Manipur’s Cross-Border Trade Grinds to a Halt Amid Rising Costs and Disruptions
Guwahati: As Manipur's ethnic unrest enters its second year, the state's economic collapse is becoming increasingly evident, adding to the mounting humanitarian crisis. In an exclusive interview with Business North East (BNE), Langpoklakpam Lakhikanta Singh, co-founder and director of LB Health Fitness Pvt. Ltd., highlights the devastating toll of the conflict. Over 2,000 tribal entrepreneurs have been displaced, cross-border trade with Myanmar has ground to a halt, and local industries remain at a standstill. Singh, an entrepreneur from Imphal, calls for central intervention, stating to BNE, the gravity of what is now unfolding as an economic emergency.
A State in Economic Shock: Collapsing Pillars of Growth:
Nearly a year since ethnic violence erupted in May 2023 between the Meitei and Kuki-Zo communities, Manipur's economy has slipped into contraction. Once projected to grow at 4.5–5 per cent, the state's Gross State Domestic Product (GSDP) has instead shrunk by an estimated 1–2%, according to North East Council reports and local economist data. This translates into a direct economic loss of Rs 1,200–Rs 1,500 crore over 12 months, as per the Manipur Planning Department. Employment generation has nosedived by over 25 per cent year-on-year.
Sectoral Breakdown of Economic Disruptions:
Accounting for nearly 22 per cent of the state’s economy, agriculture is paralysed. Pre-crisis, agriculture employed over 52 per cent of the state's working population. Post-crisis, output in hill districts has dropped by 40 per cent. With arterial routes such as NH-102 (Moreh) and NH-37 (Imphal-Jiribam) under frequent blockades, farmers in Kuki-dominated regions have been unable to transport produce. According to the Manipur Farmers' Association, perishable goods worth Rs 20– Rs 25 crore have been lost due to supply chain paralysis. A 35 per cent drop in agricultural output has been recorded in hill districts.
Government and private infrastructure projects worth over Rs 1,000 crore have stalled, with 60% of workers either displaced or unwilling to work due to security fears, according to the Manipur Contractors' Association. steel prices have risen by 20 per cent, making construction financially unviable.
According to the All Manipur Entrepreneurs Association, about 30–35 per cent of SMES have closed permanently. This includes over 1,000 retail outlets in Imphal, Churachandpur, and Kangpokpi.
Once generating Rs 50 crore annually, the tourism sector has shrunk to under ₹9.8 crore (FY2024), according to Manipur Tourism Department figures. Hotel occupancy has plummeted to 10 per cent. The footfall of both domestic and international tourists has reduced by over 90 per cent.
Price Surge: A Crisis for Every Household:
The ethnic violence has triggered a dramatic rise in the prices of essential commodities. Supply chain disruptions, particularly in the transportation sector, have sent prices soaring across the state. According to the All-Manipur Traders' Union, essential goods are now sold at a 25–30 per cent premium compared to pre-violence levels. The prices of key vegetables like tomatoes, onions, and potatoes have surged by over 40%. Tomato prices rose from Rs 20 to Rs 28/kg (+40 per cent), onions from ₹25 to ₹38/kg. Rice spiked from Rs 35 to Rs 45/kg; lentils up 25%. Diesel jumped from Rs 86 to Rs 91/litre; petrol from Rs 96 to Rs 99/litre. Prices of items like pulses and edible oils have increased by 25–30 per cent, further straining household budgets.14.2 kg LPG cylinders have surged to Rs 1,250–Rs 1,350 in rural areas.
Education and Healthcare Crumble:
The violence has had a severe impact on education and healthcare, two critical sectors in Manipur’s socio-economic fabric. Over 35 schools have permanently closed; 80% of educational institutions in Kuki-majority zones remain shut. Over 10,000 students have dropped out of school since May 2023, with dropout rates exceeding 25 per cent in conflict zones, according to the Student Relief Coordination Committee (SRCC).
Around 15–20 health centres in hill areas are non-operational, according to the Manipur Health Services Department. In the valley, hospitals like RIMS and JNIMS report a 30 per cent staff shortage, severely affecting service delivery.
Foreign Trade Grinds to a Halt:
Manipur, which has traditionally been a hub for agricultural exports, is now witnessing a sharp decline in its export and import activities. The state’s export-import trade has taken a severe hit. According to the sources, the Rs 300-crore Indo-Myanmar trade via Moreh-Tamu has been halted since May 2023. Agro and handicraft exports are down 15–20 per cent, while pharma and fuel imports via Myanmar have dropped 50 per cent, now rerouted through Assam, raising costs. Imports through NH 39 and NH 53 have slightly risen, with fuel imports up 10% due to local shortages.
According to reports and various sources, “Trade at the Integrated Check Post (ICP) in Moreh, which handled ₹100 crore worth of goods annually, has come to a complete halt.”
Businesses Gasping for Air:
The economic fallout from the unrest has led to widespread business closures, particularly among small and medium-sized enterprises (SMES). According to MCCI data, 2,000+ entrepreneurs, primarily tribal, have fled conflict zones, losing property and market access, while 30 per cent of local businesses have halted operations. Tourism has also collapsed—revenue plunged from Rs 50 crore to Rs 10 crore, and the annual Sangai Festival was cancelled for the second year, wiping out Rs 10–Rs 12 crore in potential earnings.
Transport & Connectivity in Shambles:
Violence in Manipur has severely disrupted transportation and logistics, crippling the state's economy. Frequent blockades on NH-37 and NH-102—over 300 in a year—and the NH-47 shutdown have stalled goods movement. The Jiribam-Imphal rail project is 18 months behind schedule, while freight services between Jiribam and Dimapur have been cut by 50 per cent due to security concerns.
The Human Cost: Displacement and Aid Delays:
The ethnic violence in Manipur has displaced over 67,000 people—the highest conflict-induced displacement in India since 2018. Spread across 100+ relief camps, many face severe shortages of food, water, and medicine. Though Rs 500 crore was sanctioned under PM-Devine with a Rs 1,000 monthly aid per family, NGOS report that over 60% of families haven’t received regular support.
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“Manipur’s economy is in shambles,” Singh told BNE during the interview. “The riots have disrupted supply chains, pushed unemployment and drug abuse to alarming levels, and hit the hills hardest, from education to healthcare.”
Singh, whose company operates in Manipur, Assam, and Delhi, highlighted the stark regional disparity. “Businesses in the valley are struggling, but in the hills, where 70 per cent are from the Kuki community, people are completely cut off. With 90% of essential services concentrated in the valley, the economic divide is dangerously widening.”
While the government has announced financial aid and housing for displaced families, Singh believes these steps fall far short. He calls for a Rs 1,000 crore Manipur Rehabilitation Fund to rebuild infrastructure, support small businesses, restore education, and deploy mobile health units in remote areas.
Singh also stressed the need for Peace Industrial Zones, revival of tourism through safety-driven campaigns, and special schemes tailored to Manipur’s unique crisis. “The Centre must act now. Without peace and economic revival, rebuilding will take decades,” he warned.
He concluded, “A special economic package focused on infrastructure, healthcare, and livelihoods is essential. People in both the hills and the valley deserve equal access to recovery. The Centre cannot wait. If peace and economy both collapse, rebuilding will take decades.”
Rebuilding Beyond the Riots:
Manipur is not just battling a humanitarian emergency—its economy is on the brink of collapse. Businesses are shuttered, jobs have vanished, and essential services are crumbling. Yet, the silence around this economic fallout has been deafening. Manipur’s economic crisis is no longer a side effect—it is a catastrophe demanding urgent national attention. With critical sectors dismantled and public trust eroding, the state stands at a tipping point. Business leaders like Singh are voicing what many fear: without a roadmap to peace and recovery, Manipur risks being left decades behind in India’s growth story. What Manipur needs now is an economic lifeline—rooted in equity, decentralisation, and healing. Because until the economy breathes again, real peace will remain out of reach.
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