For their efforts in fostering an environment conducive to investment and economic development, the Indian states of Gujarat, Maharashtra, Tamil Nadu, Goa, and Odisha have been named Top Performers in the nation’s first Investment Friendliness Index (IFI), which was announced by NITI Aayog. The goal of the index, which was unveiled in the Union Budget 2025-26, is to encourage changes that enhance the investment ecosystem in the states and union territories, thus strengthening competitive and cooperative federalism.
Jammu and Kashmir was one of 28 states and 8 union territories evaluated in the Investment Friendliness Index for their capacity to establish, facilitate, and maintain an investment-friendly environment. Important factors that were considered in the assessment included the following: infrastructure, business climate, human and natural resources, regulatory ease, institutional environment, financial health, and environmental resilience.
All fifty states and the Union Territories were divided into four groups according to their total performance. A score of 50 or more was achieved by Top Performers, while scores of 45–50 were recorded by Frontrunners. The states were categorised as Aspiring States if their scores were below 40 and Emerging Performers if their scores were between 40 and 45. In addition to the five states that performed best, fifteen were named frontrunners, and eight states and territories were named emerging performers or aspirant states.
In order to make sure that everyone’s opinions are heard, NITI Aayog classified the states and union territories according to their size, economic significance, and administrative setting: Large States, Hilly and North-Eastern States, and Union Territories and City States. Out of all the states in the country, Gujarat, Maharashtra, and Tamil Nadu topped the list of Large States.
In terms of hilly and northeastern states, Uttarakhand came out on top, with Assam and Himachal Pradesh following closely behind. Goa, Jammu & Kashmir, Delhi, and Chandigarh were the top three Union Territories and City States, which is a reflection of the robust investment ecosystems and governance frameworks in these places.
While federal policies spell out broad goals, the study notes that state governments must step up to the plate to entice investment with sound policies, clear regulations, effective institutions, and high-quality infrastructure. In order to achieve the goals of Viksit Bharat @2047, the Investment Friendliness Index is supposed to boost India’s competitiveness, promote best practices’ adoption, and stimulate ongoing changes.
Promoting changes that enhance the ease of doing business, attract investments, and promote inclusive economic growth across India is the goal of the newly launched Investment Friendliness Index, which also serves as a benchmark for healthy competition amongst states.
Image: The Print
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