Assam, a state in northeastern India, has a diverse economy with a mix of industries, agriculture, and natural resources. However, despite its vast natural and mineral resources, the per capita Gross State Domestic Product (GSDP) of Assam lags behind the national average and other northeastern states. In recent years, the state has seen a shift in its economic structure, with the share of the services sector decreasing significantly while the share of the industrial sector has risen.
The state’s economy is largely dependent on agriculture, tea, petroleum refining, jute textiles, cement, and rubber. The agricultural sector is the largest employer in the state, with over 70% of the population engaged in agriculture or related activities. The tea industry, one of the major contributors to the state’s economy, accounts for over 50% of the state’s total exports. Assam is the largest producer of tea in India, and the tea industry in the state employs over 1 million people directly and indirectly.
The state has vast natural resources such as crude oil, natural gas, coal, limestone, and granite, which have contributed significantly to the industrial sector’s growth. The industrial sector in Assam comprises of manufacturing, mining, and quarrying, and electricity, gas, water supply, and utility services. The state has seen a rise in the number of medium and small-scale industries in recent years, contributing to the state’s overall industrial growth.
Despite having a diverse economy, Assam’s exports are still largely concentrated in the tea sector, which accounts for over 50% of the state’s total exports. However, there are signs of diversification with the state’s exports showing a positive trend in recent years. The government of Assam has identified 15 product categories with high export potential and has set an export target of $527.4 million to $710.3 million by 2024-25.
Achieving this target will require significant efforts and investments from both the government and private sector. The report suggests strategies to unlock Assam’s export potential in various sectors. Let’s take a look at some of these sectors:
Tea sector: Assam has been a major player in the Indian tea industry for decades. However, the tea industry is facing several challenges, including low productivity, high cost of production, and competition from other tea-producing countries. To address these challenges, the report recommends organizing training programs for tea garden owners, making Assam an aggregator of tea exports from India, diversifying tea exports to include blends such as oolong, white, green, and purple tea, and exploring exports of orthodox tea.
Services sector: The services sector has tremendous potential for export growth in Assam, particularly in the IT, BPO, and medical tourism sectors. The state government has already taken steps to boost the IT sector, including setting up IT parks in Guwahati and other major cities. The report suggests further investments in IT infrastructure, training programs for IT professionals, and promoting medical tourism in the state to boost exports in the services sector.
Agricultural and horticultural sector: Assam has enormous potential for exporting agricultural and horticultural products, including fruits, vegetables, spices, and flowers. To boost exports in this sector, the report recommends drafting a district policy for exports, increasing investments in cold storage and transportation facilities, and promoting exports of different varieties of rice.
The report recommends several strategies to unlock Assam’s export potential in various sectors. For the tea sector, the report recommends organizing training programs for tea garden owners to improve the quality of tea production. The report also suggests that Assam could become an aggregator of tea exports from India, with efforts to diversify tea exports to include blends such as oolong, white, green, purple tea, and exploring exports of orthodox tea.
The report also recommends boosting exports of services from Assam, particularly in the IT, BPO, and medical tourism sectors. These sectors have a high potential for growth and have already seen significant investment from the government and private players. The IT sector in Assam is expected to grow at a CAGR of 14.6% during the forecast period 2021-2026, according to a report by ResearchAndMarkets.
Finally, the report suggests strategies to strengthen exports of agricultural and horticultural products, such as drafting a district policy for exports and boosting exports of different varieties of rice. Assam has vast agricultural resources and is known for producing high-quality crops such as Assam tea, black rice, and Bhut Jolokia (Ghost Pepper).
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