Top 5 Indian states contribute nearly 50% of India’s GDP

A new whitepaper by Client Associates highlights widening economic disparities across Indian states, with the top five states contributing nearly half of India’s GDP while the bottom ten account for just 3%.

Written by Kushan Shah

May 19, 2026 22:18 IST

The report shows Maharashtra remains India’s largest state economy, while Tamil Nadu and Uttar Pradesh are among the fastest-growing states amid rising FDI concentration in a handful of regional hubs.

A whitepaper from Client Associates Private Wealth Management highlights a sharp economic divide across the Indian states as the top five states: Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka and Gujarat contribute about 48% of India’s GDP, with Maharashtra alone contributing 13.3%. Meanwhile, the bottom ten states account for only 3% of the national GDP.

In terms of year-on-year growth, Tamil Nadu has recorded the highest growth of 16% on a YoY basis while Uttar Pradesh posted a growth CAGR of 15.3% over a period of five years.

The average per capita income stands at Rs 2.58 lakh for the entire country, with 16 states exceeding this figure. Sikkim, Goa and Delhi have the highest per capita incomes while Bihar has the lowest at Rs 69,321. Uttar Pradesh and Bihar contribute 27% to the national population and have also recorded high headcount in terms of people living below the poverty line.

Tracking India’s FDI inflows

India’s FDI inflows stood at Rs 4.22 lakh crore in FY25, marking a 14.7% YoY increase. However, the FDI inflows were highly concentrated in five states – Maharashtra, Delhi, Karnataka, Gujarat and Tamil Nadu – which accounted for 83.3% of the inflows. Tamil Nadu and Haryana emerged as fast-rising FDI destinations, while Uttar Pradesh and Rajasthan are increasingly becoming investment hubs driven by policy reforms and infrastructure development.

The whitepaper also categorized Indian states into four categories: Established anchors (Gujarat, Karnataka, Maharashtra and Tamil Nadu), high-potential performers (Delhi, Telangana, Andhra Pradesh, Haryana and Odisha), reform opportunities (Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar, West Bengal and Kerala) and states where fiscal rehabilitation is needed (Punjab, Himachal Pradesh, Mizoram and Jammu & Kashmir).

While commenting on the whitepaper, Rohit Sarin, Co-founder, Client Associates said, “India’s growth story remains concentrated among a handful of states, with a few economies growing at over 10% while others continue to pull the national growth rate closer to 7%.

The real opportunity lies in expanding economic momentum beyond the top growth states. If more states accelerate reforms, industrialization and investment attraction, India has the potential to move towards double-digit growth. Achieving this will require stronger private sector participation, sustained capex and deeper reforms to attract larger global capital flows.”

This article was first uploaded on May nineteen, twenty twenty-six, at eighteen minutes past ten in the night.