A year on, shortage and spiralling prices hurt businesses in Manipur

Ban on free movement with Myanmar cuts major route for Chinese electronics.

Imphal/Churachandpur/Moreh: India’s economic heft is being celebrated by its allies and is also considered to be a factor in the ongoing Lok Sabha elections. However, nearly a year after large-scale violence began in Manipur, India’s growth story has left the state behind.

Marred by rising supply chain costs, exorbitant checkpoint fees and widespread extortion by various local factions, prices of everyday essentials — ranging from fuel, vegetables, meat, clothing, and even electronics — have nearly tripled in Manipur since the ethnic violence engulfed the state in May 2023.

Additionally, the ban by the central government on the Free Movement Regime (FMR), which was introduced to facilitate local border trade, has forced business owners to source goods from distant states, subjecting them to increased operational costs.

“Livestock and basic commodities like onions, which used to come from Myanmar, now cost much more due to high transportation charges from other Indian states,” Zoheb Khan, who runs a biryani shop in state capital Imphal’s Paona Bazar, said.

The FMR, part of India’s Act East policy initiated in 2018, previously allowed the movement of goods and people up to 16 km across the Myanmar border without a visa, promoting local trade and improving access to essential services.

Many shops in Moreh exclusively sold only electronic goods coming from Myanmar, which are now running at a loss.

“This was one of the main trade routes for Chinese goods sold on e-commerce websites like Flipkart and Amazon. While the products are available at a massive discount online, these goods were available at an even higher discount in shops in Moreh. With the supply being cut, the prices of electronics items have shot up,” one of the shopkeepers told DH.

Senior government officials in the state confirmed that products from Myanmar, including Southeast Asian electronics, were previously sold widely in the state.

Crippling fuel shortage

In Churachandpur, the state’s second-largest city, fuel is being sold in bottles in standalone shops and grocery stores as the supply route from Imphal is blocked.

The district’s Deputy Commissioner Dharun Kumar S told DH, “Oil companies like Indian Oil have stopped risking sending fuel on this route as tankers are looted by various tribes on the way to Churachandpur. The drivers also face a risk of assault. Only two out of seven petrol pumps operate for four hours per day in the district. Most of the fuel supply is done via Aizawl in Mizoram, about 330 km from Churachandpur.”

The petrol rates in Churachandpur range from Rs 110/litre to Rs 150/litre.

The strife extends beyond logistics. DH spoke to several small business owners in Imphal’s Ima Market, who claimed that as goods pass through the hills bordering Nagaland and Assam, they encounter various checkpoints on their way to the Imphal Valley, where exorbitant fees are often imposed by various armed groups to allow trucks to proceed, inflating the prices further.

These unofficial fees, to the tune of Rs 20,000-25,000, significantly impact the affordability and availability of products, especially food essentials, resulting in three times their normal rates elsewhere in India. Senior police officials at Imphal Police headquarters declined to comment when asked what they were doing to curb extortion by various militia.

Local militia’s influence

Arambai Tenggol, a militia group belonging to the Meitei community, exert a chilling influence on commerce in the state, particularly targeting non-local business owners. Shopkeepers from Bihar, for instance, claimed extortion demands reaching up to Rs 35,000 under the guise of “welfare money” for relief camps. Non-compliance, they fear, could lead to violent repercussions such as arson.

The overall economy of the state has seen a slowdown ever since the ethnic clashes commenced last year. Local vendors in both Hill and Valley claim their business is down by over 50% due to reduced footfall of tourists.

In the heart of Imphal, the eve of ‘Cheiraoba’ — the New Year celebration for the Sanamahi Meiteis — would typically see the Ima Market teeming with customers. This unique marketplace is run exclusively by women.

This year, however, the crowd was merely one-quarter of its usual size. The Cheiraoba New Year was overshadowed by the harsh realities of the conflict affecting both the Kuki and Meitei communities.

However, despite the looming threats and financial strain, some sectors find a way to thrive. With major brands, like Nykaa, temporarily halting deliveries due to the ethnic conflict, local cosmetic shops have seen a surge in business. “With less accessibility to discounted online products and brands, locals are turning to our stores, providing an unexpected boost amid these challenging times,” Tayal, a cosmetics vendor in Ima Market, said.

Senior government officials in the state secretariat DH spoke to said, “The government is taking steps to improve business prospects in the region,” however, they did not elaborate on what these steps are.

(With inputs from Shakshi Jain, DHNS)