Regional Economic Agglomeration and Openness: The Economic Development of the North Eastern Region (NER)

In what ways NER should look forward to achieve faster economic growth? The paper proposes two suggestions. First, for NER to keep making progress and to transform into a new economic powerhouse, it needs to improve utilization of scarce resources, improvements in technologies, and the exploitation of scale economies. A finer production fragmentation will make it possible to better explore the comparative advantage within the diverse NER. Trade liberalization and production fragmentation has the potential to eradicate poverty. Second, the regional economic integration will provide a better solution for these problems. Regional agglomeration will help NER in achieving faster economic growth through increasing returns, monopolistic competition, transaction costs and the occurrence of external economies and in turn shape firms’ and labors’ location behavior. Besides, the government should promote export sectors, intensively employing unskilled labor, which will create more job opportunities in the cities for rural surplus labors. A good relationship with Indo-Myanmar depends on Indo-China Relation. Transforming NER into a new economic powerhouse will help India becoming an economic superpower sooner than expected.