Maharashtra’s Hidden Lever For Fast-tracking Economic Prosperity — Indian Foreign Policy

Maharashtra’s economy has one arrow in the state government’s quiver that can make a huge positive difference for its skilled labour pool. That is India’s foreign policy.

It may sound odd that a state can benefit explicitly from the country’s foreign policy. But in the era of Prime Minister Narendra Modi, who has democratised the understanding of foreign policy, it should not come as a surprise.

India’s foreign policy has increasingly been used to further not just the country’s diplomatic interests but also to make the lives of Indian citizens better. One way in which this is being done is by aggressively pushing India’s economic and trade interests through its newfound “vishwabandhu” status.

Maharashtra’s economy is a microcosm of India’s own economy, with strengths and interests in every conceivable sector. By itself, Maharashtra, at $500 billion gross domestic product (GDP), is not far from being a top-30 global economy. Hence, it is tautological that Maharashtra benefits from India’s economic growth-linked foreign policy.

Connectivity

The India-Middle East-Europe Economic Corridor (IMEEC) has been the toast of the global trade world since its announcement in September 2023 during the G20 Leaders’ Summit in New Delhi.

Maharashtra is undoubtedly the state that stands to gain from the world’s most ambitious intercontinental connectivity project. The upcoming deep-water, deep-draft Vadhavan port and the Dighi Industrial Smart City will be the immediate gainers from this landmark project.

These ports will be best-placed to ship the demand for Europe’s consumption as well as industrial goods in the shortest possible time, while bypassing security concerns playing out in the Red Sea.

The IMEEC, by its design, brings together countries that have not always seen eye to eye. Even the design has been agreed to due to India’s equi-closeness approach to foreign policy and the United States’ sponsorship.

Devendra Fadnavis was the brain behind the revamp of Vadhavan (which is true for all the new and shining infrastructure being built in Maharashtra lately). This ambitious project was identified in the 1980s as indispensable for India’s trade growth. But it was shelved in the 1990s, until Fadnavis resurrected it under the Modi government’s Sagarmala programme in 2015.

With PM Modi firmly in the saddle in the third term, Vadhavan — and Dighi, another example of ideal centre-state collaboration — can become the hub of India’s maritime prosperity. Of course, this will need the state to benefit too from the vision of someone like Fadnavis.

Employment

In the recent state visit of German Chancellor Olaf Scholz, India and Germany signed an agreement where more Indian workers can find job opportunities in Germany.

The Maharashtra government had already been ahead of the curve in anticipation of greater Indo-German collaboration. In August, the state government advertised recruitment for jobs in various German companies in the Baden-Wuttenberg region.

This region is one of the industrial cores of the country, located to the south west, with the automobile and industry hub, Stuttgart, as its main city. The region adjoins Bavaria, another German industrial powerhouse. 

The Modi government has conceptualised the “world as a workplace” model, where Indians can contribute to the economies of various friendly countries, earning and living legally with respect. Maharashtra has aligned itself with this objective. The availability of these opportunities and the continuity of such policies will again depend on who governs the state after the upcoming election.

Agriculture Exports

The Modi government has been working towards creating new sources of farmer incomes. The lucrative export markets present an ideal opportunity to tap into to fulfil this objective. 

Maharashtra has been the hub of India’s agriculture cooperative movement and has taken to the concept of farmer producer organisations, which seek to collectivise and formalise agriculture, instantly.

During Fadnavis’ tenure as chief minister, liberalising agriculture marketing was a huge reform. Much of it was undone by the coalition government which succeeded him. However, in recent years, with Fadnavis back in control in Mumbai, Maharashtra has seen renewed agriculture export activity.

Whether it is Ahilyanagar’s pomegranates to Australia or Purandar’s figs to Poland, Maharashtra’s farmers are finding new export markets, ensuring better price realisation and, hence, prosperity.

These business opportunities are made possible with constant market access negotiations, which happen as part of bilateral trade deals. If India’s free trade agreements with the United Kingdom and the European Union materialise, it is conceivable that the farmers of Maharashtra will have much to rejoice.

The $1 trillion GDP dream Maharashtra aspires to achieve requires not just a good centre-state relationship but, in fact, supplementary visions and complementary ideas, which can effectively leverage central initiatives without political bickering or competitive credit-snatching.

Maharashtra is a great example that economic growth is not a given, even when all the underlying ingredients are available. You can have favourable demographics, enabling democracy, strong institutions, and hungry-for-excellence human resources. But it needs top-down governance will, resolve, and the execution ability to deliver meaningful GDP growth, channelling these ingredients constructively.

Maharashtra’s voters can ensure that the promise of a prosperous Maharashtra is not tempered by the vagaries of politics.