When U.S. President Donald Trump signed off on an additional 25% tariffs on imports from India in August 2025, citing trade deficits, the buying of Russian crude, and retaliatory precedent, New Delhi responded with its usual posture — of measured language, closed-door diplomacy and no public retaliation. The choreography was familiar. Washington struck, India absorbed. Official narratives framed it as another episode in bilateral turbulence. But these tariffs cut along fault lines that run inside the country, not just between two capitals. What they expose is not just a trade imbalance but also a deeper spatial imbalance that New Delhi has long refused to reckon with.
India’s export economy is heavily centralised. The four States of Gujarat, Maharashtra, Tamil Nadu, and Karnataka account for more than 70% of all merchandise exports. For Gujarat alone, it is over 33%. This concentration is no accident. There has been an alignment of infrastructure, incentives, and political continuity in these zones for decades. Meanwhile, India’s most populous States, Uttar Pradesh, Bihar, and Madhya Pradesh, remain on the margins, with barely 5% of the country’s outbound trade between them.
A marginalisation of the northeast
Then there is the northeast, whose place in India’s export economy is marginal by design. Eight States, with over 5,400 kilometres of international borders, account for just 0.13% of national exports. There is no operational trade corridor linking them to foreign markets. And, no logistical infrastructure to support volume or role in shaping policy. Instead, what exists is a security apparatus calibrated for counterinsurgency and surveillance. Trade has never been part of the mandate.
The northeast remains structurally unrepresented in the institutions that shape India’s economic future. Not a single member of the Prime Minister’s Economic Advisory Council hails from the region. The Board of Trade, tasked with steering India’s export strategy, has no substantive voice from Mizoram, Tripura, or Arunachal Pradesh. Schemes such as Remission of Duties and Taxes on Exported Products (RoDTEP) and the Production-Linked Incentive (PLI) are rolled out with fanfare in industrial belts stretching from Gujarat to Tamil Nadu. But the hills and the valleys of the northeast are left to navigate global markets without infrastructure, without logistics, and without institutional leverage. This is not mere bureaucratic oversight. It is a cold calculation that the region can be symbolically embraced, yet economically orphaned. As recently as 2024, the Directorate General of Foreign Trade’s strategic export plan had 87 pages without a single section on the northeast’s corridors. The omission was not protested. It was simply assumed.
In Assam, the tea economy is fraying. Prices stagnate, labour shortages persist, and estates are stretched thin. A 25% tariff hike in key western markets threatens to push margins below viability. “We’re holding on with fingertips,” said a Dibrugarh planter who oversees over 500 workers. “If the US [United States] and EU [European Union] buyers cut orders, we’ll have to start scaling back operations immediately.”
The region accounts for more than half of India’s total tea output, but almost none of the high-value packaging or branding. The bulk is still CTC-grade, sold in auctions, exposed to every market swing. Buyers are in reassessment mode and cost-cutting has begun in the Upper Assam belt and the Dooars. Wages are flatlining. Inputs are thinning. The next to go will be jobs.
At Numaligarh, the refinery runs like a nervous artery through Assam’s energy spine. Most of its crude still comes from Oil India and Oil and Natural Gas Corporation Limited fields nearby, but that is changing. The expansion to nine million metric tonnes per annum means that it must look outward toward Paradip, and, increasingly, toward discounted Russian cargoes.
That is where the risk brews. Washington’s tariff play, framed partly as a response to India’s Russian alignment, casts a long shadow here. If the next round of sanctions hardens or shipping lanes tighten, it will not show up in Mumbai’s balance sheets. It will be Golaghat that will shudder.
A silent border with Myanmar, ASEAN
Since the 2021 coup in Naypyidaw, trade across the India-Myanmar frontier has thinned. Highways once envisioned as arteries of regional integration now vanish into checkpoints, chokepoints, and bureaucratic fog. Once porous and alive with exchange, the border now speaks in silence.
India’s two principal gateways to Myanmar, Zokhawthar in Mizoram and Moreh in Manipur, have withered into skeletal outposts. Once central to Act East dreams, they now function more as securitised bottlenecks than trade hubs. Infrastructure remains performative — roads exist on paper, customs offices are understaffed, and cold-chain facilities are nowhere to be found. The scrapping of the Free Movement Regime in 2024 was the final blow, severing not just trade but also kinship, daily life and the interwoven economies of the hills.
Surveillance replaced commerce. These are no longer corridors of trade but containment grids, structured by counterinsurgency logic rather than market demand. Where goods do not move, troops do. And as infrastructure decays, these towns slide from economic relevance into strategic emptiness, mapped not for connectivity but for control. The border is open only to the idea of closure.
The northeast was once mapped as India’s strategic region, a bridge to the Association of Southeast Asian Nations. The bridge never left the drawing board. In policy circles, trade resilience now means shifting from one product category to another, electronics to semiconductors, textiles to pharma. Geography is not a part of the equation. The assumption is fixed — trade flows through the same corridors that served colonial ports and post-Independence industrial clusters. The northeast remains outside that frame, not by oversight, but by design.
Asia’s moves, India’s inertia
As China consolidates its grip over northern Myanmar through infrastructure investments, militia alliances and a growing intelligence footprint, India continues to squander its own flanks. The India-Myanmar-Thailand Trilateral Highway, which begins at Moreh, now vanishes into the jungle. Surveillance, not commerce, defines India’s frontier stance. Where goods do not cross, border forces do. And when movement is reduced to patrols, borderlands do not stay still; they drift toward disorder.
What is required is not reinvention but basic state function. Trade runs on roads, not rhetoric. It moves through warehouses, not white papers. In the northeast, those arteries are missing. Infrastructure is sporadic, and policy presence is thinner still. New Delhi may ink a free trade agreement with London and issue joint statements in Washington, but the substance of those agreements rarely crosses the Siliguri Corridor. The northeast remains unintegrated in both design and delivery. India effectively negotiates global trade while ignoring the geographies that could anchor it.
By treating Mr. Trump’s tariffs as a passing irritant, India sidesteps the deeper structural fault — its trade economy is spatially lopsided. A flood in Gujarat or a labour strike in Tamil Nadu is enough to choke the national pipeline. That is not dispersion, it is dependence. The global chessboard has shifted. Supply chains are in motion. China is repositioning capital. Southeast Asia is building alternative corridors. India claims a role in the Indo-Pacific equation, but its export architecture still rests on a few coastal enclaves. Strategic talk rings hollow when the eastern frontier remains disconnected from the commerce map.
A state cannot claim regional heft while its eastern flank remains economically brittle. The northeast has never asked for slogans. It requires the minimum grammar of statecraft: roads that reach markets, policies that recognise geography, and governance that sees beyond electoral math. For decades, the region has been told to wait through insurgencies, ceasefires, and empty policy acronyms. But the world is moving. Trade disruptions are more frequent. Corridors are shifting. And delay now resembles design.
No single tariff will break India, but repeated regional omissions erode the idea of a cohesive economy. This is not a call for retaliation. It is a demand to reframe resilience, not as a concentration of strength, but as the ability to absorb shocks from every part of the map. Until then, the blind spot stays intact.
Sangmuan Hangsing is a researcher and alumnus of the Kautilya School of Public Policy
