From 1984 until 1993, the Indian state of Punjab witnessed a sustained insurgency by Sikh militants campaigning for a separate sovereign state. This insurgency was ultimately defeated by the overwhelming use of security force that officially resulted in the deaths of 30,000 people. By the mid-1990s, a ‘normalcy’ had returned to Punjab politics, but the underlying issues which had fuelled the demand for separatism remain unaddressed. This paper examines critically the argument that India’s ethno-linguistic federation is exceptional in accommodating ethno-nationalist movements. By drawing on the Punjab case study, it argues that special considerations apply to the governance of peripheral regions (security, religion). Regional elites in these states struggle to build legitimacy because such legitimacy poses a threat to India’s nation and state-building. In short, India’s ethno-linguistic federation is only partially successful in managing ethno-linguistic demands in the peripheral Indian states.