The Economy of India's Northeast
Conflict and Development in the Northeast
How decades of insurgency and ethnic conflict affected the Northeast's economy, the role of peace accords, and how peace can support growth.
Parts of the Northeast have experienced insurgencies and ethnic conflicts since independence, with major economic consequences.
The economic costs of conflict
- Investment stays away due to insecurity.
- Extortion by armed groups raises business costs.
- Tourism suffers.
- Infrastructure projects face delays.
- Human costs: deaths, displacement and trauma.
Peace accords
Many agreements have been signed over the decades, including:
- The Mizo Accord of 1986, which ended insurgency in Mizoram, now one of India’s most peaceful states.
- The Assam Accord of 1985.
- The Bodo Accord in 2020.
- Agreements with various groups in Tripura, Karbi Anglong and elsewhere.
Violence overall declined substantially in the region over recent decades.
Manipur
In May 2023, ethnic violence broke out in Manipur between Meitei and Kuki-Zo communities, causing many deaths and displacing tens of thousands of people. The conflict disrupted the state’s economy, transport and daily life, and President’s Rule was imposed in 2025.
AFSPA
The Armed Forces (Special Powers) Act has applied in parts of the region, controversially. It has been withdrawn from many areas as conditions improved.
Peace dividends
Where peace has held, as in Mizoram and Tripura, economies have benefited from investment, tourism and better governance.
After the Mizo Accord, Mizoram saw decades of stability. Schools, roads and businesses expanded, and it became one of India's most literate states.
Violence has declined sharply in most of the region, though conflicts like Manipur's 2023 violence show risks remain.
- Conflict discourages investment, tourism and infrastructure.
- Peace accords like the 1986 Mizo Accord brought lasting stability.
- Violence declined substantially over recent decades.
- Manipur's 2023 ethnic violence caused severe disruption.
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