Last updated: Dec, 2023
Introduction
Assam is located in the northeast of India. The state shares its borders with Arunachal Pradesh, Nagaland, Manipur, Mizoram, Meghalaya, Tripura, and West Bengal. The state shares international borders with Bangladesh, Myanmar, and the Kingdom of Bhutan. Assam is India's gateway to the northeast and acts as a vital link for trade with Southeast Asian countries. The state is known for its tea, petroleum resources, Muga silk and biodiversity. It is also becoming an increasingly popular destination for wildlife tourism.
The state is rich in water resources and has vast tracts of fertile land. Assam is also the third-largest producer of petroleum and natural gas in the country and has ample reserves of limestone. With its five national parks and 18 wildlife sanctuaries, the state is a biodiversity hotspot. Other potential areas of investment include power and energy, mineral-based industries, tourism, and crude oil refining.
Assam has adopted numerous investor-friendly policies to attract investments and accelerate industrial development. Key areas of focus include the IT, tourism, and power sector along with several other initiatives such as the Northeast Industrial and Investment Promotion Policy (NEIIPP) 2007 and the Industrial and Investment Policy 2014. Assam stood 22nd among Indian states in rankings based on ease of doing business and reform implementation, according to a study by the World Bank and KPMG. The Government has set a target to generate 6,500-megawatt (MW) power in the state by 2030.
At current prices, the Gross State Domestic Product (GSDP) of Assam is estimated to be at Rs. 5.67 lakh crore (US$ 69.25 billion) in 2022-23. The GSDP increased at a CAGR of 13.90% between 2016-17 to 2022-23.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), the cumulative FDI inflows in Assam were valued at US$ 20.73 million from October 2019-June 2023.
Exports from the state stood at US$ 181.64 million in FY23 (Until August 2022). Assam exported key items such as tea, petroleum products, coal, coke briquettes and other products. In FY22, the total tea exports from Assam accounted for US$ 179.65 million, which was 40% of the total exports.
Recent Developments
- In the February 2023 cabinet meeting, Rs. 270 crore (US$ 33 million) was sanctioned as Grant-in-Aid to Mega Mission Society - Chief Minister Samagra Gramya Unnayan Yojana for paddy procurement by Assam Food & Civil Supplies Corporation Ltd. in an uninterrupted manner and also implement Mission Amrit Sarovar.
- For all-round development of Assam, approval to raising of approx. Rs. 414.42 crore (US$ 50.6 million) loan by the Government of Assam from NABARD for the following sanctioned projects
- 1,000 Model Anganwadi Centers in 35 districts: Rs. 223.80 crore (US$ 27.3 million)
- 3 Rural Road Projects in 2 districts: Rs. 160.69 crore (US$ 19.6 million)
- 39 Soil Conservation and Water Harvesting Projects in 20 districts: Rs. 29.91 crore (US$ 3.7 million)
- The proposal for the construction of a bridge over Brahmaputra connecting Panbazar with North Guwahati has been approved by the Ministry of Finance, Government of India with a proposed cost of Rs. 1,890 crore (US$ 293.25 million). New Development Bank (NDB) will be funding this project.
- 73% of construction is complete with the bridge expected to be ready by 2024. The main portion of the bridge will be 1.24 km long. After crossing the bridge from Guwahati, the road will be six lanes up to Gauripur.
- In August 2021, the Adani Group announced undertaking the Lokpriya Gopinath Bordoloi International Airport in Guwahati, as part of its mandate to develop and modernize Northeast India's main airport by October 2021.
- To increase the quality of healthcare, five new medical colleges will be built in the state. At Bongaigaon, Behali and Sualkuchi, three new engineering colleges will be established. In Karbi Anglong, a state university will be constructed for students from hill districts under the State Budget 2021-22.
- In February 2021, India and the Asian Infrastructure Investment Bank (AIIB) signed a US$ 304 million loan agreement for the Assam Intra-State Transmission System Enhancement Project to improve the reliability, capacity and security of the power transmission network in the northeastern state. The project aims to strengthen Assam's electricity transmission system by constructing 10 transmission substations and laying transmission lines with the associated infrastructure.
- In February 2021, the Chief Minister of Assam, Mr. Sarbananda Sonowal, laid the foundation stone of Assam Skill University at Mangaldoi, Darrang. The university will provide skill education to the youth of India with a specific focus on Assam, and Northeastern region. This project is scheduled to be completed by September 2026. The Government of Assam is exploring partnership arrangements with countries such as Singapore, Germany, Taiwan, South Korea, Australia, Israel, Japan and the UK for providing sector-specific expertise to this university.
- In February 2021, Prime Minister Mr. Narendra Modi launched the ‘Asom Mala’ programme in Dhekiajuli of Sonitpur district to enhance the state's road infrastructure, boost economic progress and improve connectivity.
- In January 2021, BCPL Railway Infrastructure received a new order worth Rs. 516.04 million (US$ 6.96 million) for supply, erection, testing and commissioning of 25KV, 50HZ single phase traction overhead equipment (OHE).
- In March 2021, BCPL Railway Infrastructure received an LOA (Letter of Authority) from Railway Vikas Nigam for the deployment of 25KV OHE Gang to complete residual overhead (OHE) adjustment works and provision of bonding/earthing work and safety-related work in a section of Sreerampur Assam - Fakiragram of NF (Northeast Frontier) Railway.
- The project, which is expected to be completed over 45 days, has added Rs. 165 crore (US$ 19.8 million) to the company’s orderbook.
- The government of Assam has started the project preparatory activities for the World Bank-funded Inland Water Project under the Inland Water Transport Department at Rs. 975 crore (US$ 150.60) which will help realize the huge untapped potential in this sector.
Key Sectors
- In September 2023, the estimated tea production in the state stood at 88.44 million kilograms. For FY23, the production stood at 698.38 million kgs.
- In 2021-22, tea production in the state stood at 672.14 thousand tonnes. Assam’s Labour and Tea Tribes Welfare Minister, Mr. Sanjay Kishan, informed that COVID-19 care centres have been set up in >270 tea gardens. While in March 2023, tea production in the state stood at 33.39 million kgs. As of May 2021, 27,000 tea garden workers have been given the first dose of vaccination and 2,400 have been given the second dose. The government is speeding up the process with offline, on-the-spot registration facilities.
- Agriculture and Allies In 2021-22, the total production of horticulture crops in the state was expected to be 6738.58 thousand metric tonnes and the area under production was 662.36 thousand hectares. In 2019-20, the total production of vegetables and fruits in the state was estimated at 3673.88 thousand metric tonnes and 2,562.30 thousand metric, respectively.
- To revive the agricultural sector and double farmer incomes by 2022, the state government launched the ‘Assam Tractor Distribution’ scheme, under the Chief Minister’s Village Development Scheme (CMSGUY) for farmers.
- According to Assam’s Chief Minister Mr. Himanta Biswa Sarma, the state has 350 hectares of oil palm cultivation, covering Goalpara, Bongaigaon and Kamrup districts, which could be beneficial under the Union Government’s newly launched National Mission on Edible Oils - Oil Palm (NMEO-OP).
- Sericulture: Assam enjoys a global monopoly in terms of Muga silk (also known as golden silk) production. The state accounts for around 95% of global Muga production. Moreover, Assam is the country’s major Eri silk producer (accounts for 65% of the country’s Eri silk production). Under the State Budget 2020-21, the Government allocated Rs. 289 crore (US$ 41.35 million) for the Handloom Textiles and Sericulture Department.
- Health: In May 2021, Deputy Commissioner Ms. Keerthi Jalli inaugurated the Arogya Cachar Scheme, a centralized public grievance redressal system for all COVID-19 needs even during late nights. In February 2021, Prime Minister Mr. Narendra Modi laid the foundation stones for medical colleges and hospitals in Biswanath and Charaideo. This will boost Assam’s health infrastructure, which will not only benefit the state but also the entire Northeast.
- Tourism: In 2022, 2.05 million tourists arrived in Assam.
