NITI Aayog has released its comprehensive Investment Friendliness Index (IFI) report, presenting a structured framework for assessing how effectively Indian states and union territories create and sustain conducive investment environments. The index was developed in response to the Prime Minister's directive during the July 2024 Governing Council Meeting and formalized through the Union Budget 2025–26 announcement.
The IFI evaluates all 28 states and 8 union territories across eight critical pillars: Infrastructure, Business Climate, Resources, Government Policy, Regulatory Ease, Institutional Environment, Financial Health, and Environmental Resilience. The framework comprises 84 indicators that incorporate both secondary data and perception-based measures from primary investor surveys, providing a comprehensive assessment of state-level investment ecosystems.
States and UTs have been classified into four performance categories based on their overall scores: Top Performers (scores above 50), Frontrunners (45–50), Emerging Performers (≥40 – <45), and Aspiring States (below 40). Gujarat, Maharashtra, Tamil Nadu, Goa, and Odisha emerged as the Top Performers in the overall index. Additionally, 15 states were classified as Frontrunners, while eight states/UTs each were placed in the Emerging Performers and Aspiring States categories.
The report employs a peer-group approach to ensure equitable comparisons, categorizing states into three groups: Large States, Hilly and North-Eastern States, and Union Territories and City States. Among Large States, Gujarat secured first rank followed by Maharashtra and Tamil Nadu. In the Hilly and North-Eastern States category, Uttarakhand emerged as the highest-ranked state followed by Assam and Himachal Pradesh. Among City States and Union Territories, Goa secured the top position followed by Delhi and Chandigarh.
Detailed State Profiles provide comprehensive analysis of each jurisdiction's performance across the eight pillars, benchmarking against peer states with comparable geographic and administrative characteristics. These profiles highlight key indicators, identify areas requiring policy attention, and incorporate insights from investor perception surveys to reflect on-ground business experiences.
The Investment Friendliness Index is designed as a strategic reform instrument rather than merely a periodic assessment exercise. It aims to foster competitive and cooperative federalism by encouraging states and UTs to adopt best practices and undertake continuous reforms. The ultimate objective is to strengthen India's competitiveness as a preferred investment destination and support inclusive, sustainable economic growth toward the Viksit Bharat @2047 vision.