NITI Aayog Investment Friendliness Index 2025: Gujarat, Maharashtra, TN lead
Synopsis
India's first Investment Friendliness Index from NITI Aayog puts Gujarat, Maharashtra, and Tamil Nadu at the top — but the more telling detail is the bottom: eight states remain 'Aspiring', signalling a widening investment divide that national-level policy alone cannot close.
Key Takeaways
NITI Aayog released the first-ever Investment Friendliness Index (IFI) on 17 July , covering all 28 states and J&K .
Gujarat , Maharashtra , Tamil Nadu , Goa , and Odisha were named Top Performers with scores above 50 .
15 states were classified as Frontrunners (scores 45–50 ); 8 states remain Aspiring States (below 40 ).
Among Large States, Gujarat ranked first; Uttarakhand led Hilly and North-Eastern states; Goa topped Union Territories and City States.
The IFI was mandated under the 2025-26 Union Budget to advance the Viksit Bharat @2047 vision.
NITI Aayog on Friday, 17 July released India's first Investment Friendliness Index (IFI), ranking Gujarat, Maharashtra, Tamil Nadu, Goa, and Odisha as the country's top investor-friendly states. The index, which covers all 28 states and Jammu & Kashmir, was mandated under the 2025-26 Union Budget to strengthen competitive and cooperative federalism across India.
What the Index Measures
The IFI evaluates how effectively states and J&K create, enable, and sustain an environment conducive to investment. It assesses performance across eight parameters: infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health, and environmental resilience.
To account for India's diversity in geography, economic scale, and administrative context, states and J&K were divided into three peer groups — Large States, Hilly and North-Eastern States, and Union Territories and City States. This peer-group structure ensures that smaller or geographically constrained regions are not benchmarked unfairly against industrialised large states.
Top Performers and Rankings
Based on overall scores, states were classified into four tiers: Top Performers (scores above 50), Frontrunners (45–50), Emerging Performers (40–45), and Aspiring States (below 40). Gujarat, Maharashtra, Tamil Nadu, Goa, and Odisha secured Top Performer status, while 15 other states were classified as Frontrunners. The remaining states and J&K were split equally between Emerging Performers and Aspiring States, with eight each.
Among Large States, Gujarat ranked first, followed by Maharashtra and Tamil Nadu — the same three that topped the overall index. In the Hilly and North-Eastern category, Uttarakhand led, ahead of Assam and Himachal Pradesh. Among Union Territories and City States, Goa ranked first, followed by J&K, Delhi, and Chandigarh.
Why the Index Was Created
The IFI was announced as part of the 2025-26 Union Budget with the explicit goal of promoting reforms and fostering a conducive investment ecosystem across states. The report underscores that while national-level reforms provide overarching policy direction, state governments play a pivotal role in shaping the investment climate through infrastructure development, regulatory frameworks, effective institutions, and predictable policy regimes.
Notably, this is the first time India has attempted a comprehensive, multi-parameter ranking of states specifically on investment readiness — a departure from earlier, sector-specific or ease-of-doing-business assessments. The IFI is positioned as a tool to encourage states to benchmark against each other and adopt best practices continuously.
The Broader Goal: Viksit Bharat 2047
The index is explicitly linked to the government's Viksit Bharat @2047 vision — the ambition to make India a developed nation by the centenary of its independence. According to the report, strengthening state-level investment ecosystems is essential for enhancing India's global competitiveness, attracting greater capital flows, and sustaining high economic growth. How states respond to this ranking — and whether the index triggers genuine policy competition — will determine its long-term impact.
Point of View
The IFI's peer-group structure, while fair in intent, risks letting underperforming large states hide behind relative rankings. The real test is whether 'Aspiring States' — eight of them — receive targeted reform support, or whether this becomes another annual ranking that generates headlines without moving investment needles.
NationPress
17 Jul 2026
Frequently Asked Questions
What is the NITI Aayog Investment Friendliness Index?
The Investment Friendliness Index (IFI) is India's first comprehensive ranking of states and J&K on their ability to attract and sustain investment. Released on 17 July by NITI Aayog, it evaluates 28 states and J&K across eight parameters including infrastructure, regulatory ease, and financial health.
Which states topped the NITI Aayog IFI 2025?
Gujarat, Maharashtra, Tamil Nadu, Goa, and Odisha were declared Top Performers with scores above 50. Gujarat ranked first among Large States, Goa led among Union Territories and City States, and Uttarakhand topped the Hilly and North-Eastern category.
Why was the Investment Friendliness Index introduced?
The IFI was announced in the 2025-26 Union Budget to strengthen competitive and cooperative federalism by encouraging states to adopt best practices and undertake continuous reforms. It is aligned with the government's Viksit Bharat @2047 vision.
How are states categorised in the IFI?
States are divided into four performance tiers — Top Performers (above 50), Frontrunners (45–50), Emerging Performers (40–45), and Aspiring States (below 40) — and assessed within three peer groups: Large States, Hilly and North-Eastern States, and Union Territories and City States.
Which states are classified as Aspiring States in the IFI?
Eight states or union territories were classified as Aspiring States, meaning they scored below 40 on the IFI. The report does not name them individually in the summary, but the classification signals significant room for improvement in their investment ecosystems.
