Context

·       When the United States implemented a 25% tariff hike on Indian imports in August 2025, India’s reaction followed a now-familiar pattern: quiet diplomacy, subdued language, and a conspicuous absence of reciprocal action. This restrained response was framed as yet another turbulent moment in the longstanding, complex relationship between Washington and New Delhi.

·       However, beneath this diplomatic choreography lies something far more revealing. The episode did not merely highlight bilateral tensions; it exposed the underlying structural imbalances in India''s own economic landscape, particularly its export geography.

Export Geography and Regional Disparities

·       India’s export economy is heavily skewed toward a handful of states. Gujarat, Maharashtra, Tamil Nadu, and Karnataka together account for over 70% of the country’s merchandise exports, with Gujarat alone contributing more than 33%. This concentration is not incidental. It reflects decades of deliberate infrastructure investments, policy prioritisation, and political stability—factors that have entrenched these regions as industrial and trade powerhouses.

·       In stark contrast, densely populated heartland states like Uttar Pradesh, Bihar, and Madhya Pradesh collectively contribute less than 5% of outbound trade. The unevenness in India’s export economy is pronounced—and persistent.

The Systemic Exclusion of the Northeast

·       Nowhere is this regional imbalance more stark than in the northeast. Despite comprising eight states and sharing over 5,400 kilometres of international borders, the region contributes a mere 0.13% to India’s national exports. This is not the result of oversight—it is the outcome of systemic neglect.

·       There are no operational trade corridors connecting the northeast to global markets. The region lacks the logistical infrastructure necessary to support trade volumes and is effectively absent from national trade policymaking processes. Key export-promotion initiatives—such as the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Production-Linked Incentive (PLI) schemes—are largely implemented in western and southern industrial corridors, leaving the northeast untouched.

·       Even the Directorate General of Foreign Trade’s strategic export plan for 2024 omitted the region entirely. The absence sparked no national debate, as though such exclusion were routine, if not expected.

·       The consequences are both symbolic and material. Assam, for example, which produces over half of India’s total tea output, suffers from low value addition and an over-reliance on bulk CTC-grade auctioning, making it economically vulnerable despite its production volumes.

Borders That Block Instead of Bridge

·       The northeast’s position along international borders has become more of a hindrance than an advantage. What were once viewed as gateways—Zokhawthar in Mizoram and Moreh in Manipur—have deteriorated into militarised checkpoints rather than trade conduits. Following Myanmar’s 2021 military coup, cross-border trade dwindled, and infrastructure investment stalled. The 2024 decision to scrap the Free Movement Regime further severed not just commerce, but long-standing social and economic ties among cross-border communities.

·       These borders have failed to function as links to the Association of Southeast Asian Nations (ASEAN). Instead, they have become containment zones, more active with security personnel than with traders. Promised roads remain unrealised; customs offices are understaffed; and essential logistics facilities are nowhere to be found.

·       In contrast, China continues to solidify its influence in northern Myanmar through hard infrastructure investments and political partnerships. While India speaks of its "Act East" policy, Beijing is already building its next supply chain node.

The Broader Picture: India Hesitates While Asia Moves

·       This inertia is all the more glaring when viewed against the broader Asian context. Across Southeast Asia and China, governments are swiftly adapting to shifting global trade patterns by building new corridors, attracting capital, and restructuring supply chains. India, by comparison, focuses on negotiating trade agreements with Western economies while failing to connect its eastern frontier to the wider world.

·       The continued reliance on colonial-era ports and legacy industrial clusters ignores the strategic necessity of geographic diversification. In neglecting to integrate the northeast into both national and regional trade ecosystems, India weakens its claim to leadership in the Indo-Pacific.

Reimagining the Path Forward: Building a Cohesive National Economy

·       Though Trump-era-style tariffs are unlikely to singlehandedly derail India’s economic trajectory, they do highlight a deeper fragility—namely, the overdependence on a few export-centric enclaves and the persistent sidelining of vast regions.

·       True economic resilience demands a broader, more inclusive vision. A cohesive economy must distribute capacity, not concentrate it. It requires infrastructure that connects interior and peripheral regions—not just coastlines. Most critically, it demands a governance approach that understands geography as a strategic asset, rather than reducing it to electoral arithmetic.

·       The northeast does not require more rhetorical gestures. It needs the basic tools of statecraft: well-maintained roads that lead to viable markets, trade policies that reflect its geographies, and institutional representation in bodies that shape the national economic agenda.

·       For decades, the region has been asked to wait—through insurgencies, truces, and bureaucratic acronyms—while global trade networks transform around it. At this point, delay appears less like neglect and more like a deliberate design.

Conclusion

·       India cannot credibly aspire to regional leadership while leaving its eastern flank economically fragile and politically marginalised. Tariffs may be temporary measures, but the structural exclusion of the northeast has long-term consequences. It undermines national cohesion and compromises the resilience of India’s trade architecture.

·       The very notion of economic strength must be redefined—not as the concentrated performance of a few coastal hubs, but as the collective ability of the entire nation to weather disruptions and engage with global markets. Until India brings the northeast into the economic fold, its strategic ambitions—particularly in the Indo-Pacific—will rest on unstable ground.