Gujarat, Maharashtra, Tamil Nadu, Goa and Odisha. Those are the five names NITI Aayog put at the top of its new Investment Friendliness Index, a report that grades how well Indian states and union territories attract money.
The idea goes back to July 2024, when the Prime Minister asked NITI Aayog, at the 9th Governing Council Meeting, to prepare an Investment-Friendly Charter listing the policies and processes needed to draw investment. The Union Budget for 2025-26 then announced the index itself.
How it works
The index covers all 28 states and 8 union territories. It scores them on eight pillars and 84 indicators, mixing secondary data with a primary survey of investors about their own experience. Based on the overall scores, each state or territory lands in one of four categories. Besides the five Top Performers, 15 states were named Frontrunners, and eight states or territories each fell into the Emerging Performers and Aspiring States groups.
NITI Aayog also ranked places within three peer groups, so that a hill state is not set against an industrial giant. Among Large States, Gujarat came first, then Maharashtra and Tamil Nadu, the same three that lead the overall table. Uttarakhand topped the Hilly and North-Eastern States group, followed by Assam and Himachal Pradesh. In the City States and Union Territories group, Goa was first, with Delhi and Chandigarh behind it.
What NITI Aayog says it is for
The report argues that national reforms set the broad direction, but state governments shape the investment climate through infrastructure, regulation, institutions and predictable policy. The index is meant to encourage what the report calls competitive and cooperative federalism, with states picking up best practices and pursuing reforms.
Each state gets a profile that benchmarks it against comparable peers, flags areas needing policy attention and draws on the investor survey. NITI Aayog says the profiles are meant as practical tools for policymakers, and for investors trying to read the climate in different states.
The full report is available on the NITI Aayog website.
