India’s North East Region (NER) has been acknowledged as the ‘Eastern Gateway’. Enigmatic and beautiful, the North-East has always held allure for travelers known for its natural beauty and magnificence. The seven states that make up the northeast, collectively called the ‘Seven Sisters’ have 200,000 micro, small and medium enterprises (MSMEs), according to a report by the International Finance Corporation.
There is now a demand for private equity and venture capital investment, the first notable investment by a venture capital fund in the region came last year.
Padmaja Ruparel, President, Indian Angel Network (IAN) says,
“The region has remained disconnected from the rest of the country in many aspects for a number of years,”
The region didn’t see a real focus towards the entrepreneurial activities thus far but the times are changing today. There has been emergence of few of the startups which are positive signs.
Arohan Foods – Omnivore-Capital has backed Guwahati-based pork-packaging company, while the Indian Angel Network is scouting for deals in the region by taking up a mentorship and nurturing role in Kolkata, North East and surrounding areas.
“Three years back, there were hardly any startup entrepreneurs to meet there. Now, when I go to Kolkata, I meet a number of new entrepreneurs from the region,” said Padmaja Ruparel. She adds “We are, however, looking at investing in start-ups in the region this year,”
Tamul Plates – It’s a producer of palm leaf tableware, had raised an undisclosed amount of follow-on investment from Upaya Social Ventures and Artha Initiative to augment its operations across the North-eastern region.
Audrey Selian, Artha Initiative’s director said,
“It has been a highlight of the Artha Venture Challenge to uncover a pioneering and innovative enterprise in Tamul Plates,”
Barpeta-based Tamul Plates is the only established producer of disposable tableware in the Northeast – a region with more than 100,000 hectares of arecanut under plantation.
Elrhino – The firm that makes luxury handmade paper products out of elephant and rhino poop, and Tamul Plates, which makes biodegradable disposable arecanut leaf plates, are among a rising number of startups increasingly attracting venture capitalists’ attention to the north-eastern region.
Giskaa – An online marketplace exclusively for North East products, Meghanath Singh came up with this idea to make North-Eastern products more accessible.
“Although, I have been living outside of Manipur for the past 23 years, I’ve always yearned to contribute something to my home state and the North-East,”
According to Meghanath there is a big opportunity for North-East India as a major production area, and a burgeoning centre, for high quality eco-friendly products.
Challenges holding the region back
Poor infrastructure: In spite of immense potential in North East, the region has largely remained underdeveloped. And, a key constraint to the growth has been poor infrastructure and limited connectivity.
Lack of marketing skills: Marketing continues to be a challenge for SMEs, since they are unable to sell their products and services. Entrepreneurs need to go beyond the local and state markets and compete with global brands.
Lack of entrepreneurial zeal: According to Kokeela Mazumdar, CEO, Rhino One “Innovative initiatives are less in the region as compared to the other parts of India. We have a long way to go especially when it is comes to spreading awareness among youth about entrepreneurship, utilising their own resources and building up products that can be offered to outside regions. There should be schemes and events to promote local businesses and products,”
Unemployment – Lack of skilled manpower is holding the region back. Assam has around 2.2 million unemployed youth.
Lack of funding – According to Mazumdar “Most of the financial help comes from personal savings and the funds raised from friends and family. One needs a good track record to get leverage of financial institutions, which is unfortunately not the case with young entrepreneurs. Venture capitalists are rare to find as they don’t look for ventures here,”
Dr JS Juneja, Chairman, SME Committee Task Force & Chairman, Global Projects & Services Pvt Ltd says,
“SMEs have come a long way in this region and today they are blooming in North East. Many young people are setting up their businesses in North East. New opportunities along with the increased purchasing power and consumerism will now drive the growth story,”
Institutes likes Indian Institute of Entrepreneurship (IIE) undertake training, research and consultancy activities on entrepreneurship development.
We see a better prospect for future as things will change for good.