Investment Friendliness Index
Why in News?
NITI Aayog has released India’s first Investment Friendliness Index (IFI) 2026, ranking all 28 states and 8 UTs on how conducive their ecosystems are for investment.
Large States Category
- Top Performer: Gujarat secured the 1st rank nationally with an overall score of 56.6.
- Follow-up Leaders: Maharashtra (2nd) and Tamil Nadu (3rd) completed the top three slots.
- Other Top Tiers: Odisha, Madhya Pradesh, Andhra Pradesh, and Karnataka feature prominently in the top tier.
- Lowest Performers: Bihar, Jharkhand, and West Bengal ranked at the bottom of this category.
- Top Performer: Uttarakhand emerged as the highest-ranked state.
- Follow-up Leaders: Assam secured the 2nd position in this group, followed closely by Himachal Pradesh.
- Top Performer: Goa claimed the top position.
- Follow-up Leaders: Delhi took the 2nd spot, followed by Chandigarh in 3rd.
- Lowest Performers: Lakshadweep, Ladakh, and the Andaman & Nicobar Islands recorded the lowest overall scores.
- Promoting Competitive Federalism: Uses transparent peer pressure to motivate state governments to actively compete to attract private capital.
- Investor Decision Matrix: Serves as an authoritative, objective reference handbook for domestic and global corporations trying to identify optimal expansion hubs.
- Integrating Ground Realities: Melds secondary macroeconomic statistics with investor perception surveys covering over 1,850 active businesses.
- Targeting "Viksit Bharat @2047": Positions state-level economic progress as a primary growth engine needed to transition India into a fully developed economy.
The evaluation methodology, built in collaboration with CRISIL as a knowledge partner, assesses regions across 84 distinct indicators divided into eight pillars:
- Infrastructure: Focuses on physical connectivity, digital infrastructure, port operations, and power supply stability.
- Business Climate: Measures funding access, market depth, and private equity/venture capital attraction.
- Resources: Tracks the availability of industrial land, skilled labour, and raw materials.
- Government Policy: Evaluates long-term policy predictability, stability, and sector-specific incentives.
- Regulatory Ease: Assesses single-window clearance mechanisms, timelines, and bureaucratic hurdles.
- Institutional Environment: Examines contract enforcement capabilities, law and order, and local economic governance.
- Financial Health: Audits fiscal discipline, state-level revenue mobilization, and budgetary health.
- Environmental Resilience: Judges green investment practices, climate vulnerability, and ESG compliance standards.
