Investment Friendliness Index 2026: Gujarat Tops NITI Aayog Rankings

Context:

Recently, NITI Aayog has released the first-ever Investment Friendliness Index (IFI) 2026, which evaluates the ability of Indian states and Union Territories (UTs) to attract and sustain investments. Gujarat emerged as the most investment-friendly state among large states, followed by Maharashtra and Tamil Nadu.  

Key Findings of the Index:

• • • According to the Investment Friendliness Index 2026, Gujarat secured the top position among large states with a score of 56.6 out of 100. Maharashtra ranked second with 53.7 points, while Tamil Nadu stood third with 53.3 points.
    • In the category of hilly and North-Eastern states, Uttarakhand topped the rankings, followed by Assam and Himachal Pradesh. Among Union Territories and city states, Goa secured the first position, followed by Delhi and Chandigarh.
    • The index assessed all 28 states and 8 Union Territories based on their capacity to create a favourable environment for investment.

About Investment Friendliness Index:

• • • The Investment Friendliness Index is not intended merely as a ranking system. NITI Aayog has described it as a strategic reform tool that helps states identify policy gaps, improve governance and strengthen their investment ecosystem.
    • The index aims to:
      • Encourage states to compete for private investment.
      • Promote sharing of best practices among states.
      • Improve ease of doing business.
      • Support evidence-based policymaking.
    • More than 1,850 investors were surveyed, and feedback from 165 stakeholders was incorporated to develop the framework.

Parameters of Evaluation:

• • • The index evaluates states on eight major pillars that determine investment readiness:
      • Infrastructure – 25%
      • Business Climate – 20%
      • Resources – 15%
      • Regulatory Ease – 12%
      • Government Policy – 10%
      • Financial Health – 7%
      • Institutional Environment – 6%
      • Environmental Resilience – 5%
    • The assessment combines publicly available economic data with investor perception surveys to provide a comprehensive picture of each state’s investment environment.

Significance of index for Indian Economy:

• • • This index strengthens the concept of Competitive Federalism, in which states strive to attract investments through better governance and effective policies.
    • Increased investment can lead to:
      • Growth in employment opportunities.
      • Promotion of the manufacturing sector.
      • Encouragement of innovation.
      • Acceleration of the pace of economic growth.
    • Additionally, this index can contribute to reducing regional disparities by helping states identify their weaknesses and implement necessary improvements.

Conclusion:

The Investment Friendliness Index 2026 provides a roadmap for states to enhance their investment potential. Gujarat’s achievement reflects the importance of infrastructure, policy stability and investor confidence. However, the larger objective of the index is not only competition but also cooperation, enabling all states to learn from each other and contribute to India’s vision of Viksit Bharat by 2047.