The aim of this article is to analyse the role of states in the formulation of India’s trade policy from evolutionary and present perspectives as well as the contemporary issues that call for a modified institutional arrangement from a more state-inclusive point of view. Over the course of the last twenty years, however, trade policy making has become a tedious task, which made it extremely hard for any trade ministry to perform his/her duties swiftly. The ever increasing ‘range’ (and also importance) of ‘tradables’ in goods and services, capital, labour, as well as newborn issues in the international trading system and multiplicity of trade agreements, have made it imperative for trade ministries to have effective and deeper ‘communication’ with public entities and private interests within their sovereign states. In order to achieve this, a trade ministry must have an ‘institutional’ architecture that takes cognizance and acts upon the various demands emanating from various parts of the country. India’s trade policy is formulated and implemented mainly by the Ministry of Commerce and Industry. While the constitutional provisions regarding India’s trade policy decision making have remained unchanged since gaining independence, the evolution of how states have become increasingly important in India’s trade policy making, is of importance. Hence, it is imperative to understand as to why states are becoming important in India’s trade policy formation and how institutions facilitate the same? Hypothising that, states are playing increasingly indispensable role in India’s foreign trade policy formation, this paper shall attempt to answer the abovementioned.