NITI Aayog Investment Friendliness Index: Gujarat, Maharashtra Lead
UPSC / SSC current affairs note · Economy
Why in news
NITI Aayog released its first-ever Investment Friendliness Index on July 18, 2026, ranking states on their ability to attract and sustain investments. Gujarat and Maharashtra emerged as top performers among large states, while Goa led among city states and UTs. The index was announced by Finance Minister Nirmala Sitharaman in the 2025-26 Budget.
Background
The index covers all 36 states and Union Territories, categorizing them into large states, hilly and northeastern states, and city states & UTs. It is based on eight pillars and 90 indicators, including infrastructure, business climate, regulatory ease, and environmental resilience. The index also incorporates feedback from 1,850 investors.
Key facts
Gujarat scored 56.6, Maharashtra 53.7, Tamil Nadu, Goa, and Odisha also scored above 50 among large states.
Among hilly and northeastern states, Uttarakhand (47.5) topped, followed by Assam (47.3) and Himachal Pradesh (46.1).
Among city states and UTs, Goa (53.1) led, followed by Delhi (49.9) and Chandigarh (47.1).
The index uses eight pillars: infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health, and environmental resilience.
States are classified into four categories: top performing (above 50), frontrunners (45-50), emerging performers (40-45), and aspiring states (below 40).
Gujarat's top rank is attributed to efficient port operations, favourable business climate, and competitive power sector.
Maharashtra excelled due to its ability to attract significant PE/VC investments and strong economic indicators.
NITI Aayog Vice Chairperson Ashok Lahiri emphasized that the index is not a 'pure race' but a tool for improvement.
Prelims pointers
- NITI Aayog
- Investment Friendliness Index
- Eight pillars: infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health, environmental resilience
- 90 indicators
- 1,850 investor responses
- Categories: top performing (>50), frontrunners (45-50), emerging performers (40-45), aspiring states (<40)
- Large states: Gujarat (56.6), Maharashtra (53.7)
- Hilly & NE: Uttarakhand (47.5), Assam (47.3), Himachal Pradesh (46.1)
- City states & UTs: Goa (53.1), Delhi (49.9), Chandigarh (47.1)
Mains angles
- Discuss the significance of the Investment Friendliness Index in improving ease of doing business and attracting investments.
- Critically examine the role of state-level policies and infrastructure in fostering a conducive investment climate.
- Analyze how the index can help identify gaps and promote competitive federalism among states.