NITI Aayog launches India’s first Investment Friendliness Index; Gujarat tops, followed by Maharashtra and Tamil Nadu
By integrating infrastructure, governance, financial health, environmental resilience, and investor experience into a single framework, the index provides states with a roadmap for attracting greater investment.
Dr Ashok Kumar Lahiri, Vice Chairman, NITI Aayog, along with other officials, releases Investment Friendliness Index in New Delhi on Friday.
NEW DELHI: In a major step towards strengthening India’s investment ecosystem and accelerating the vision of Viksit Bharat @2047, NITI Aayog has released the country’s first Investment Friendliness Index (IFI), a comprehensive framework to assess how effectively states and Union Territories create an environment conducive to domestic and foreign investments.
The Index, announced in the Union Budget 2025–26 and developed following the Prime Minister’s direction during the 9th Governing Council Meeting of NITI Aayog in July 2024, aims to promote competitive and cooperative federalism by benchmarking state-level reforms that influence investment decisions.
Gujarat Emerges as India’s Most Investment-Friendly State
Based on the overall assessment, Gujarat secured the top position, followed by Maharashtra, Tamil Nadu, Goa, and Odisha, making them the country’s five Top Performers.
The report classifies all 28 States and 8 Union Territories into four categories:
- Top Performers: Score above 50
- Frontrunners: 45–50
- Emerging Performers: 40–45
- Aspiring States: Below 40
While five jurisdictions qualified as Top Performers, 15 were classified as Frontrunners, with eight each falling under Emerging Performers and Aspiring States.
Also Read: Odisha’s rise signals India’s new investment geography as NITI Aayog index redraws state rankings
State-Level Reforms Key to India’s Growth
The report highlights that although national economic reforms provide the policy framework, investment decisions are largely influenced by state-level factors such as industrial infrastructure, land availability, regulatory efficiency, institutional capacity, and policy stability.
According to NITI Aayog, strengthening these ecosystems will be critical for increasing private investment, boosting industrialisation, creating jobs, and sustaining India’s long-term economic growth.
Eight Pillars of Assessment
The Investment Friendliness Index evaluates States and Union Territories across eight broad dimensions:
- Infrastructure
- Business Climate
- Resources
- Government Policy
- Regulatory Ease
- Institutional Environment
- Financial Health
- Environmental Resilience
The framework is based on 84 indicators, combining official datasets with investor perception surveys, making it one of the most comprehensive investment benchmarking exercises undertaken in India.
Peer Group Rankings
Recognising India’s geographical and administrative diversity, NITI Aayog also ranked jurisdictions within three peer groups.
Large States
- Gujarat
- Maharashtra
- Tamil Nadu
Hilly & North-Eastern States
- Uttarakhand
- Assam
- Himachal Pradesh
Union Territories & City States
- Goa
- Delhi
- Chandigarh
Investor-Centric State Profiles
A key feature of the report is detailed State Profiles, which combine quantitative scores with investor feedback to present a holistic picture of each State’s investment ecosystem.
These profiles identify strengths, highlight reform priorities, benchmark performance against comparable States, and provide policymakers with actionable insights to improve investment attractiveness.
More Than Just Rankings
NITI Aayog emphasises that the Investment Friendliness Index is intended not merely as a ranking exercise but as a long-term reform tool that encourages peer learning, adoption of best practices, and continuous policy improvements across States and Union Territories.
By promoting transparency, regulatory efficiency, and healthy competition among States, the Index is expected to strengthen India’s position as a preferred global investment destination while supporting inclusive and sustainable economic growth.
Key Highlights
| Parameter | Details |
|---|---|
| Launching Agency | NITI Aayog |
| Coverage | 28 States and 8 Union Territories |
| Indicators | 84 |
| Assessment Pillars | 8 |
| Top Five Overall | Gujarat, Maharashtra, Tamil Nadu, Goa, Odisha |
| Large States Leader | Gujarat |
| Hilly & NE Leader | Uttarakhand |
| UT & City States Leader | Goa |
| Purpose | Benchmark investment ecosystems and accelerate reforms |
| Objective | Support Viksit Bharat @2047 through stronger State-level investment climates |
Why It Matters
The Investment Friendliness Index marks a shift from measuring only ease of doing business to evaluating the overall quality of investment ecosystems. By integrating infrastructure, governance, financial health, environmental resilience, and investor experience into a single framework, it provides States with a roadmap for attracting greater domestic and foreign investment and enhancing India’s global competitiveness.
