The Digital Lifeline: Does Tripura’s Economic Future Actually Hinge on Digital Connectivity?
Tripura stands at a moment where one question matters more than any other: can digital connectivity become the economic lifeline that the state’s geography has long denied it?
For decades, Tripura’s development trajectory has diverged from the standard model—manufacturing failed to take off, labour could not make the shift out of agriculture, and rural wages stagnated as disguised unemployment deepened. Yet even as these traditional engines stalled, a quieter momentum has been building in the services sector.
With agriculture still accounting for more than 45 per cent of employment and services generating nearly 40 per cent of jobs and output, the imbalance is clear.
What is not yet clear—but increasingly urgent—is whether digital services can become the anchor that manufacturing repeatedly failed to be.
Tripura finds itself at a critical economic juncture once again. Even a growth rate of 8 percent during the last five years has been unsuccessful in transforming the economy into a high value economic hub.
In fact, the state has been facing a systemic puzzle for a long time – which sector has the potential to lift the economy to a self sustaining higher growth trajectory?
This is critical because the traditional focus on logistical bottlenecks has proved to be costly and time consuming. More importantly, recent shifts in policy dialogue as witnessed in the Act East Policy and Indo-Pacific Economic Framework for Prosperity (IPEF) has opened avenues for progress that could prove to be a game changer for this tiny landlocked state.
Here, digital connectivity and high value services appear to be a strong contender as a leading sector in the near future. This naturally sharpens the provocation at the heart of the debate: why cannot the manufacturing jump in now?
The main drags on the manufacturing sector are the deep seated and long standing infrastructural bottlenecks. This has led to logistic volatility and disruption in supply chains. Businesses have to rely on distant suppliers that increase the input cost and erode the competitiveness of Tripura’s manufacturing products.
The main drags on the manufacturing sector are the deep seated and long standing infrastructural bottlenecks. This has led to logistic volatility and disruption in supply chains. Businesses have to rely on distant suppliers that increase the input cost and erode the competitiveness of Tripura’s manufacturing products.
For instance, even in high potential sectors such as rubber, the industrial base is crippled. A tyre unit requires around 70 per cent of non-rubber components such as steel, polyester and chemicals; and the backward linkages in terms of supporting industries are yet to develop here.
Similar ecosystem gaps pull back MSMEs too. Basically, Tripura’s manufacturing sector is a long term project that requires a far more sustained and hard fix.
On the contrary, rapid growth of digital services and tourism appears within reach in the near future. This sector would require a soft fix in the form of higher investment in human capital.
On the contrary, rapid growth of digital services and tourism appears within reach in the near future. This sector would require a soft fix in the form of higher investment in human capital.
The goal here is to leverage the geopolitical advantage. In fact, digital connectivity and digital services may be the answer to the historical disadvantage of physical isolation imposed by the partition of the country upon Independence.
Indeed, Tripura is in a unique position by way of a direct connection to the international internet backbone, providing high speed broadband of 10 Gbps through Bangladesh.
Tripura is the 1st state in the Northeast and the 8th state in India to sign a MoU with Bhashini (Bhasha Interface for India) that provides digital access in 22 regional languages to bridge the digital divide based on language.
This provides the basis for universalisation of both access and use of digital services in the state. The Ministry of Electronics and Information (MeitY) has identified Tripura as having the potential to become the IT and Data Hub for the entire Northeast.
Tripura is poised to gain a competitive advantage here as along with adequate water supply for cooling these huge systems, international funding agencies such as Asian Development Bank has loaned Rs. 975 crores for infrastructural upgradation in Tripura, key components of which are improvements in power generation and distribution.
IT/ITeS Policy 2022 and Tripura Data Centre Policy 2022 are reflective of the commitment of the state towards development of a digital ecosystem that strengthens e-governance and encourages IT companies.
These policies prepare Tripura to leverage opportunities created by IPEF, especially in service-sector modernization and cross-border digital commerce. Early signs of synergy between these policy instruments are already visible. What is required is a sustained, unwavering push on these policies with corrections (if any) to attain the goal of transforming Tripura into digital Tripura.
Former Estonian President Toomas Hendrik Ilves said that Estonia achieved the status of e-Estonia where even wealthier countries failed, just from a lack of political will.
Tripura Cyber Security Policy, 2025 and dedicated IT investments are living proofs of this political commitment.
Tripura’s dream of becoming a “Digital Gateway” will stand or collapse on one thing: whether people actually trust the system. The infrastructures exists—secure digital signatures and the legal spine laid by the IT Act, 2000—but trust will come only when every citizen believes their data is safe and every transaction is tamper-proof.
That requires abandoning the outdated idea of centralized data storage and adopting a federated system where information moves without piling up in one hackable vault.
Estonia did it with X-Road—and built a digital state out of political will. Tripura has one unexpected advantage: its small size. The constraint that shrinks its market could be the very catalyst that lets it leapfrog the rest of India.
Tripura now needs a strategic focus on digital connectivity that will transform its economy into a high value digital hub for the Northeast. In fact, the entire services sector, especially digital services and digitally empowered tourism emerge as the most capital-efficient driver of growth.
Tripura now needs a strategic focus on digital connectivity that will transform its economy into a high value digital hub for the Northeast. In fact, the entire services sector, especially digital services and digitally empowered tourism emerge as the most capital-efficient driver of growth.
Attempting to compete with mainland India on manufacturing costs requires longer time horizon. In the short to medium term, focus has to shift sharply towards closing the “large skill gap” to provide the workforce needed for data centers and IT enterprises that international digital connection can and will achieve.
*Anindita Sinha teaches Economics at Tripura Government Law College and can be reached at asin.economics@gmail.com