Oil, sovereignty and new fault lines of development in Nagaland

For decades, India’s Northeast has existed at the intersection of militarisation, unresolved political questions and the promise of immense natural wealth lying beneath its hills and forests. On June 11, 2026, the Union government sought to reshape that landscape through two significant announcements.

Union home minister Amit Shah facilitated a tripartite Memorandum of Understanding (MoU) between the Centre and the governments of Assam and Nagaland aimed at facilitating mineral oil operations, including the exploration and production of crude oil and natural gas, along the long-contested border. 

At the same time, New Delhi outlined plans for a substantial rollback of the Armed Forces (Special Powers) Act (AFSPA) from much of the Northeast by next year.

The announcements appear to signal a new phase in the region’s history, perhaps one in which economic development and demilitarisation might move hand in hand. Official discussions surrounding the agreement have emphasised the transformative potential of resource extraction, projecting dramatic increases in oil output and describing the initiative as an opportunity to generate employment, infrastructure and economic growth in a region that continues to lag behind national development indicators.

However, behind talks on cooperation and prosperity, debates surrounding the MoU have exposed longstanding anxieties regarding sovereignty, representation, constitutional protections and ownership of resources. More importantly illustrating one of the most troubling dimensions of resource politics.

Public discourse surrounding the Assam-Nagaland MoU has increasingly been framed through rigid binaries. Supporters portray the agreement as an overdue step towards economic self-sufficiency, often dismissing critics as being opposed to development itself. On the other hand, the Working Committee of the Naga National Political Groups (WC, NNPGs) has argued that any form of resource extraction undertaken before a comprehensive Indo-Naga political settlement would constitute a violation of indigenous rights and political understandings.

Within Nagaland itself, many elected representatives and public figures have advocated for the early resumption of petroleum exploration, arguing that prolonged delays could result in “missed economic opportunities” in an evolving energy landscape.

Many Nagas on social media expressed hesitation about the venture, arguing that the community could be taken advantage of. Some also noted that a large section of the population had little awareness of how these extractive projects function, given that the region has not historically been an industrial economy but has instead relied largely on agriculture and related sectors. Many Naga youths suggested that this lack of familiarity could make it easier for revenues to be “diverted elsewhere.”

Conventional thinking assumes that having plenty of natural resources automatically leads to prosperity, but research has shown that this isn’t really true. What matters more is how those resources are managed and who controls them.

In places with political tensions in the Northeast, resource projects can quickly become tied to deeper issues such as land ownership, political representation, and local self-determination. In such contexts, extraction is rarely just an economic activity, because it often operates within overlapping formal and informal systems of power, where regulation is uneven and enforcement can be inconsistent. Contemporary research on organised crime linked to non-renewable resource sectors shows that illicit extraction is not typically isolated or random, but structured through coordinated networks that connect production sites to transport chains, documentation processes, and market channels.

These arrangements allow resources to move across legal and illegal boundaries while still entering broader supply systems.

As a result, resource governance becomes less about the mere presence of wealth in the ground and more about who controls these networks, how benefits are distributed, and whose authority ultimately determines access.

If communities perceive that decisions are being made without meaningful participation or that the benefits of extraction are flowing elsewhere while environmental and social costs remain local, these projects can deepen existing divisions instead of fostering cooperation.

In the Northeast, experiences from a resource-rich region have highlighted the importance of transparency, accountability and meaningful public participation in decisions involving natural resources. In Digboi, home to Asia’s oldest operating oil refinery, residents have periodically raised concerns over inadequate civic infrastructure and the disconnect between the region’s contribution to the national economy and local standards of living. More recently, villagers protested after an oil spill reportedly damaged agricultural land, affecting livelihoods and reigniting debates over accountability, compensation, and environmental safeguards. Elsewhere, proposed hydrocarbon exploration activities in the ecologically sensitive Dehing Patkai region drew opposition from conservationists and local communities worried about the long-term implications for biodiversity and traditional ways of life. 

Investigative reporting has also documented how tribal communities in parts of Assam experienced the loss of land and forests to extractive projects, fuelling anxieties about dispossession and exclusion from decision-making processes.

These examples do not suggest that development and extraction are inherently incompatible. Rather, they illustrate a recurring challenge observed in resource-rich regions across the world.

The lesson is not that resources inevitably produce conflict, but that without transparency, meaningful consultation and equitable benefit-sharing, they can expose and intensify existing fault lines within society.

Those supporting immediate extraction may be labelled as opportunistic or insufficiently committed to collective aspirations, while those seeking safeguards and political clarity may be dismissed as obstructionist.

The challenge is not the existence of disagreement itself but in creating transparent institutions capable of accommodating these differences without allowing them to deteriorate into lasting social fractures.

Policymakers must also consider not only the potential benefits of extraction today, but also whether projects carrying substantial social and environmental consequences align with long-term development priorities.

It may be noted here that recent Geological Survey of India (GSI) publications have also characterised the region as increasingly important to India’s mineral security objectives, highlighting the potential for critical minerals including nickel, cobalt and chromium in Nagaland alongside rare earth elements elsewhere in the region. The institutional dimensions of these debates are particularly important in Nagaland, where questions of sovereignty and constitutional protection still continue to shape public life.

Politics of extraction in the Northeast has never been solely about the resources beneath the ground. As anthropologist Dolly Kikon argues, struggles over oil and coal simultaneously become struggles over authority, legitimacy and representation. Competing actors including state institutions, separatist organisations, tribal bodies, corporations, and local communities seek to define who has the right to speak on behalf of the people and who possesses the authority to negotiate the region’s future.

Resource politics possess the capacity not only to generate tensions between communities and the state but also to create fractures within communities themselves. These divisions often outlast the lifespan of any single project, leaving behind legacies of mistrust that are far more difficult to repair than environmental damage alone.

Meanwhile, the convergence of demilitarisation initiatives with major extraction projects has prompted concerns among sections of civil society regarding the sequencing of these developments. 

If Nagaland is to avoid the kinds of tensions that have accompanied extractive projects elsewhere, development cannot be pursued solely through top-down arrangements.

Meaningful consultations must become an integral component of resource governance rather than a procedural afterthought. Mechanisms ensuring transparent and equitable distribution of revenues are equally essential if extraction is to generate broad-based legitimacy.

For many Naga communities, the forests and hills are closely tied to identity and everyday livelihood. Hence, decisions regarding their future demand more than administrative efficiency.

Tsüngrochetla Walling is an Ao Naga journalist whose work focuses on indigenous peoples, political conflict and the experiences of communities in the Northeast, particularly Nagaland. She is the author of All That is Home and is currently writing her second book, The Last Morung.

Views expressed are that of the author and do not reflect EastMojo’s stance on this or any other issue.

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