India’s Paradiplomacy

Imagine your home state is struggling to attract semiconductor investment, but a sister state in Germany just signed a deal with a chipmaker—how can your state pitch itself directly to that company? India’s paradiplomacy turns this frustration into action: states, cities, and even universities are bypassing New Delhi to cut their own global deals, proving that diplomacy isn’t just for ambassadors anymore.

What is Paradiplomacy? How is it different from classic state diplomacy?

Imagine your state government signs a cross-border trade deal with Nepal to sell mangoes grown in Uttar Pradesh. That isn’t classic diplomacy—where only the Government of India negotiates treaties with foreign countries—but it is paradiplomacy: subnational governments reaching across borders to solve shared problems or seize opportunities.

Classic state diplomacy is conducted by sovereign capitals: New Delhi speaks for India on global issues like climate change or trade pacts, and the outcomes bind every citizen. Paradiplomacy, by contrast, happens when a state like West Bengal or Tamil Nadu opens its own trade office in Dhaka or Singapore, or when Punjab’s agricultural universities partner with universities in Pakistan to develop drought-resistant crops. Both levels of action involve international engagement, but paradiplomacy keeps the initiative—and the benefits—closer to the communities that live with the results.

One concrete Indian example is the Ahmedabad-Mumbai bullet train project. While the central government negotiated financing with Japan, the governments of Gujarat and Maharashtra jointly planned station locations, land acquisition, and connectivity upgrades to ensure that commuters in both states directly benefit. This collaboration across state borders, driven by subnational leaders and local needs, is paradiplomacy in action—complementing, not replacing, India’s sovereign diplomacy.

Why did India’s paradiplomacy explode after 1991?

India's paradiplomacy witnessed a significant surge after 1991, and this phenomenon can be attributed to the convergence of three key factors: economic liberalisation, federalisation, and globalisation. The economic liberalisation policies introduced in 1991 opened up the Indian economy to foreign investment, trade, and technology, creating new opportunities for states to engage with the global economy. As a result, state governments began to take a more proactive role in promoting their respective regions as investment destinations, leading to the emergence of state-level international engagement. For instance, the state of Gujarat has been actively promoting its industrial and infrastructure development through international partnerships, such as the Vibrant Gujarat Summit, which attracts foreign investors and dignitaries from around the world. The federalisation of India's political system also played a crucial role, as state governments gained more autonomy to pursue their own economic development agendas. Globalisation further facilitated the growth of paradiplomacy, as Indian states began to compete with each other to attract foreign investment, talent, and technology. The city of Bengaluru, for example, has become a hub for IT and technology companies, with the state government of Karnataka actively courting international investors and partnering with foreign companies to promote innovation and entrepreneurship. As India continues to navigate the complexities of globalisation, the role of paradiplomacy is likely to become even more significant, with states playing a vital role in shaping the country's international engagement and economic development.

Which Indian states are paradiplomacy champions—and what are their signature deals?

Gujarat, Tamil Nadu, Karnataka, and Kerala aren’t just India’s growth engines—they’re also paradiplomacy champions, turning state-level deals into global headlines. Gujarat leads with its world-class Special Economic Zones (SEZs) like the Dholera SEZ, which lured companies such as Foxconn and Adani with plug-and-play infrastructure and single-window clearances. These zones aren’t just tax-free zones; they’re diplomatic showcases, where Gujarat’s CM personally pitches to global CEOs, turning state borders into economic gateways.

Meanwhile, Tamil Nadu flexes its industrial muscle through auto and engineering clusters in Chennai and Coimbatore. Companies like Hyundai, Renault-Nissan, and TVS have built integrated supply chains here, making Tamil Nadu the “Detroit of South Asia.” The state didn’t wait for Delhi—it signed sister-state agreements with Germany’s Bavaria and Japan’s Aichi to train workers and co-develop tech, proving how local ecosystems can punch above India’s weight.

Karnataka doubles down on tech and innovation hubs, with Bengaluru’s IT parks hosting global giants like Infosys and Wipro. But its paradiplomacy wins go further: the state inked a MoU with Singapore’s EDB to co-invest in a $500-million “Karnataka-Singapore AI corridor,” blending state funds with foreign expertise to train 10,000 AI engineers. This isn’t outsourcing—it’s co-creation.

Lastly, Kerala rewrites diaspora diplomacy with its “Keralites’ Welfare Bonds”. Faced with limited central funds, Kerala’s government launched a bond scheme exclusively for its 3-million-strong diaspora, raising ₹12,000 crore to build roads, hospitals, and schools. It’s a quiet revolution: Kerala’s expats in the Gulf aren’t just sending remittances—they’re becoming investors in their homeland, turning emotional ties into fiscal power. Each state’s deal reflects a simple truth: when Delhi moves slowly, states become India’s fastest diplomats.

How does the Constitution allow states to ‘do diplomacy’ without breaking federalism?

The Constitution of India, through the 7th Schedule, divides power between the Union and states, with Entry 14 (External Affairs) being a part of the Union List. This means that the central government has the exclusive power to handle external affairs, including diplomacy. However, states are not entirely excluded from engaging in diplomatic activities. In fact, the Constitution allows states to 'do diplomacy' without breaking federalism through a balancing act by the Supreme Court. The Court has interpreted the Constitution to permit states to engage in activities that promote international cooperation and friendship, as long as they do not conflict with the central government's foreign policy.

A notable example of this is the state of Kerala's participation in international cooperation programs, such as the Kerala-Slovakia cooperation agreement. This agreement aims to promote mutual cooperation in areas like tourism, healthcare, and education. While the central government retains the power to handle external affairs, the Supreme Court has allowed states like Kerala to engage in such activities, as they do not compromise the central government's foreign policy. This balancing act enables states to contribute to India's global engagement while maintaining the country's federal structure.

The Supreme Court's approach is guided by the principle of cooperative federalism, which emphasizes the need for cooperation and coordination between the central government and states. By allowing states to engage in diplomatic activities that align with the central government's foreign policy, the Court has facilitated a more collaborative approach to international relations. This, in turn, has enabled India to present a more unified and cohesive face to the world, while also promoting the interests of its states and citizens.

What tools do states actually use to go global?

When we think about paradiplomacy, we often wonder what tools states actually use to go global. In the context of India, several strategies are employed to promote international relations and cooperation. One key approach is through sister-state Memoranda of Understanding (MoUs), which facilitate collaboration between Indian states and foreign countries or regions. For instance, the state of Karnataka has signed MoUs with several countries, including Germany and France, to promote trade, investment, and cultural exchange.

Another important tool is the establishment of overseas offices, which serve as a bridge between Indian states and foreign markets. These offices help to promote trade, tourism, and investment, and provide a platform for Indian businesses to expand their global reach. Additionally, trade fairs and exhibitions are organized to showcase Indian products and services, and to attract foreign investment. The India International Trade Fair, held annually in New Delhi, is a prime example of such an event.

Furthermore, diaspora networks play a crucial role in promoting India's global engagement. The Indian diaspora, estimated to be over 30 million strong, is a significant source of remittances, investment, and cultural exchange. Many Indian states have established university partnerships with foreign institutions, which facilitate the exchange of students, faculty, and research collaborations. These partnerships not only enhance academic cooperation but also foster people-to-people diplomacy. Some notable examples include the partnerships between Indian Institutes of Technology (IITs) and top foreign universities, such as MIT and Stanford.

These tools and strategies enable Indian states to engage with the world, promote their interests, and contribute to the country's global influence. By leveraging sister-state MoUs, overseas offices, trade fairs, diaspora networks, and university partnerships, Indian states can effectively pursue their paradiplomacy goals and enhance their global presence.

Can paradiplomacy backfire? Political and legal risks to watch.

Paradiplomacy can sometimes backfire, turning state-level deal-making into Centre-state clashes, treaty breaches, or even Supreme Court battles. The risk starts when states strike their own international agreements without full Centre alignment. For example, in 2019, Kerala signed a Memorandum of Understanding (MoU) with the California governor to tackle climate change—an area where states often act first. But such MoUs sit in a legal grey zone: the Union government later clarified that only the Centre can formally commit India to international treaties. When states overstep, the Centre can freeze their initiatives, creating friction that slows down progress instead of speeding it up. This turf war isn’t just bureaucratic—it can delay critical projects like renewable energy investments or trade deals, leaving businesses in limbo and citizens waiting for promised benefits.

Another flashpoint is investment disputes. When states like Tamil Nadu or Maharashtra negotiate directly with foreign firms—say, for a semiconductor plant—the Centre may argue that the state overpromised incentives or violated national trade policies. These disagreements can escalate to the Supreme Court, where judges must decide whether states have the constitutional authority to act independently. The 2020 case of Vedanta’s Sterlite Copper plant in Tamil Nadu, where the state government ordered a permanent shutdown amid protests, shows how quickly paradiplomacy can turn into a legal quagmire. The plant’s foreign investors argued that the state breached their rights, dragging the dispute into national courts. Such cases remind us that while states can move fast, their actions must still align with India’s legal and diplomatic framework—or risk costly backlash.

How do cities and universities join the game? The rise of city diplomacy and academic twinning.

As city diplomacy gains momentum, Indian cities are taking the lead in fostering global relationships. Ahmedabad, for instance, has launched a climate compact to tackle environmental challenges, bringing together stakeholders from across the world to share best practices and technologies. Similarly, Bengaluru, known for its thriving tech industry, hosts tech summits that attract international participation, facilitating collaborations and investments. These initiatives demonstrate how cities can proactively engage in paradiplomacy, complementing national efforts and promoting their unique strengths.

Universities are also joining the paradiplomacy landscape through academic twinning programs. IIT-Bombay's collaboration with MIT is a notable example, where students and faculty from both institutions work together on research projects, exchange ideas, and develop innovative solutions. Such partnerships not only enhance academic excellence but also foster people-to-people diplomacy, promoting cross-cultural understanding and cooperation. As Indian cities and universities increasingly engage in paradiplomacy, they are redefining the country's global engagement and creating new opportunities for cooperation and mutual benefit.

Does paradiplomacy really change India’s global image—or is it just noise?

Paradiplomacy lets India’s states open small windows to the world, but does that light reach far enough to shift how the world sees India? The answer lies in balancing soft-power gains against hard-power limits. Gujarat’s biennial ‘Vibrant Gujarat Global Summit’ is a textbook case: since 2003, it has hosted prime ministers, CEOs, and investors from 130+ countries, luring over ₹45 lakh crore in MoUs that translate into factories, jobs, and global supply-chain links. When Japan’s Suzuki picks Gujarat for its next battery gigafactory, or when the UAE’s DP World signs a port deal in Mundra, the state isn’t signing treaties—but it is quietly rewiring India’s economic image as a reliable, reform-friendly partner. That’s soft power in action: high-visibility deals that make foreign investors think of Gujarat first, and India second.

Yet the hard ceiling is visible in the fine print. The Constitution gives states no treaty-making power; any MoU still needs the Union government’s nod before it can bind India internationally. In 2022, Tamil Nadu’s proposal to co-host a sister-city pact with Colombo was held up for months because Delhi feared it could be misread as a standalone foreign policy move. The optics matter: the world may cheer Gujarat’s summits, but it still judges India by the flag on the table—and that flag flies only from Raisina Hill.

So paradiplomacy is neither magic nor noise; it’s a layered signal. States like Gujarat broadcast economic openness and administrative efficiency, nudging global perceptions upward. But until those signals carry the weight of a ratified treaty, India’s global image will keep oscillating between the buzz of a summit corridor and the quiet of a ministry file.

What’s next? Predictions for 2030 and beyond.

As India continues to navigate the complexities of paradiplomacy, it's essential to look ahead and forecast the future of climate-city alliances, AI governance MoUs, and subnational climate finance innovations. By 2030 and beyond, we can expect to see a significant rise in climate-city alliances, where cities and states collaborate to address the challenges of climate change. For instance, the city of Surat in Gujarat has already taken a lead in this regard, with its Surat Climate Change Trust initiative, which aims to reduce the city's carbon footprint and promote sustainable development. Similarly, we can expect to see more AI governance MoUs being signed between Indian states and international organizations, aimed at regulating the use of artificial intelligence and ensuring that it is used for the betterment of society. The Kerala government's recent partnership with a leading AI research institute is a prime example of this trend. Furthermore, subnational climate finance innovations are also expected to gain traction, with states and cities exploring new and innovative ways to finance climate change mitigation and adaptation efforts. The Green Bond issued by the Indian Railways is a notable example of this, where the proceeds from the bond are being used to finance energy-efficient projects and reduce the railway's carbon footprint.

Case study: Tamil Nadu’s ‘Global Tamil Connect’—how one state leveraged its diaspora.

Picture Tamil Nadu as a state that has always punched above its weight in India’s economy and culture. But how does a single state amplify its voice on the global stage without waiting for New Delhi? Enter Tamil Nadu’s “Global Tamil Connect”, a deliberate strategy to turn the state’s vast diaspora—over 15 million Tamils spread across 100+ countries—into a living embassy of goodwill, investment, and soft power. The core insight is simple: if the diaspora feels pride and ownership, they become your best ambassadors, investors, and problem-solvers long before any trade delegation lands in Singapore or Sydney. The playbook was straightforward. First, the state mapped its diaspora by skill, location, and sector—software engineers in the US, industrialists in Malaysia, artists in the UK—and invited them into structured dialogues. Second, it offered tangible value: fast-track business approvals for diaspora-led startups, scholarships for second-generation Tamils, and cultural festivals that doubled as networking summits. Third, it institutionalized the relationship through the Tamil Global Meet, a biennial event that alternates between Chennai and a global hub, where MoUs for investment, knowledge transfer, and cultural exchange are signed in real time. The metrics tell the story. Between 2015 and 2023, Tamil Nadu attracted over ₹45,000 crore in diaspora-led investments—think IT parks in Taramani, agro-processing units in Coimbatore, and renewable energy projects in Ramanathapuram. More quietly, diaspora volunteers have mentored 50,000 students via online coding camps and funded 200 village libraries. The state also tracks “diaspora pride” through social sentiment dashboards, measuring how often Tamils abroad mention the state in global forums. For other states eyeing similar diplomacy, three lessons stand out. One, start with identity, not bureaucracy—celebrate language, food, and festivals before pitching projects. Two, make participation frictionless: a single portal for visas, clearances, and grievances cuts red tape that chokes diaspora enthusiasm. Three, measure what matters—not just rupees invested, but trust built and networks activated. Tamil Nadu didn’t just export labor; it imported loyalty, turning a brain drain into a brain circulation engine. That’s the power of a state that knows its people are its best foreign policy.

Key takeaways

• Paradiplomacy lets Indian states, cities, and universities cut global deals on trade, tech, and climate without waiting for New Delhi.
• The 1991 reforms, federal devolution, and globalisation created the perfect storm for subnational diplomacy.
• Constitutional Entry 14 allows states to engage abroad, but the 7th Schedule keeps the Centre in charge of treaties.
• Gujarat, Tamil Nadu, Karnataka, and Kerala lead with SEZs, auto clusters, tech hubs, and diaspora bonds.
• Risks include Centre-state clashes, treaty breaches, and investment disputes that can land in the Supreme Court.
• City diplomacy and university twinning are the next frontier—think Ahmedabad’s climate compact and IIT-Bombay’s MIT tie-ups.

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