Catalyzing State-Level Growth: How the Investment Friendliness Index Drives Capital to India’s States

PARTHA ROY, KOLKATA: As India pursues its vision of “Viksit Bharat @2047” , NITI Aayog has launched the **Investment Friendliness Index (IFI)**—a data-driven framework designed to benchmark, enable, and accelerate state-level economic reforms. Commissioned following the 9th Governing Council Meeting and backed by the Union Budget, this strategic tool places India’s 28 states and 8 Union Territories at the heart of the nation’s growth trajectory.

While central policies establish overarching economic stability, final investment decisions depend heavily on ground-level state realities. The IFI evaluates jurisdictions across **eight vital pillars**, including regulatory ease, infrastructure, institutional environment, and environmental resilience. By blending 84 primary and secondary indicators with direct investor feedback, the index provides an authentic reflection of the business climate.

The initial rankings categorize states into four tiers, with **Gujarat, Maharashtra, Tamil Nadu, Goa, and Odisha** emerging as overall Top Performers. To ensure equitable comparison across varied topographies, the report also evaluates peer groups: Uttarakhand leads the Hilly and North-Eastern States, while Goa tops the City States and Union Territories.

More than a ranking system, the IFI serves as a catalyst for continuous improvement. By highlighting specific operational strengths and policy bottlenecks through detailed state profiles, it fosters healthy competition and peer learning. Ultimately, the Investment Friendliness Index transforms state ecosystems into transparent, predictable environments, driving both domestic and foreign capital to power India’s long-term economic expansion.