India’s Export Economy Faces Deep Regional Imbalances
India’s export economy in 2025 remains heavily concentrated in a few states. When the United States imposed a 25% tariff on Indian imports, it exposed not only bilateral tensions but also internal economic disparities. The impact varies greatly across regions, revealing a spatial imbalance that challenges India’s growth and resilience.
Concentration of Exports in Few States
Over 70% of India’s merchandise exports come from Gujarat, Maharashtra, Tamil Nadu, and Karnataka. Gujarat alone contributes more than one-third. This concentration results from decades of aligned infrastructure, political stability, and incentives. Meanwhile, populous states like Uttar Pradesh, Bihar, and Madhya Pradesh contribute less than 5% to exports, showing a stark divide.
Marginalisation of the Northeast
The northeast, with eight states and over 5,400 km of international borders, accounts for only 0.13% of national exports. It lacks trade corridors, logistics, and institutional representation. Security concerns dominate policy, sidelining economic development. Key export schemes focus on western and southern industrial hubs, leaving the northeast economically orphaned.
Challenges in Assam’s Tea Industry
Assam produces over half of India’s tea but faces stagnating prices and labour shortages. The US tariff hike threatens margins and jobs. Most tea is sold as bulk CTC-grade without branding or packaging, making it vulnerable to market shifts. Cost-cutting has begun, risking further decline in employment and output.
Energy and Trade Risks in the Northeast
The Numaligarh refinery in Assam is expanding but increasingly depends on imported crude, including discounted Russian oil. US tariffs linked to India’s Russian ties could disrupt supply chains. Economic shocks here would not register in national statistics but would deeply affect local economies.
Decline of India-Myanmar Trade Routes
Trade across the India-Myanmar border has dwindled since the 2021 Myanmar coup. Key gateways like Zokhawthar and Moreh have become securitised bottlenecks. Infrastructure is inadequate and bureaucratic delays persist. The scrapping of the Free Movement Regime ended traditional cross-border trade and kinship ties, replacing commerce with surveillance.
Geopolitical Shifts and India’s Inertia
China’s growing influence in northern Myanmar contrasts with India’s neglect of its eastern frontiers. The India-Myanmar-Thailand Trilateral Highway remains incomplete and underutilised. India’s trade strategy ignores geography and infrastructure gaps. This weakens its role in the Indo-Pacific and leaves the northeast disconnected from economic growth.
Structural Vulnerabilities in India’s Export Model
India’s export economy depends on a few coastal hubs. Disruptions in these zones can choke national trade flows. Despite global shifts and emerging supply corridors in Southeast Asia, India’s export infrastructure remains spatially lopsided. Resilience requires dispersal of trade capacity beyond traditional centres.
Need for Inclusive Economic Integration
The northeast demands basic infrastructure like roads, logistics, and policy recognition. Its exclusion is not accidental but systemic. Without integrating all regions, India risks eroding the idea of a unified economy. Economic resilience must include all geographies to absorb shocks from every part of the country.
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