Health workers have culled almost 40,000 poultry and destroyed thousands of eggs so far after the first bird flu case of the year was confirmed. They are planning to cull almost 150,000 birds in the area.
The authorities have already imposed a 10 km surveillance zone around Imphal, Manipur's capital, and it is expected to be extended to other districts following reports that a large number of chickens have been smuggled out of the affected zone.
It was the local people who alerted the police about the smuggling.
A veterinary worker in Manipur who died suddenly during the culling operations was not a bird flu victim but died after consuming formalin issued by the government for spraying at the burial sites of culled birds. His death created some panic amongst workers in the rapid response teams sent to deal with the outbreak.
Officials have revealed that they have detected poultry smuggled out of Imphal in Thoubal and Bishenpur and authorities have seized 1,500 chickens smuggled out of the affected zone.
Police has detained more than a dozen farmers but the state government has promised farmers compensation to the tune of 40 rupees ($1) for every one of their chickens it has to cull.
The northeastern region of India has Bangladesh, Myanmar and China on its borders and all have also been hit by the H5N1 strain. Indian troops on the state's border with Myanmar have now begun extra patrols to prevent poultry smuggling.
Last year the poultry industry all round the country had a loss due to bird flu, running to hundreds of crores. This year The UAE has banned the import of eggs and chicken from India. Myanmar and Sri Lanka have also imposed a temporary ban on imports of poultry products from India.
Globally, H5N1 has killed nearly 200 people out of more than 300 known cases, according to the World Health Organization.
In the wake of the outbreak in Manipur the Poultry Federation of India has put forward a proposal to create special poultry farming zones so that the industry as a whole does not suffer when the birds are hit by diseases in a small isolated area. The agricultural ministry is expected to look into it.
"We are going to meet the agricultural ministry Monday with two main agendas. Firstly, we want to urge the government to divide the entire country into specific poultry farming zones," Shabbir Ahmed Khan, secretary of the Poultry Federation of India, "We would request the government to create state-wise zones similar to what is followed in buffalo meat exports. By doing this if the strain is found in one state, then the rest of the country could at least be declared free," Khan said.