Gujarat Leads India’s First Investment Friendliness Index

NITI Aayog Launches First Investment Friendliness Index

Gujarat Leads India’s First Investment Friendliness Index: The NITI Aayog has introduced the Investment Friendliness Index (IFI) to assess the investment readiness of all 36 States and Union Territories. The index evaluates how conducive each region is for attracting and sustaining investments through governance, infrastructure, and policy-related parameters.

The objective of the index is to help governments identify strengths and weaknesses, encouraging reforms that improve the investment ecosystem rather than creating competition among states.

Static GK Fact: NITI Aayog was established on 1 January 2015, replacing the Planning Commission, and serves as the Government of India’s premier public policy think tank.

What Is the Investment Friendliness Index

The Investment Friendliness Index (IFI) is a benchmarking framework designed to measure the overall investment climate across States and Union Territories.

The assessment is based on 84 indicators grouped under eight key pillars, providing a comprehensive evaluation of governance, infrastructure, regulatory systems, and economic readiness.

The first edition revealed that no State or Union Territory scored above 60 out of 100, indicating significant scope for improving India’s investment environment.

Gujarat Emerges as the Best Large State

Gujarat secured the highest score of 56.6 among the 17 large states, making it the top-performing state in India’s first Investment Friendliness Index.

The state’s strong performance was driven by:

• High-quality infrastructure
• Reliable power supply
• Efficient port connectivity
• Strong industrial ecosystem

The top four large states are:

• Gujarat
• Maharashtra
• Tamil Nadu
• Odisha

Top Performers Across Different Categories

The index classified States and Union Territories into different categories based on their scores.

Among Hill and North Eastern States, Uttarakhand ranked first with a score of 47.5, followed by Assam and Himachal Pradesh.

Among City States and Union Territories, Goa secured the top position with a score of 53.1, followed by Delhi and Chandigarh.

Only five jurisdictions crossed the 50-point mark, earning the status of Top Performers:

• Gujarat
• Goa
• Maharashtra
• Tamil Nadu
• Odisha

Eight Pillars of Assessment

The Investment Friendliness Index measures investment readiness using eight major pillars:

• Infrastructure
• Business Climate
• Resources
• Government Policy
• Regulatory Ease
• Financial Health
• Institutional Environment
• Environmental Resilience

These pillars collectively determine how attractive a region is for domestic and global investors.

Leaders in Individual Performance Areas

Different States excelled in different pillars of the index.

• Infrastructure: Chandigarh (overall), Gujarat (large states)
• Business Climate: Maharashtra
• Resources: Goa (overall), Odisha (large states)
• Government Policy: Madhya Pradesh
• Regulatory Ease: Chhattisgarh

The results indicate that no single State dominated every category, highlighting diverse strengths across India.

Purpose Behind the Index

According to NITI Aayog Vice Chairman Ashok Lahiri, the Investment Friendliness Index is intended as a diagnostic tool rather than a competitive ranking.

The index provides evidence-based feedback to help States improve governance, simplify regulations, strengthen infrastructure, and attract greater investment.

These reforms are expected to contribute significantly towards achieving the vision of Viksit Bharat through stronger state-level economic development.

Static GK Tip: Ease of Doing Business (EoDB) reforms aim to simplify business regulations, reduce compliance burden, and promote investment-led economic growth.

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Gujarat Leads India’s First Investment Friendliness Index: