Bihar - Land of the first republic

Quick intro, Bihar is the state where I hail from. Could I meaningfully invest my time and energy into it? Before tackling that question, what is Bihar?

Geographically, it is a state in India bordering Uttar Pradesh to its west, Nepal to the north, the northern part of West Bengal to the east, and Jharkhand to the south. Historically, Bihar was the site of the world's first republic in Vaishali and later became the center of the Magadha Empire. Spiritually, it is known for its many temples and pilgrimage sites, including the famous Bodh Gaya where Lord Buddha attained enlightenment.

Why are these important? Well, in current times, Bihar is ranked as one of the most backward states in India. Still determined to navigate my way through it. My findings so far

Bihar - Land of the unequals

Growing up both in Delhi and in a remote town in Africa, I was never really exposed to the 'caste system'. For me, it was almost invisible. My 9 year old self thought caste was just some sort of name or 'house' you joined, like in Harry Potter. An invisible Gryffindor or Slytherin badge that I thought was just for tradition.

That changed while I was in my village in Bihar. Meeting any elder started with touching their feet (sometimes you get money for it as blessings). But after touching the feet of a dark-skinned old woman, I got told by one of my relatives that you don't touch their feet. And then I finally understood. It's not just tradition. It's a lifestyle.

I finally understood why the village was segregated. A plot of farmland separating houses made with bricks from those without. I got to know that the privilege I am entitled with is called 'Bhumihar'.

Bhumihar

Fast forward, I am 20. Young blood ready to work on exciting problems and businesses. Visiting for a marriage, I decided to tackle questions like: What's my ancestry? How large is my ancestral land (after all Bhumihar means 'land seizers')? How can I set up some business here? Should I long or short Bihar?

The Bhumihar ancestry is associated with a relatively recent term from the 18th or 19th century. Originally called Babhan (a corruption of the word Brahmin), the community began in military service before transitioning into landowners. During the period known as the "Jungle Raj," the community saw militant pseudo-representation through the Ranvir Sena. This group emerged in response to Maoist guerrillas who were actively capturing and killing Bhumihar men.

After checking first hand on my ancestral land, I realized how real the land struggle is even for the smallest plots. Apparently, land registration and ownership have a lot of loopholes, which means anyone can claim ownership and entangle you in court cases. Which is what happened to some of the plots, while others were informally leased off in this new unwritten "zaameendar system". This feudal system is still prevalent in Bihar. Ironically, Bihar was the first to abolish it on paper, but implementation was dicey.

My reactions were mixed. First was genuine concern; you are playing escape poverty on survival mode if you are still a landless peasant. Second was, oh wow, cheap labour. After all, I came here to do businesses, right?

My ideas

My ideas came from just doing deep research on Gemini. Evaluating the idea's unit economics and feasibility. I would say with around 3+ hours of collective research I came up with the following ideas:

1. Door to door alcohol delivery service: Lol just joking. It's an alcohol banned state, though black market sales do have higher margins.

2. Lotus silk: Lotus farming is already high in Bihar due to the huge exports of Fox Nut (Makhana). But due to a skill gap, the lotus silk industry is non-existent and outsourced to Manipur. So you can imagine the unit economics:

   • Labor-Heavy: Extraction accounts for nearly 65-70% of the total cost because it is highly manual and cannot be mechanized easily without damaging the fibers.
   • Raw Material Advantage: Since the stems are an agricultural byproduct of the Makhana industry, your input cost is negligible compared to traditional silks.
   • Luxury Positioning: While the cost to produce is around ₹3,000, the market value for pure lotus silk often starts at ₹10,000+ per meter, providing a significant margin for branding and export.

3. Lychee Seed Farm: You are not selling the seed itself to the end consumer. You are selling the bioactive molecules inside it. The raw seed is a waste byproduct of the fruit industry (juice/pulp manufacturing). Your business model is Botanical Extraction, where you aggregate wet seeds at scrap value (~₹5/kg) during the short harvest window, process them into stable powder for a total cost of ~₹62/kg, and supply the high-margin extract to nutraceutical firms at ₹500–₹1,000/kg.

You got the gist. Target a high export crop in Bihar, see what leftovers are not being utilized due to skill or machine gap. Fill that gap and profit.

Ease of Setup?

The amount of subsidies and zero interest loans were really encouraging, but soon I started to hear testimonies on its bureaucracy and corruption which got discouraging. Although not farming/processing related, tweets by Chandan Raj, who opened a semiconductor startup, highlighted a lot of struggles. Just figuring out logistics in Patna (capital of Bihar) kinda gave me a reality check.

But I guess the funny part was just the chill nature of my village. Everyone kinda liked to live how it is. Growing stable crops, doing the usual farming routine, having driving side gigs. And this wasn't just my village, it kinda felt like the whole rural scene of Bihar was similar. Then I realized it was primarily due to the migrations of young people outside of Bihar, leaving the boomers who aren't in the mood for creative disruption. Hence the cheap labour that I could leverage around my area were mainly old women.

Conclusion?

In an interview with Chandan Raj, he joked about how his Chinese clients were happy to work in the land where Buddha got enlightened. My point with this? Who knew having a connection with Buddha is an alpha to get semiconductor clients from China.

Similarly, what other alpha is not tapped due to just information arbitrage, capital inaccessibility, and just skills training in general in Bihar. So would I want to invest my time in Bihar i.e. Long or Short? Well, that is still an ongoing question.