NITI Aayog Investment Index: Gujarat, Maharashtra Lead

NITI Aayog’s first ‘Investment Friendliness Index’ is more than a mere ranking; it introduces a structural framework for understanding state economic appeal. Released on Friday, the index reveals Gujarat and Maharashtra as top performers, scoring above 50 on a 1-100 scale across 36 states and Union Territories. This new metric, introduced in the 2025-26 budget, offers a granular view into the underlying mechanisms that attract capital, moving beyond superficial metrics to deliver a deeper analysis.

The index operates on a comprehensive framework, dissecting state performance across eight critical pillars: infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health, and environmental resilience. This multi-dimensional assessment, incorporating feedback from 1,850 investors, captures the complex interplay of factors influencing investment decisions. It functions as a diagnostic tool, mapping the structural strengths and weaknesses of India’s diverse economic geographies, rather than merely listing outcomes.

Gujarat secured the leading position among large states with a score of 56.6, a performance driven by its efficient port operations, a consistently conducive business environment, and a competitive power sector. Maharashtra followed with 53.7, demonstrating particular strength in attracting private equity and venture capital investments, underpinned by robust economic indicators. These examples illustrate how specific structural advantages translate into higher investment friendliness scores, offering tangible proof of the framework’s utility.

Beyond the large states, Uttarakhand led the hilly and northeastern category with 47.5, while Assam scored 47.3 and Himachal Pradesh 46.1. In the city states and Union Territories segment, Goa emerged first with 53.1, surpassing Delhi (49.9) and Chandigarh (47.1). NITI Aayog Vice Chairperson Ashok Lahiri underscored that this index serves as a crucial tool for states to identify areas for enhancement rather than a competitive ranking, especially pertinent in the current geopolitical climate.

From a first-principles perspective, investor decisions are fundamentally shaped by predictable factors: the quality of infrastructure, regulatory certainty, the effectiveness of institutional frameworks, and the availability of skilled human capital. These elements represent the foundational layers upon which any robust investment ecosystem is built, directly aligning with the index’s pillars. Prime Minister Narendra Modi’s earlier calls for simplified compliance and enhanced investor feedback resonate with the structural adjustments the index aims to facilitate, reinforcing the importance of these core drivers.

To ensure relevant comparisons, states were strategically categorized into large states, hilly and northeastern states, and city states & UTs. Further granular analysis grouped them by performance: top-performing (above 50), frontrunners (45-50), emerging performers (40-45), and aspiring states (less than 40). This structured approach allows for targeted policy interventions, enabling states to benchmark against relevant peers and understand their relative positions within the broader investment landscape, fostering a more informed approach to economic policy.

The NITI Aayog’s Investment Friendliness Index offers a durable takeaway: economic development is not merely about attracting capital, but about systematically cultivating the underlying structural conditions that make a region inherently attractive. By providing a transparent, multi-faceted framework, the index empowers states to move beyond ad-hoc measures and instead focus on foundational improvements in governance, infrastructure, and regulatory predictability to foster sustainable, long-term growth.