The western Deccan is well‐known for its spectacular rock‐cut Buddhist architecture and its extensive Buddhist monastic complexes. Many of these structures were cut during the Satavahana period, the first large‐scale state polity in western India. In order to understand how Buddhist monastic institutions were integrated into the social, political, and economic organization of this period, it is necessary to begin to consider how production and distribution of produce and craft goods were structured and how both Buddhist monastic institutions and political authorities were involved in these patterns. Specifically, I examine the hypothesized link between Buddhism, trade, and state formation and suggest that no simple causal relationship can be discerned.