Manipur’s ethnic conflict, which erupted in early May, hasn’t ended. The conflict has had a deep impact on businesses, with many having to take loans to sustain their livelihoods. The State’s economy is estimated to have grown 8.53 per cent (FY23 revised estimates vs actuals of FY22).

“I am not sure, I want to stay in Manipur in the middle of this conflict,” says Sam (name changed) from Imphal, who is in the construction business, “I have to figure it out.”

The conflict stems from the call to include the Meitei community, which makes up 53 per cent of the State’s population, in the Scheduled Tribes (ST) list.

businessline spoke to businessmen from Manipur to get an understanding of the situation on the ground.

Partial ban on Internet

In July, the State government allowed resumption of broadband services on the condition that only static IP addresses can be used, while mobile Internet, social media sites, and virtual private network services would stay suspended.

“I have a few broadband connections, which makes it easier for me to do work,” says Henry Gangte, a dealer for Royal Enfield motorcycles in Churachandpur district of Manipur.

Read: Internet shutdown: Manipur’s struggle with internet blackouts 

However, it is a struggle for those who rely on mobile Internet. Babusiwar, a teacher from Thoubal district, was a trader before the conflict began. “I was an active trader, aided by an Internet connection. It has totally stopped now.”

Ever since trading became impossible, Babusiwar has faced financial difficulties, making it challenging for him to cover his children’s school fees and other expenses.

Taking loans

With finances in a state of flux, people are taking loans to meet their needs.

Banks in Manipur have received instructions to prolong the moratorium period for servicing loans by up to 12 months from the date when rehabilitation or restructuring measures were put into effect.

This extension applies specifically to retail loans, including personal, pension, vehicle, and housing loans.

Mangkholen Gangte, who operates a showroom, a service centre, and a café in Churachandpur district, has taken a bank loan of ₹40 lakh.

Read: Internet ban exacerbates Manipur’s problems: Businesses struggle, education disrupted

“The credit score of people from Manipur will be the worst in the near future,” says Mangkholen.

“I have taken an asset-backed loan from the bank. Apart from that, I have personal and vehicle loans,” says Sam, whose business has plummeted ten-fold since the conflict started.

Given huge investments in his warehouse and staff who are dependent on him, exiting the business would be difficult, feels Sam.

Some, like Heigrujam Roger, a dealer for Varun Beverages, is not taking loans from banks because of the documentation and security involved. “I’ve borrowed from Varun Beverages (VBL) to purchase Pepsi stocks only, and we must repay it within 30 days,” says Roger.

Businesses doing better

However, the situation is not as dire as it was earlier

“While the situation is grim, businesses are doing better than earlier,” says Mangkholen. The reopening of shops has boosted businesses, he adds.

The Indigenous Tribal Leaders’ Forum (ITLF) spokesperson Ginza Vualzong said, “Earlier, there were total shutdowns in the town (Churachandpur) due to the crisis.”

“Considering the economy, we allow shops to open three times a week. Recently, we decided to close just one day a week (Wednesday) to help improve the economy,” he adds.

Mangkholen established a Honda Motors dealership with an investment of ₹2 crore in December. “Since the problem started in May, for me, it’s a full loss,” he adds.

Mangkholen is trying to find an alternative way to increase his income.

“With shops opening, I have decided to take at least 75 per cent rent from the shop owners,” he adds. Mangkholen provides rental places to shop owners in Churachandpur.

As Sam’s business continues to accumulate losses, he’s exploring alternative sources of income, such as undertaking home repairs and crafting furniture using locally available materials. “That’s how I’m trying to survive,” he adds.

Blockade on highways

There has reportedly been a blockade on highways, including the Imphal-Dimapur National Highway (NH-2).

“Ninety per cent of the materials in my business are traded from Guwahati, Kolkata, and other parts of South India, which has now stopped,” says Sam.

Kangpokpi is the area where the blockade is happening, he adds.

Discussing the blockade’s severe impact, Roger says before the conflict, it took 3-4 days to receive business supplies, but now, due to the closure of the Imphal-Dimapur National Highway, it takes 10 days.

However, there is a difference in perception. Henry says, “What we heard is that there is no blockade. People are too scared to pass through the Kangpokpi area, so they are taking another route.”

Demand for MGNREGA continues

With several people losing jobs, many are dependent on relief received from NGOs and the government.

To boost the economy, the government should prioritise MGNREGA, according to Mangkholen.

MGNREGA is a scheme that provides “at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.”

Will peace return?

This conflict will last for at least 2 or 3 generations, according to Roger. “At some point in time, it has got to stop. When it is going to stop, I am not sure,” says Henry.

Vualzong believes that once a political solution is found, peace will return. There is no official data indicating the loss that businesses have suffered due to the ongoing conflict in Manipur. The Retailers’ Association of India refused to comment on the matter.