Gujarat topped the overall rankings with a score of 56.6.
Which Indian states are most investor friendly? Gujarat, Maharashtra and Tamil Nadu secured the top three positions in the NITI Aayog Investment Friendliness Index of states and union territories (UTs), according to the report released on Friday.At the other end of the rankings, Lakshadweep emerged as the lowest performer, followed by Ladakh and Andaman and Nicobar Islands.The index assesses states and union territories across eight key pillars: infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, fiscal health and environmental resilience, according to PTI.The report, released by NITI Aayog Vice-Chairman Ashok Kumar Lahiri, classifies the classification into three groups – large states, hilly and north-eastern states, city states and union territories.
How did the countries perform?
Gujarat topped the overall rankings with a score of 56.6. Its leadership position has been supported by strong performance in infrastructure, business climate, financial health, regulatory ease and government policy, while the report identified resources, institutional environment and environmental resilience as areas where the country has room for improvement.According to the report, Gujarat’s high infrastructure score reflects the efficiency of the port and power sector, supported by competitive electricity tariffs for industrial and commercial users, as well as well-managed transmission and distribution losses.
Maharashtra ranked second among the major states and in the overall national rankings, with an overall score of 53.7.According to NITI Aayog, Maharashtra’s ranking is primarily supported by its outstanding performance in the business climate pillar. The state’s performance was also strong in the resources and fiscal health categories, while infrastructure and ease of regulation were identified as areas with room for improvement.Tamil Nadu ranked third at the national level as well as among major states, with a total score of 53.3. Its ranking was driven by strong performance in the infrastructure and business climate pillars, while financial health was highlighted as an area for improvement.Among the major states, Bihar, Jharkhand and West Bengal occupied the bottom three positions. Odisha, Madhya Pradesh and Andhra Pradesh ranked fourth, fifth and sixth respectively.In the category of hilly and north-eastern states, Uttarakhand, Assam and Himachal Pradesh occupied the top three positions.Releasing the report, NITI Aayog Vice Chairman Ashok Kumar Lahiri said India’s investment rate is about 25%, which is lower than that of China during the period when its economy was expanding rapidly.“In the past few years, India has been the fastest growing major economy. Investments play a major role in economic growth.
India needs more investments as it also boosts demand.“As we aspire to realize the Vixit Bharat Vision @ 2047, our challenge is not only to sustain high rates of economic growth but also to ensure that this growth is broad-based, resilient and productivity-driven,” he said.Lahiri said achieving this ambition will require a significant acceleration in investments that expand production capacity, boost industrialization, create good jobs, and foster innovation.The index evaluates all 28 states and eight union territories, and examines the factors that enhance a state’s attractiveness for investment and the obstacles faced by investors.The Union Budget 2025-26 announced the establishment of the Investment Friendship Index with the aim of strengthening competitive and cooperative federalism by encouraging reforms and promoting a more conducive investment ecosystem across states.
