US$780m NE natural gas pipeline grid launched

The Centre announced that it would provide US$780 million for the construction of the North East Gas Grid project across Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura

January 8, 2020

The CCEA approved the North East Gas Grid project with viability gap funding at 60 per cent of the estimated cost of US$1.3 billion

The project supply natural gas to various types of consumers, including industries, domestic users (PNG), and transport (CNG)

The 1,656 km gas pipeline project is expected to improve future geo-economics in northeast India while offering a better quality of life

Government of India has been increasing its focus on the North East, especially since it is at the heart of India’s “Act East” policy

On January 8, 2020, the Government of India announced that it would provide US$780 million for the construction of the North East Gas Grid project that would serve the eight northeastern states – Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.

The Cabinet Committee on Economic Affairs (CCEA) approved the North East Gas Grid project of Indradhanush Gas Grid Ltd with viability gap funding at 60 per cent of the estimated cost of US$1.3 billion. Indradhanush Gas Grid is a joint venture of state-run Indian Oil Corporation Ltd, Oil and Natural Gas Corporation, GAIL (India) Ltd, Oil India Ltd, and Numaligarh Refinery Ltd.

An official statement stated that the capital grant would provide natural gas supplies to various types of consumers, including industries, domestic users (PNG), and transport (CNG), helping to substitute liquid fuels. The 1,656 km gas pipeline project is also expected to help improve future geo-economics in northeast India, thereby developing the industrial climate without impacting the environment. At the same time, it will offer a better quality of life to the people there.

The Indian Government has been increasing its focus on the states in the northeast, not only to boost economic growth but also because it is at the heart of India’s “Act East” policy, being the gateway to several ASEAN countries. At the forefront of these efforts are infrastructure projects, with an investment of about US$30 billion in the road, railway, and aviation sectors. Steps are also afoot to provide 100 percent teledensity by 2020 through BharatNet, involving an investment of US$2 billion. 

Likewise, for industrial development, the central government has provided US$2.5 billion under the North East Industrial Development Scheme. Above all, the Ministry of Development of the North East Region (DONER) has been constituted to oversee these.

Steps are being taken to ensure that trade between the ASEAN countries and India reaches the targeted figure of US$100 billion. Not surprising, then, that the North East is being geared to play the arrowhead role in this regard, with a focus on improving connectivity through land, sea, and air, as this would cut down the cost of goods and movement.

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