NITI Aayog on Friday released the Investment Friendliness Index (IFI), a data-driven framework to assess how effectively states and Union Territories create an enabling environment for investments. The index aims to strengthen competitive and cooperative federalism by benchmarking state-level reforms and encouraging the adoption of best practices.
The report follows Prime Minister Narendra Modi’s direction during the 9th Governing Council Meeting of NITI Aayog in July 2024 to prepare an Investment-Friendly Charter. The Union Budget 2025-26 subsequently announced the development of the Investment Friendliness Index to promote reforms that improve the investment climate across states.
The IFI evaluates all 28 states and eight Union Territories across eight pillars—Infrastructure, Business Climate, Resources, Government Policy, Regulatory Ease, Institutional Environment, Financial Health, and Environmental Resilience. The framework is based on 84 indicators, combining secondary data with investor perception surveys to provide a comprehensive assessment of state-level investment ecosystems.
According to the report, Gujarat, Maharashtra, Tamil Nadu, Goa and Odisha have emerged as the top performers in the overall rankings. Fifteen states have been classified as Frontrunners, while eight states and Union Territories each fall under the Emerging Performers and Aspiring States categories.
The assessment also groups states and Union Territories into three peer categories to ensure fair comparisons based on geography and administrative context. Gujarat ranked first among Large States, followed by Maharashtra and Tamil Nadu. Uttarakhand topped the Hilly and North-Eastern States category, ahead of Assam and Himachal Pradesh. Goa secured the highest rank among Union Territories and City States, followed by Delhi and Chandigarh.
NITI Aayog said the index recognises the critical role of states in attracting investments through robust infrastructure, efficient regulations, strong institutions and predictable policy frameworks. While national-level reforms provide the overall policy direction, investment decisions are significantly influenced by the quality of the business environment at the state level.
Beyond ranking states, the report seeks to identify strengths, highlight reform priorities and facilitate peer learning. It is designed to serve as a strategic reform tool that encourages continuous improvements in investment ecosystems and enhances India’s competitiveness as an investment destination.
The report also includes detailed state profiles, benchmarking each state’s performance against comparable peers. These profiles combine objective indicators with investor feedback to identify policy gaps, reform opportunities and the on-ground business experience.
NITI Aayog said the Investment Friendliness Index is intended to support the vision of Viksit Bharat@2047 by helping states strengthen their investment ecosystems, attract greater domestic and foreign investment, and drive sustainable, inclusive economic growth.
