[ Badak Yomgam ]

Across the Northeast, the economic protection of indigenous tribes is shifting from passive administrative guidelines to active commercial safeguards. The Karbi Anglong Autonomous Council's recent measures in Assam, auditing trade no-objection certificates to prevent proxy commercial operations, highlight a persistent regional issue: local trading privileges meant for indigenous populations are frequently exploited to bypass regional regulations.

In Arunachal Pradesh, trade regulations under the Department of Trade and Commerce currently mandate a 51:49 participation ratio for joint partnership firms involving non-APST partners. While this grants local partners a nominal majority on paper, it leaves indigenous businesses vulnerable to operational manipulation.

Transitioning to a strict 70 to 30 ratio is an essential economic policy shift required to protect local entrepreneurs, close legal loopholes, and build genuine indigenous capital.

The illusion of 51 percent control

Under company and partnership laws, a 51 percent stake provides a simple voting majority, but it lacks the statutory weight needed for full structural control. Critical business decisions, such as issuing new equity, altering partnership deeds, taking on major debt, or liquidating assets, typically require a supermajority of 75 percent under standard corporate frameworks.

In practice, the 51:49 rule has fostered widespread proxy or benami commercial arrangements across commercial hubs like Itanagar. Non-APST partners often fund the entirety of the initial capital outlay while assigning a nominal 51 percent stake to an indigenous partner who acts merely as a silent signature provider. Because the local partner lacks a true supermajority, effective managerial, operational and banking control frequently remains entirely with the non-local entity. Consequently, profits generated within local markets are routinely funnelled out of the state through off-the-books accounting, weakening the local tax base and banking ecosystem.

Retaining capital in import dependent markets

This structural vulnerability is further magnified by Arunachal Pradesh' heavy import dependency. Because almost all manufactured goods, processed foods, construction materials, and consumer products are sourced directly from outside the state without local production bases, retail and wholesale trade serve as the primary engines of private wealth generation.

When these commercial activities operate under proxy control, local markets act merely as pass-through entities, accelerating capital flight and leaving the local economy reliant on external financial flows.

Upgrading to a 70:30 mandate alters this dynamic completely. Holding a 70 percent stake grants indigenous entrepreneurs significant operational and legal leverage over the enterprise, making proxy control financially unviable and structurally unappealing for predatory capital.

Empowering local entrepreneurship

Mandating a 70 percent controlling stake is an active empowerment strategy for local trade communities. When indigenous entrepreneurs possess a 70 percent stake, they gain the statutory clout required to negotiate financial terms, decide investment directions, and direct capital deployment without being overridden by minor investors. A guaranteed 70 percent profit sharing mandate ensures that wealth generated within Arunachal is directly reinvested into local bank accounts, property, and secondarybusinesses, driving long-term wealth creation.

Furthermore, requiring local business owners to hold primary bank signatures and board authority ensures that local management talent is developed firsthand,rather than outsourced to proxy operators.

Regional governance and the enforcement roadmap

Arunachal's trade framework must be evaluated alongside neighbouring hill states that enforce strict tribal commercial protections through distinct legal mechanisms. In Nagaland, commercial protection is deeply rooted in Article 371A of the Constitution, which guarantees indigenous dominance over land and resources. In Meghalaya, non-tribal business activity is strictly policed by autonomous district councils operating under the Sixth Schedule through specific trading licenses. Unlike Meghalaya or Nagaland, Arunachal relies primarily on executive trade rules enforced by local deputy commissioners. Adopting a 70:30 ratio gives Arunachal a clear statutory mechanism to enforce indigenous economic self determination without sacrificing necessary external technical or financial collaboration.

Implementing a 70:30 mandate does not mean closing Arunachal's borders to outside expertise or investment, but rather setting clear terms for equitable economic partnerships. To ensure swift and effective implementation, the state government should grant existing joint ventures a firm 90-day window to restructure their partnership deeds, reallocate equity, and update trade filings.

Alongside tight compliance, state backed financial schemes must be expanded to help local entrepreneurs raise their equity contribution without relying on external non-APST backing. Finally, district task forces under the deputy commissioners must audit joint venture bank accounts and ownership records annually to confirm that 70 percent of actual net profits are disbursed directly to the APST partner. Shifting to a 70:30 standard will eliminate proxy fronting, nurture a self-sustaining indigenous business class, and keep local wealth working for the state's future.

Author's note: The author is not an economist by training. The arguments and policy suggestions presented in this article are rooted purely in direct observation of local commercial dynamics, with the sole objective of safeguarding the rights and economic wellbeing of local stakeholders. (The contributor is an independent researcher.)