PM Modi urges states to unlock growth, leverage FTAs to drive India's development

New Delhi: Prime Minister Narendra Modi on Saturday urged state chief ministers to work together to transform India into a developed country by removing growth bottlenecks and capitalising on emerging trade opportunities, according to NITI Aayog CEO B.V.R. Subrahmanyam.

Addressing the 10th governing council meeting of NITI Aayog—attended by chief ministers and lieutenant governors of union territories—Modi emphasised the importance of collective effort in accelerating the country’s development trajectory.

If all states work together to make India developed, stupendous progress can be made, he said.

Modi urged states to improve the ease of doing business by eliminating outdated laws and other hurdles that deter investment. He also called on them to focus on boosting exports.

“The world is open for us,” Subrahmanyam said. “The government has signed several Free Trade Agreements (FTAs). More are in the pipeline. We need to leverage the FTAs. To leverage that, the prime minister wanted states to start thinking on those lines.”

Modi’s push for states to tap global markets comes as India negotiates major trade deals with the European Union and the US, following the announcement of an FTA with the UK earlier this month.

India is the fourth-largest economy today and, if the nation sticks to its current trajectory, it will become the third-largest—after the US, China and Germany—in another two and a half to three years, Subrahmanyam said, citing an International Monetary Fund (IMF) projection about India overtaking Japan this year.

The IMF, in its World Economic Outlook 2025, projected that India’s economy will reach $4.187 trillion in 2025, overtaking Japan’s $4.186 trillion. For India, the year 2025 refers to the fiscal year ending March 2026.

Asked about the impact of Trump-era tariffs, Subrahmanyam said the issue did not come up during the meeting but noted that the current geopolitical and geo-economic environment is favourable for India.

India hasn’t been hit as badly by these tariffs as other countries, he added.

India, he said, remains one of the few countries with a large, cost-competitive labour force capable of supporting large-scale manufacturing operations. However, states must address gaps in infrastructure, skilling, and access to utilities like electricity, water, and logistics.

Some industrialised states have already made good progress, he said, while others “need to get their act together.”

A meeting of state chief secretaries last year had laid out detailed suggestions to address these challenges, Subrahmanyam added.

At Saturday’s meeting, states also shared inputs for the vision of Viksit Rajya for Viksit Bharat @ 2047, according to an official NITI Aayog statement. Suggestions and best practices spanned areas such as agriculture, education, skill development, entrepreneurship, drinking water, governance, digitalisation, women’s empowerment, and cybersecurity.

Several states also spoke about developing state-level vision documents for 2047. Subrahmanyam said 17 states have either released or are close to releasing their long-term development blueprints.

Given that India has already solved many basic problems and extreme poverty, the country can grow much faster, as others have done in the past, Subrahmanyam said, citing Modi.

NITI Aayog has issued guidelines for drafting state vision documents, which Subrahmanyam stressed must be “practical and implementable,” with measurable outcomes.

“And the vision document is not a daydream. It is a practical, implementable document with key performance indicators which are to be monitored… and it should be flexible enough to accommodate changes over 25 years,” said Subrahmanyam.