Day 69 – Q 1. Recently a trend has started that individual Indian states are getting into bilateral deals with other countries and signing MoUs on different issues. What impact can it have on India’s federalism?
1. Recently a trend has started that individual Indian states are getting into bilateral deals with other countries and signing MoUs on different issues. What impact can it have on India’s federalism?
In a recent trend international relations are being conducted by the states on their own, termed as para-diplomacy. A number of Indian states have actively pursued foreign direct investment from abroad and other foreign economic opportunities. Gujarat, Madhya Pradesh, Tamil Nadu, West Bengal, and other states have regularly organized investor summits in order to gain foreign investment.
Positive impact on federalism:
- Cooperative federalism- Central government by itself is not well-equipped to meet the challenges posed by new political, economic and social forces. Paradiplomacy can combine efforts of both states and Centre to make India prosper.
- Autonomy to states- States are often better equipped than the Central government to undertake diplomatic measures in areas of trade, commerce, foreign direct investment, education, cultural exchanges and also outsourcing of business.
- Competitive federalism- States are competing with each in order to attract investment
- Financial independence- States need not depend on Centre for all their financial needs.
- Sovereignty- Increased role of states in international affairs undermines the Centre and affects sovereignty.
- Rise in disputes- States stand in foreign relations with a country might differ from the Centre’s stand and can thus affect the Centre-state relations.
- Unequal development- Rich and prosperous states will woo more foreign investment, thus widening the already existing regional disparity.
- Fuel secessionism- Power to connect with the outer world on their own can fuel secessionist movements further.
To promote paradiplomacy, Ministry of External Affairs has established a new States division along with other measures. There is, however, a need for a new structure in MEA in which the states are fully represented and can express their concerns and ask for Centre’s engagement in order to promote their interest without infringing upon Centre’s powers.
Best answer: P29