility Power department/State electricity board

Power connection

Approval for construction activity and building plan

Water and sewerage clearance Public works department

Water connection

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AtfdibiAverage cost of doing business

Parameter Cost

Manufacturing

Land price (US$/Sq. Km.) NA

Labour (US$/man year) 497 – 994

Lease rent (US$/Sq. Km. /month) 2.48 – 7.45

Electricity (US cents/unit)

Commercial 9.94 – 11.18

Industrial 6216.21 – 9949.94

Office space rent (US$/Sq. ft./month) 0.75 – 2.48

Residential rent (US cents/Sq. ft./month) 24.84 – 49.69

5-star hotel room (US$ per night) 37. 3 – 74. 5

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BiBusiness c litlimate

Abundance of natural resources Improvement in connectivity and infrastructure

• Region has enormous natural resources like oil, • Substantial investments from Government/IFIs for the natural gas, abundant reserves of minerals, and development of roads , railways , airways and forest resources; waterways.

• Region has favourable climate for tea and rubber • Opportunities in development of industrial and urban plantations; infrastructure under various PPP models.

• Immense potential for commercial exploitation of • Opportunities for investment in the industrial and natural resources; urban sector are vast due to recent reforms to overcome the lack of adequate infrastructure • Ideal environment for success of agro and forest- services. based industries. • Development of significant infrastructure would Favourable policies and incentives catltalyse the grow th o f the in dus tr ies an d prov ide an • Attractive incentives and subsidies on power, ideal business climate for upcoming industries. transportation, land, capital investment. International trade opportunities

• Further incentives for promotion of thrust sector • Geographic location of the NER provides immense industries and, export-oriented industries such as opportitifittunities for internati tiltdonal trade with neihbighbour ing food processing. countries of Bangladesh, Myanmar, Bhutan, China Availability of skilled labour and Nepal.

• Average literacy rate of the NER is 68 per cent; • Specific initiatives undertaken by the Central and higher than the national average. state ggpovernments for promotion of cross-border trade with said countries; trade agreements, infrastructure • Strong communication skills since English is a widely- improvements to provide an additional impetus. spoken language. 48 www.ibef.org Overall state competitiveness

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Advan tage – NthEtNorth East

• Vast untapped potential in natural resources such as oil and natural gas, minerals, agricultural and forest products, and hydel power;

• Congenial investment climate - comprehensive central policy for NER and liberalised state industrial policies, both providing attractive incentives and subsidies with proposed deploy ment of single window clearance facility;

• Location suitability for foreign trade with neighbouring countries, particularly China and Bangladesh;

• Favoured choice for tourists with its pleasant climate, scenic landscape and adventure tourism options.

• Availability of skilled and cheap workforce;

• Strong communication skills since English is a widely- spoken language in the NER.

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OllttOverall state competiti veness

Arunachal Parameter Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Pradesh

Opportunities in type of industry

Tourism

Information technology

Food processing industry

Crude oil and natural gas

Petrochemicals

Pharmaceuticals and biotechnology

Agro and forest-based industry

Mineral-based industry

Engineering industry

Chemicals industry

Handloom and handicrafts

Sericulture-based industry

High Medium Low 51 www.ibef.org North East States | December 2008

OllttOverall state competiti veness

Arunachal Parameter Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Pradesh Doing business Fiscal and non-fiscal incentives

Cost of doing business

Ava ilabilit y of lblabour

Setting up and carrying out business Industrial infrastructure existing and proposed

Power

Connectivity

Industrial estates/areas

STP

EPIP

EPZ

IIDC

Industrial growth centre

High Medium Low 52 www.ibef.org North East States | December 2008

DISCLAIMER

This presentation has been prepared jointly by the India Brand Equity Foundation (‘IBEF’) and Ernst & Young Pvt. Ltd. (‘Authors’).

All rights reserved. All copyright in this presentation and related works is owned by IBEF and the Authors. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicatedtoanythirdpartyexcept with the written approval of IBEF.

This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of the Author’s and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.

The Author and IBEF neither recommend or endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed in this presentation.

Neither the Author nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.

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