New Delhi – Gujarat has been named the top-performing state in the NITI Aayog's latest Investment Friendliness Index, a comprehensive study evaluating states on their capacity to attract and facilitate investments. The report, released on Friday, July 17, 2026, positions Maharashtra and Tamil Nadu as strong contenders, securing the second and third spots respectively.
State Performance Highlights
Gujarat achieved a score of 56.6 out of 100, largely attributed to its efficient port operations and a competitive power sector that ensures reliable electricity and a conducive business environment. Following closely, Maharashtra scored 53.7, excelling in attracting significant private equity and venture capital (PE/VC) investments, alongside hosting the highest number of Atal Tinkering Labs (ATLs), supported by robust economic indicators.
Tamil Nadu, with a score of 53.3, demonstrated strong performance in both infrastructure and business climate. Its high ranking is driven by efficient port operations, a near 100% memorandum of understanding (MoU) conversion rate, and impressive export figures, according to the NITI Aayog report. Other states in the top five included Goa and Odisha, followed by Delhi, Madhya Pradesh, and Andhra Pradesh.
Purpose of the Index
NITI Aayog Vice Chairman Ashok Lahiri emphasized that the Investment Friendliness Index should not be viewed merely as a competitive ranking. Instead, it serves as a critical indicator for states to assess their performance and identify areas for improvement. "This is not a ranking exercise. It is an exercise to tell states where they are doing well and where they are not doing so well," Lahiri stated.
Lahiri underscored the vital role of investments in sustaining and accelerating India's economic growth momentum, noting that the country's current investment rate is below 25% of GDP. He highlighted that both consumption and investments are crucial drivers for boosting demand and overall economic prosperity.
Evaluation Parameters and Categories
The Investment Friendliness Index is built upon seven key parameters, or pillars, designed to provide a holistic view of a state's investment climate:
- Infrastructure
- Business Climate
- Resources
- Government Policy
- Regulatory Ease
- Institutional Environment
- Financial Health
- Environmental Resilience
To ensure fair comparison, states are categorized into three distinct groups: large states, hilly and Northeastern states, and Union Territories and city states. Within these categories, Gujarat led in infrastructure and financial health, while Maharashtra topped the business climate segment. Odisha demonstrated strength in resources, Madhya Pradesh excelled in government policy, and Chhattisgarh performed best in institutional environment and regulatory ease. Tamil Nadu was recognized for its superior environmental resilience.
The development of this index followed Prime Minister Narendra Modi's call for an investment-friendly charter for states during the ninth Governing Council meeting of the NITI Aayog, a commitment later reinforced in the Union Budget 2025-26.