This paper examines the genesis, growth and continuance of ethnicity and insurgency in Tripura, a much-troubled state in North-East India. It is argued that the problems of ethnicity and insurgency in Tripura have much to do with modern politico-economic processes than with mere ethnic group identities. It is suggested that ethnicity is neither static nor a pre-determined object, but a situational construct. Though based on some real life experience of deprivation, it is otherwise manipulated and mobilised for personal/group-interest and is sustained by political rivalries and state actions. There has been a rising trend of ethnic movement and unrest, communal riots, secessionist movements and insurgent activities in India over the last few decades. These phenomena have gained new intensity and momentum, leaving a substantial impression on the structure and processes of contem porary Indian society. The question of ethnicity or identity is, however, not a typical feature of the ‘tradition’-bound societies of the East. On the contrary, minorities and nationalities of both the ‘capitalist’ and ‘socialist’ worlds have often fought on ethnic lines. It has, therefore, been argued that modernisation does not necessarily de-ethnicise cultural communities; it may crystallise ethnic consciousness (Sharma 1990:33). The spread of modernity has, however, affected ethnicity in different ways in different types of societies. Studies on ethnic identity formation in India have time and again showed that contested ethnic categories or boundaries are not ‘natural’, ‘given’ or trans -historical. They are situational, being created and recreated by the social, economic and political processes generated in the complexities of modern life. This paper analyses the role of such ‘secular’ factors in the evocation and nourishment of ethnicity. The case of Tripura, a much troubled state in North -East India, offers an excellent opportunity to understand the importance of modern processes and institutions, including the role of the