The first-ever estimates for interstate trade flows indicate a trade to GDP ratio of about 54 per cent, a number that is comparable to other large jurisdictions and that contradicts the caricature of India as a barrier-riddled economy; the ratio of India’s internal and international trade also compares favourably with others. De facto, at least, India seems well-integrated internally. A more technical analysis confirms this: trade costs reduce trade by roughly the same extent in India as in other countries.
When it comes to internal trade, the big negative outlier is in fact Indonesia.
That is all from the new and interesting Of Counsel: The Challenges of the Modi-Jaitley Economy, by the excellent Arvind Subramanian.