The Path Ahead

For decades, Nagaland’s oil and natural gas reserves described as “natural wealth” continue to remain untapped. Political uncertainty, historical grievances, and an unfinished peace process have kept these resources locked away. The issue returned to the national spotlight after the June 11, 2026 tripartite Memorandum of Understanding between the Centre, Assam, and the Government of India for hydrocarbon exploration in the Disputed Area Belt. This belt, covering more than 1,000 square kilometres, contains eight producing oil and gas fields- Geleki, Khoraghat, Nambar, Kasomarigaon, Suphyam, Dayalpur, Borholla, and Mekrang. These fields are part of the larger Assam-Arakan Basin and Naga-Schuppen Belts, where crude oil is already being extracted. The economic case for exploration is strong. Official estimates suggest Nagaland holds more than 600 million tonnes of oil and gas reserves, mostly in the Naga-Schuppen Belt. Successful exploration could transform the state’s economy by creating jobs, improving infrastructure, and boosting revenues. Yet progress has been stalled since the 1990s due to local opposition and political hurdles. At the centre of the debate are two opposing views. One argues that Nagaland urgently needs development, new revenue, and investment to overcome industrial backwardness and dependence on central assistance. The other insists that no resource extraction should occur until a final Indo-Naga political settlement is reached, seeing natural resources as inseparable from the larger political question. This deadlock has lasted nearly three decades. Development has been repeatedly postponed in anticipation of a political solution that remains elusive. The delay has imposed heavy economic costs. The Nagaland government estimates it loses more than Rs. 1,825 crore annually in oil royalties because exploration has not advanced. This loss deepens dependence on central grants. Meanwhile, India imports nearly 90 percent of its crude oil, making domestic production vital for energy security. Past experience offers lessons. Between 1991 and 1994, ONGC’s operations in Wokha district extracted 1.04 million tonnes of crude, generating royalties of Rs. 33.83 crore. However, poor transparency and weak benefit-sharing created resentment, as only a small portion of revenue reached indigenous landowners. This highlights the need for a modern, transparent, and equitable framework for future oil development. Nagaland cannot afford to wait indefinitely. Since the 1997 ceasefire, the slogan “Solution, not Election” has echoed in 1998 before assembly election. The same demand prevailed in 2018 and 2023 yet till today, a comprehensive settlement has not materialised. The result has been political expectation without economic progress, and economic deprivation without political closure. Breaking the impasse does not mean abandoning the Naga political cause. Economic strength can reinforce political aspirations. A poor, dependent state cannot negotiate confidently, but one with revenue, institutions, and public trust is better placed to protect its interests. Any framework for exploration must respect Article 371A. A lesson also needs to be drawn from the Nagaland Petroleum & Natural Gas Rules 2012 that Article 371A must align with the constitutional provisions. Decisions on land and resources should be scrutinised and approved by the Nagaland Legislative Assembly through consultations. A transparent, publicly audited oil revenue fund should safeguard long-term benefits. Village councils, customary institutions, and landowners must be genuine partners through informed consent, fair compensation, and transparent participation. Nagaland’s choice is not between sovereignty and surrender, but between stagnation and sustainable strength. Protecting identity, constitutional rights, and economic progress can advance together. The time has come to unlock the state’s black gold responsibly.