Northeast India has a history of being strategically populated with non-tribal people since colonialism, leading to resentment among the indigenous population and the emergence of sub-nationalism rooted in local culture and history. This sub-nationalism asserts the insider-outsider dichotomy, (native tribal v/s non-native settler), resulting in ethnic conflicts and demands for secession. Amidst the region’s rich cultural diversity and the presence of numerous smaller ethnic groups, the contemporary literature from Northeast India, including poetry, fiction, nonfiction and drama, serves as a critical lens to unravel the dynamics of ethnic boundaries. Integrating Fredrik Barth’s notion of “ethnic boundaries,” which posits that migration and mobility, with their accompanying social processes of exclusion and incorporation, maintain distinct ethnic categories, this article attempts to analyze how contemporary literature from the region unveils the myth of the insider-outsider dichotomy at play. This will be examined through a nuanced interpretation of two contemporary novels from Northeast India, Mamang Dai’s The Black Hill (2014) and Anjum Hasan’s Lunatic in My Head (2007). By foregrounding Barth’s theoretic framework, the select novels decipher the underlying dynamics of exclusion and incorporation, challenging the conventional binary of “insider” and “outsider.” This study makes a noteworthy contribution to the discussions around society, ethnicity, and peace in Northeast India, using textual analysis method where literary narratives are interpreted in their sociopolitical contexts. It highlights the importance of challenging existing suppositions regarding ethnic identity and adopting a comprehensive and inclusive approach toward promoting peace in the region.