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Photographer: Annie Gowen/The Washington Post via Getty Images Photographer: Annie Gowen/The Washington Post via Getty Images

India plans to invest billions of dollars to populate a remote northeastern state it has neglected since fighting a war with neighboring China more than five decades ago.

Prime Minister Narendra Modi’s government is finalizing blueprints for a $6 billion highway in Arunachal Pradesh, which is also claimed by China. Construction on the 2,000-kilometer (1,243-mile) road will start as early as 2018, Kiren Rijiju, minister of state for home affairs, said in an interview.

Kiren Rijiju Photographer: Kuni Takahashi/Bloomberg

"If China is developing on their side of the territory, we should develop on our side," Rijiju, a native of Arunachal Pradesh, said at his New Delhi residence on Saturday. "India has failed the people living along that border. We’re now taking very concrete steps in that direction."

Modi has taken a more assertive stance toward China as he seeks to constrain its territorial ambitions while still attracting investment to strengthen India’s economy. In addition to developing the northeast, Modi has sided with the U.S. in calling for stability in the South China Sea and bolstered ties with Sri Lanka after it voted out a pro-China government.

Arunachal Pradesh -- which means "Land of the Dawn-Lit Mountains" -- is an area in the Himalayas the size of Austria tucked between China, Myanmar and Bhutan. It has 1.4 million people, less than 1 percent of India’s 1.2 billion population, and a third of them live below the poverty line as hydropower, coal and mineral resources sit undeveloped.

Proposed highway in Arunachal Pradesh Source: Bloomberg

In 1962, India and China fought a four-week war over their Himalayan border. Chinese troops operating in extremely cold weather at high altitudes advanced into Arunachal Pradesh and another disputed area to the west. It ended when China declared a cease-fire and withdrew to a boundary known as the McMahon Line formed by Britain and Tibet in 1914, which serves as the de facto border today.

Since then, China has developed nearby areas. The Tibet autonomous region today boasts more than 7,000 kilometers of highways, all-weather road and rail links to China’s heartland, five airfields and a fiber optic network that connects nearly all towns, according to Delhi Policy Group.

Forgotten State

Arunachal Pradesh, by contrast, has been forgotten. The state was only connected to the national railway network last year, the nearest commercial airport is in another state and large swathes of the territory don’t have power or telecommunications.

While the state has more hydropower potential than what is currently installed in all of India, less than 1 percent has been developed. Only 29 percent of the region has paved roads compared with a national average of 62 percent, according to figures from the Central Electricity Authority and a report by PwC.

"We have reversed that policy because it’s a huge geographical tract and very strategic," Rijiju said of the failure to develop Arunachal Pradesh.

Modi has allocated more resources to build schools, clinics and small bridges in the state, and is planning to boost telecommunication and transport networks, Rijiju said.

"The people along the border have migrated down where amenities are available," he said. People native to the region "should not have to move out for want of basic amenities."

Rijiju stressed that India’s moves shouldn’t be interpreted as a challenge to China. "I don’t want to link it to China," he said. "We’re not doing anything to disturb relations. It’s not in terms of challenging or competing with China, but in terms of securing our own territory."

No Recognition

China may not see it that way.

"The Chinese government has never recognized the so-called ’Arunachal Pradesh’ unilaterally established by India," Vice Foreign Minister Liu Zhenmin said in a Feb. 21 statement after Modi gave a speech in the state capital. China calls the area South Tibet and has repeatedly asked India to "refrain from actions that complicate the boundary issue."

Modi has sought to settle the boundary dispute, which continues to flare up from time to time. A two-week standoff ensued in September 2014 when Chinese troops advanced several kilometers into northern Ladakh, an area of strategic importance nestled between Tibet and Pakistan.

During a visit to Beijing in May, Modi called for China to "reconsider its approach" and settle the border issues once and for all. It may yet happen: President Xi Jinping said last year that the Chinese side is determined to resolve the boundary question at an early date.

The highway project should strengthen economic ties between India and China instead of dividing the nations, Rijiju said. China was India’s largest trading partner last year, according to data compiled by Bloomberg.

"It should not be seen as a confrontation but as complementary," he said. "These ancient linkages are a reality."

(Updates with details on China statement in 13th paragraph.)