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India generates over 500 million tons of agricultural residue per year, which is both a tremendous amount of unused economic resource and an equally significant environmental liability. This potential can be nowhere else seen as clearly or needlessly urgent as in the eight state Ashta-lakshmi North Eastern Region (NER), including; Assam, Meghalaya, Manipur, Mizoram, Nagaland, Tripura, Arunachal Pradesh and Sikkim. As agricultural economists, we see the application of the circular economy framework to agro-waste in the NER, an ecologically unique and economically marginalised region, as not just a sustainable option, but also as a necessity for inclusive development.
The NER has incredible agro-biodiversity including bamboo, banana, pineapple, ginger, turmeric, cardamom and many other native species and is thus responsible for generating a substantial portion of India’s agro-biological wealth. However, despite this biotic wealth, it is one of India’s most economically backward areas. There exists a very strong structural paradox here: a region whose biological contributions to national wealth create massive volumes of waste at the individual farm level (banana pseudo stems, bamboo cut-offs, crop stubble, fruit skins and post-harvest residue) are simply thrown away, burnt or allowed to rot with no financial return. In terms of wasted resources due to lack of action on this issue; the ICAR Research Complex for NEH estimates that soil degradation alone costs thousands of crores every year along with lost greenhouse gas emission opportunities and lost value created by the foregone wastes.
A circular economy model, designed to eliminate waste and keep materials in circulation and regenerate ecosystems provides a fundamentally sound approach to addressing this paradox. The current policy literature, including the Ellen MacArthur Foundation’s country-specific study on India, suggests that following a path towards circular economy would generate benefits worth more than Rs 40 lakh crore (US $624 billion) in India alone by 2050, in addition to generating about 10 million jobs. What is important for policy makers and the development economist here is that these benefits are unevenly distributed and are concentrated in areas characterised by high biomass density and availability of rural labour. The NER qualifies in both respects. Signs of this are beginning to emerge at present. As a part of the PM-DevINE (Prime Minister’s Development Initiative for Northeast Region) scheme, the Indian government’s Department of Science and Technology has helped establish projects that make use of abundant banana pseudo stem waste from the states of Assam and Tripura and convert it into valuable fiber and bio-fertiliser. Similarly, the Northeast Bamboo Conclave 2025, which took place in Guwahati, reiterated the regional responsibility for managing 46 per cent of India’s bamboo reserves and outlined an approach towards value chain development, wherein residues should not be considered waste but as raw material for manufacture of boards, energy, activated carbon, and bio-char. Another policy initiative, the National Bamboo Mission 2025 provides for generous incentives for the Northeastern states and those that are hilly, offering a 90:10 centre-state subsidy ratio due to the particularities in their infrastructure.
It is at this point when the discussion must move away from efficiency indicators and towards equitable distributional concerns. For an effective implementation of circular economy in the NER to become an engine of inclusive growth, the policy framework needs to guarantee that benefits derived through the valorisation of biomass waste are channeled back to smallholder tribal farmers, women’s self-help groups, and indigenous communities which are the main generators of biomass resources. It is essential to counter the historical trend of capturing rents by value chains, even those which are seemingly green, in the processing and marketing stages and leave the primary producers with meagre profits. Measures involving institutional arrangements like establishing producer-owned farmer organisations (FPOs), having an equity share in agro-waste-based processing units; community biogas cooperative societies; and direct income transfers through biomass harvesting can assist in closing this income gap. While highlighting the commitment to encouraging high-value agriculture produce in Northeastern and hilly areas in the Union Budget for 2026-27, it is imperative that the intent in budgeting is complemented with an implementation framework that embeds circular economy principles in every phase of value chains in the NER.
What is needed is a Circular Agro-Economy Policy (CAEP) framework, which takes cognizance of the agro-ecological and socio-economic peculiarities of the NER. This will involve investing in decentralised processing facilities, biogas plants, vermicomposting facilities, and bio-pellets mills at the cluster level; fostering marketing networks for agro-waste products into local and international green economies; integrating traditional ecological wisdom from native farmers into the process of value addition; and establishing a reliable monitoring system that assesses environmental impact and social equity. The Indian approach to the circular economy is very much alive and gaining momentum. However, for it to be transformative and not technocratic, it needs to be rooted in places such as the NER, where there is plenty of agro-waste, there is resilience, and the journey from waste to wealth is much shorter than we have given ourselves credit for thinking. The hills of the Indian Northeast cannot be on the peripheries of our story; they can, and they must, be at its green frontier.
The authors are from School of Social Sciences, CPGS AS, CAU-Imphal
Views expressed are the authors’ own and don’t necessarily reflect those of Down To Earth