India looks to its east

Emerging states in the east like Assam, Odisha and Uttar Pradesh are vying with traditional economic heavyweights for a share of the pie, but challenges remain.

- Nirmala Ganapathy Rohini Mohan

The state of Odisha on India's eastern seaboard is a flurry of economic activity. Its newly installed Bharatiya Janata Party-led state government is in a rush.

In focus is the Paradeep Port, which Odisha hopes to transform from a quiet port known for handling coal and crude oil shipments into a hub for sustainability.

Vast tracts of empty land around it are being identified for green hydrogen and renewable energy projects that will green the maritime sector.

In the last seven months since India's general election, Odisha, along with other emerging states such as Assam, Uttar Pradesh, Rajasthan and Madhya Pradesh, are vying with traditional economic heavyweights Tamil Nadu, Maharashtra, Gujarat and Karnataka to court foreign investment in manufacturing.

"There are lots of states that are becoming very competitive. Though India is a country, the states are also competing with each other," Mr Malik Ahamadeen, the chief executive of Sri Lankan clothing manufacturer MAS India, told The Straits Times on the sidelines of the Utkarsh Odisha investment summit in late January.

The states are casting a wide net, seeking investments in sectors such as renewable energy, semiconductor manufacturing and electronics.

Need and ambition are driving the competition.

To be able to generate employment for India's 370 million young people aged between 15 and 30, and bring up lower-growth states, development must be evenly distributed across the country. Prime Minister Narendra Modi's government is now chaperoning the less-developed states, aiming to turn India into an economically developed nation by 2047.

By some estimates, India has to consistently achieve 8 per cent gross domestic product (GDP) growth each year in the next decade, to reach a GDP of US$19 trillion by 2047 from about US$3.7 trillion (S$4.9 trillion) in 2024. But annual growth is projected at 6.6 per cent for 2025.