DMPQ- “India’s north east presents unique opportunities for service sector development.” Elaborate.

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-Pacific 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.

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 significant enhancement of what economic literature calls ‘producer service’ sectors, which include management services, research and development, financial and accounting services, and marketing.

Financial services: Barring Sikkim, the NER lags behind in terms of financial inclusion (NCAER DBT Research). The sector can spur regional growth and it has both efficiency and equity implications. The innovations from the fintech sector can be another line of export.

ICT connectivity: The nature of this sector is similar to financial services. Poor connectivity plagues the NER, which is largely due to its geographical terrain (NCAER DBT Research).

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