Gujarat has emerged as India’s most investment-friendly state in the first-ever Investment Friendliness Index (IFI) 2026 released by NITI Aayog, ahead of Maharashtra and Tamil Nadu. The new index is designed to benchmark how effectively states and Union Territories create an environment that attracts, facilitates, and sustains private investment, while encouraging healthy competition among them to improve their investment ecosystems.
The index evaluates all 28 states and 8 Union Territories across multiple pillars, including infrastructure, business climate, regulatory environment, governance, financial health, resource availability, environmental resilience, and institutional effectiveness. NITI Aayog said the framework aims to support the vision of Viksit Bharat 2047 by helping states identify strengths, address policy gaps, and adopt best practices from leading performers.
Gujarat Leads the Rankings
Gujarat secured the top position due to its strong performance across key investment indicators, including infrastructure, regulatory efficiency, governance quality, and fiscal health. The state has consistently attracted significant domestic and foreign investment through its industrial ecosystem, ports, manufacturing base, and business-friendly policies.
The top five performers in the inaugural index are:
- Gujarat
- Maharashtra
- Tamil Nadu
- Goa
- Odisha
At the other end of the rankings, Lakshadweep, Ladakh, and the Andaman & Nicobar Islands were the lowest-ranked performers.
Top Five States in the Investment Friendliness Index 2026
| Rank | State |
|---|---|
| 1 | Gujarat |
| 2 | Maharashtra |
| 3 | Tamil Nadu |
| 4 | Goa |
| 5 | Odisha |
How the Index Measures Investment Friendliness
The Investment Friendliness Index moves beyond traditional ease-of-doing-business rankings by assessing the overall investment ecosystem rather than focusing solely on regulatory reforms.
The framework evaluates states across eight major pillars:
- Infrastructure quality.
- Business and investment climate.
- Regulatory and governance framework.
- Institutional effectiveness.
- Financial health.
- Availability of resources.
- Government policy support.
- Environmental resilience.
This broader approach aims to capture the long-term attractiveness of states for investors and identify areas requiring policy improvements.
Assessment Parameters
| Category | Focus Area |
|---|---|
| Infrastructure | Connectivity, logistics, utilities |
| Business climate | Ease of investment and operations |
| Governance | Policy implementation and transparency |
| Financial health | Fiscal sustainability |
| Institutional framework | Administrative effectiveness |
| Resources | Availability of land, labour and utilities |
| Environmental resilience | Sustainable development practices |
| Regulatory environment | Business approvals and compliance |
Why Gujarat Ranked First
Gujarat’s leading position reflects its long-standing strengths in industrial development and investment promotion.
The state benefits from:
- Well-developed industrial corridors.
- Strong port and logistics infrastructure.
- Large manufacturing ecosystem.
- Stable regulatory environment.
- Robust fiscal management.
- Consistent investment promotion policies.
These factors have helped Gujarat remain one of India’s largest destinations for domestic and foreign direct investment across sectors such as chemicals, petrochemicals, automobiles, engineering, pharmaceuticals, and renewable energy.
Significance of the New Index
The Investment Friendliness Index is intended to become a benchmarking tool for policymakers, enabling states to compare their performance against peers and adopt reforms that improve investor confidence.
Unlike earlier rankings focused mainly on regulatory reforms, the new framework takes a more comprehensive view of what influences investment decisions, including infrastructure, governance, fiscal strength, and institutional capacity. NITI Aayog expects the rankings to encourage greater policy innovation and healthy competition among states while supporting India’s broader economic growth ambitions.
Looking Ahead
The launch of NITI Aayog’s first Investment Friendliness Index marks a significant step in measuring and improving India’s investment climate at the state level. Gujarat’s top ranking highlights the benefits of sustained investments in infrastructure, governance, and industrial development, while Maharashtra and Tamil Nadu continue to demonstrate strong competitiveness as major investment destinations.
As states study their performance and implement reforms based on the index, the rankings are expected to play an increasingly important role in shaping investment policies, attracting private capital, and advancing India’s goal of becoming a developed economy by 2047.
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