The present study aimed to utilize maize landraces from the North Eastern Hill Region (NEHR) of India for hybrid development, addressing the absence of established heterotic groups for maize in this region. Eighty inbreds derived from diverse local landraces were test-crossed to two testers LM-13 and LM-14. The 160 testcrosses were evaluated over two seasons using an alpha lattice design. Heterotic grouping studies utilizing BLUP values, included analyses of specific combining ability (SCA), specific and general combining ability (HSGCA), and GCA of multiple traits (HGCAMT). Additionally, 34 SSR markers were employed to group the inbreds based on genetic distance (SSR_GD). Breeding efficiency tests indicated that the conventional SCA and HSGCA methods were the most effective for heterotic grouping, enabling classification of the overlapping inbreds into the corresponding tester groups. Validation involving 10 inbreds – 5 from each tester group crossed in a full diallel fashion – revealed that gene action was predominantly non-additive, a prerequisite for heterosis breeding. The highest-performing hybrids exhibited better parent heterosis (BPH) ranging from 75 to 384%, demonstrating significant yield advantages. These hybrids combined moderately divergent parents with contrasting female and male GCA values and BPH was significantly associated with SCA effects, providing predictive insights for optimizing hybrid development. The findings of this study highlight the potential of NEHR germplasm for developing high-yielding hybrids tailored to local conditions. These hybrids would particularly benefit smallholding farmers practicing shifting cultivation by enabling cost-effective production and providing economic benefits.