Offsetting the Cost of Extending Arms: An analysis of the Act East Policy

Connectivity, Commerce and Culture are the ‘three C’s’ of the Act East policy (AEP), for which the Indian state is expending such effort. However, a rise in all three C’s will be severely bottlenecked, if the law and order situation of the North-East, which is absolutely central to AEP, is ignored. I am referring to Narcoterrorism and insurgent groups in the region. – Ronit Hazarika*


India’s Act East policy seems to be on a war footing. This was made abundantly clear when the decision was made to invite the leaders of 10 ASEAN countries as chief guests for the 2018 Republic Day celebrations. India has recently seen a flurry of activity in bilateral dialogue with Asian nations, particularly Japan, Vietnam and Myanmar. The ASEAN-India summit in Laos was a success and Modi’s state visit to
Vietnam was received well by southeast Asia. India’s relationship with Myanmar is seeing a new dawn, and mutual visits of leaders between the two countries are becoming a frequent and welcome affair for the two states.

Connectivity, Commerce and Culture are the ‘three C’s’ of the Act East policy (AEP), for which the Indian state is expending such effort. However, a rise in all three C’s will be severely bottlenecked, if the law and order situation of the North-East, which is absolutely central to AEP, is ignored. I am referring to Narcoterrorism and insurgent groups in the region.

Image: 14th ASEAN-India Summit | Credits: Insight Assam

Connectivity is a goal for AEP. But connectivity has a dynamic and robust relationship with the insurgency. On one hand, greater connectivity leads to greater cross-regional crime and extension of antisocial networks.

On the other hand, connectivity suffers disruptions at the hands of crime and insurgency. As an example of the former, because of the rise in drug abuse, HIV rates from the prevalence of intravenous syringes had skyrocketed around the time of liberalisation of the Indian economy. As an example of the latter, trade in
the northeast suffers severely from border blockades, as well as extortions and rent-seeking by insurgent groups such as National Socialist Council of Nagaland (Khaplang division), United National Liberation Front and National Democratic Front of Bodoland (Songbijit faction).


Thus, it is extremely important to deal a death blow to insurgency and organized crime in the region, firstly to offset a very probably expansion of terror and smuggling networks benefitting from better connectivity and greater trade, and secondly, to realize the full potential of connectivity, unhindered and unburdened by the insurgency. We must not forget that India sits immediately to the left of the Golden Triangle – the region shared by Myanmar, Laos and Thailand that produces over 70% of the world’s total opium. The golden triangle is the centre of much of the world’s drug smuggling and arms trafficking operations, and increased connectivity with this region could spell disaster for India if countermeasures are not taken against cross-border crime.
The Indian border with Myanmar has Mizoram, Manipur, Nagaland and Arunachal Pradesh on the Indian side, and the Chin state, Sagaing Division and Kachin state on Myanmar’s side. Since 1994, border trade has been taking place through various border custom posts, called Land Custom Stations (LCS). Currently, there are four LCSs with Myanmar – Moreh in Manipur, Nampong in Arunachal Pradesh, Avangkhu in Nagaland and Zowkhathar in Mizoram, connected to Tamu, Pangsu, Somara and Rhi posts respectively in Myanmar. These are major stations for smuggling of arms and psychotropic substances.

There are extensive value chains of drug production both going out of and coming into India. Urea and Acetate Anhydride, used in heroin refining process, finds its way into Myanmar through Moreh and Churchandpur in Manipur, as well as Champai in Mizoram. There are at least major 30 heroin refineries in the golden triangle, of which 20 are known to be in Myanmar. 15 heroin labs are situated near the Indo- Myanmar border. The Indian pharmaceutical industry is also a source of illicit ephedrine, used in the production of amphetamine-type stimulants (ATS). The most popular ATS is methamphetamine, commonly known as ‘meth’. In recent times, due to low productivity of poppy harvest, meth is gaining popularity. There are at least 60 meth processing labs in the Shan state of Myanmar alone. These labs receive the protection of the Shan State Army insurgent group.

This processed meth and heroin finds its way back into India through several routes. Heroin from Mandalay (which is expected to be a major centre of trade as part of the India-Myanmar-Thailand Trilateral Highway) makes its way to Kalewa, from where it is smuggled to Moreh in Manipur or Champai and Rikhwadar in Mizoram. Heroin from Tamanthi and Homalin makes its way to Noklek and Kohima respectively in Nagaland. Drugs are smuggled into Arunachal Pradesh through the Pangsau pass from Maingkwan. Once inside India, these shipments go to Shillong or Guwahati, from where they are transported to major cities such as Kolkata and Delhi in mainland India. Brown sugar smuggling takes place through the Petrapole-Benapole route between West Bengal and Bangladesh.

Arms smuggling involves routes often extending up to Cambodia and Thailand. While arms were historically smuggled from Yunnan province in China through Arakan in Myanmar, Chinese arms have in recent times overtaken the south-east Asian producers. The United Wa State Army in Myanmar acts as middlemen between Chinese suppliers who trade through Ruili in Yunnan, and Indian buyers such as
NDFB, ULFA, Kuki National Army, NSCN-K, which then sell some of these arms to Naxalites in the Red Corridor. The fishing port of Cox’s Bazaar in Bangladesh has a 130 km long beach and is thus a major logistical centre for arms smuggling carried out overseas. From Bangladesh, arms quickly find their way into Tripura, Meghalaya and West Bengal. With an extension of trade links, Cambodia and Thailand will
get better access to the illicit arms market in India.

In India, suppliers, middlemen and supply routes are protected by major insurgent groups. Insurgent groups depend upon the huge margins of rent derived from arms and drugs smuggling to sustain their activities, and abundance or shortage of these revenue lines do affect their operational capabilities.

Smuggling and trafficking are extremely lucrative businesses, so much so that some dub this business as ‘Dial-An-AK47’. It is no mere happenstance that Manipur has over 30 insurgent groups. It is trafficking and smuggling that rake in the moolah for these terror rings.

There is a very discernible chain of causality here. Increased connectivity leads to increased smuggling, which increases the power and influence of insurgent groups. Thus, if an enhancement in connectivity is not accompanied by safeguards, it will empower terror groups. Besides, insurgent groups act not only as facilitators of trafficking but often as producers. Indeed, India has become the world’s largest producer of methaqualone – known in the market as ‘Mandrax’.

Insurgents also hold the power to directly affect and control the volume of trade. They do this by extortion from traders, as well as rent-seeking and blockades on highways. NSCN-K often preys upon trade routes like NH-39 going out of Manipur. NDFB has a stranglehold on Kokrajhar, which is an important buffer between the northeast and the rest of India.

One could argue that since trade is vital to the revenue streams of insurgents in the northeast, these insurgent groups will not impede trade. This argument is problematic and does not capture other grave dimensions of arms and drugs smuggling. Firstly, the argument is simply not true in and of itself because of what is called ‘tragedy of the commons’ in economics. Insurgents will only allow unhindered trade as long as and as far as the benefits of unhindered trade outweigh the costs. Secondly, while insurgency may not impede fruitful trade routes, they will still have the incentive to interrupt and leech off other peripheral businesses. Thirdly, even if insurgency decreases in the northeast, higher supply of arms will enhance extremism in other regions, most notably armed Maoist rebels. Fourthly, small crimes and drug use will surely rise, due to higher supply and lower prices of drugs and small arms. Lastly, revenue is not the sole goal of insurgents; politics is an important frontier too. Bandhs are often enforced by insurgent groups even though they hurt businesses, which indirectly hurt insurgent groups.

Thus, there are three obvious benefits of dealing with insurgency in time before full operationalisation of projects under AEP. Firstly, a rise in the supply of small arms and drugs will be prevented by rooting out the smuggling networks and middlemen. Secondly, we will have prevented a situation where insurgent groups grew too powerful from the huge increases in profit margins from smuggling. Thirdly, the fruits of AEP will be maximally enjoyed by citizens without any hindrances or leeching, and the north-east, and likewise the rest of India, will be seen as a stable and attractive business destination.


*Ronit Hazarika is a Post-Graduate student from Jindal School of Public Policy. He could be reached at

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Kootneeti Team.

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