Gujarat topped the Investment Friendliness Index (IFI) unveiled by government think tank NITI Aayog on Friday, reflecting its strong investment ecosystem and recognising the pivotal role of states in fostering a conducive business climate.
Gujarat secured the highest score of 56.6 out of 100, driven by efficient port operations, a competitive power sector ensuring reliable electricity supply, and an overall favourable business environment. Maharashtra followed with 53.7, backed by strong private equity and venture capital inflows, the highest number of Atal Tinkering Labs (ATLs), and robust economic indicators.
Tamil Nadu ranked third with a score of 53.3, benefiting from efficient port infrastructure, a near-100% memorandum of understanding (MoU) conversion rate and strong export performance. It was followed by Goa (53.1) and Odisha (52.4).
Among the large states, Bihar ranked last with a score of 41.2, with NITI Aayog noting significant scope for improvement in its business climate and financial health.
The index assesses all 28 states and eight Union Territories across eight parameters—Infrastructure, Business Climate, Resources, Government Policy, Regulatory Ease, Institutional Environment, Financial Health and Environmental Resilience—to benchmark the investment ecosystem across the country.
In the Hilly and North-Eastern States category, Uttarakhand emerged as the top performer, followed by Assam and Himachal Pradesh. Among City States and Union Territories, Goa ranked first, ahead of Delhi and Chandigarh.
According to NITI Aayog, India will need significantly higher investment rates to achieve its Viksit Bharat @2047 vision, with private investment expected to play a central role in driving industrialisation, innovation, job creation and long-term economic growth.
While reforms by the Centre provide the broader policy and macroeconomic framework, the quality of the business environment at the state level ultimately shapes investment decisions. Factors such as industrial land availability, physical and digital infrastructure, regulatory efficiency, institutional capacity and policy predictability are key determinants of investment attractiveness.
Beyond ranking states, the IFI is intended to serve as a reform tool by identifying strengths and gaps, promoting best practices, encouraging peer learning and fostering healthy competition among states. NITI Aayog said the index aims to support continuous improvements in the investment climate and strengthen India’s position as a preferred global investment destination.