New Delhi (18.07.2026): NITI Aayog has released the report titled "Investment Friendliness Index (IFI)", which presents a structured and data-driven framework for assessing how effectively States and Union Territories create, enable, and sustain an environment conducive to investments. The Index evaluates key policy, institutional, regulatory, and infrastructure-related parameters that influence investment decisions and provides a comparative assessment of the investment ecosystem across States and Union Territories.
During the 9th Governing Council Meeting of NITI Aayog held in July 2024, Prime Minister Narendra Modi tasked NITI Aayog with preparing an Investment-Friendly Charter comprising key policies, programmes, and processes required to attract investments. Subsequently, the Union Budget 2025–26 announced the development of an Investment Friendliness Index to strengthen the spirit of competitive and cooperative federalism by promoting reforms and fostering a conducive investment ecosystem across States.
The report underscores that while national-level reforms provide the overarching policy direction for economic growth, State Governments play a pivotal role in shaping the investment climate through robust infrastructure, efficient regulatory frameworks, effective institutions, and predictable policy regimes. Strengthening these State-level investment ecosystems is essential for enhancing India's competitiveness, attracting greater domestic and foreign investment, and sustaining high economic growth. The Investment Friendliness Index seeks to foster competitive and cooperative federalism by encouraging States and Union Territories to adopt best practices and undertake continuous reforms in pursuit of the vision of Viksit Bharat @2047.
Why the Investment Friendliness Index Matters
India has witnessed sustained economic growth over the past three decades and is now on the path towards becoming a developed nation under the vision of Viksit Bharat @2047. Achieving this aspiration will require a significant increase in investment rates, with private investment expected to play a pivotal role in driving industrialisation, innovation, employment generation, and long-term economic growth.
While reforms undertaken by the Central Government establish the overarching policy and macroeconomic framework, investment decisions are ultimately influenced by the quality of the business environment at the State level. Factors such as availability of industrial land, quality of physical and digital infrastructure, regulatory efficiency, institutional capacity, and policy predictability are critical determinants of investment attractiveness. Recognising the central role of States in fostering a conducive investment climate, the Investment Friendliness Index (IFI) has been developed as a structured and evidence-based framework to benchmark investment ecosystems across States and Union Territories.
Beyond ranking performance, the IFI serves as a catalyst for reforms by identifying strengths, highlighting areas for improvement, promoting the adoption of best practices, and encouraging peer learning. By fostering healthy competition and cooperative federalism, the Index aims to support continuous improvements in the investment climate and strengthen India's competitiveness as a preferred investment destination.
