NITI Aayog has launched its first-ever Investment Friendliness Index 2026, designed to serve as a reform tool rather than merely rank state performance, as reported by ANI. The index combines public data with investor perception surveys to provide states with a roadmap for improving investment competitiveness. According to the latest report, achieving the vision of Viksit Bharat by 2047 will require a sustained increase in productive investments, with state governments expected to play a larger role in improving ease of doing business, infrastructure, policy predictability and regulatory efficiency to attract domestic and global investors. The index is expected to help governments benchmark their performance, identify policy gaps and adopt best practices to continuously improve their investment climate, supporting India's long-term development goals. As per Business Standard, the NITI Aayog's investment index highlights wide disparities among states, underscoring the need for governance reforms, stronger institutions and balanced regional growth.
The Investment Friendliness Index 2026 uses 84 indicators across eight key pillars to rank Indian states on a 100-point scale, with Gujarat topping the list with a score of 56.6 out of 100, followed by Maharashtra at 53.7 and Tamil Nadu at 53.3. The pillars include Infrastructure (25% weight), Business Climate (20%), Resources (15%), Government Policy (10%), Regulatory Ease (12%), Financial Health (7%), Institutional Environment (6%), and Environmental Resilience (5%). According to Business Standard, no state performed consistently across all eight pillars. Some states perform strongly in specific areas such as infrastructure, regulatory ease or environmental resilience, but weaker institutional capacity or business facilitation often offsets these gains. Even the best-performing states have scores that are only a little over the halfway mark, suggesting that even India's leading investment destinations have substantial distance to cover. The report notes that states that have strengthened investor facilitation through measures such as single-window clearance systems, dedicated investor grievance redressal mechanisms and plug-and-play industrial infrastructure have reported higher capital commitments and faster project execution, highlighting the importance of institutional responsiveness alongside industrial capacity.
According to the latest NITI Aayog report, private investors repeatedly cite land availability, labour law flexibility and power reliability — all under state control — as the top three factors dictating their investment decision. As per NITI Aayog, tax breaks and subsidy packages are not what tip the scale for most private investors deciding where to set up shop in India. The Investment Friendliness Index 2026 draws on a survey of 1,850 investors across all 36 states and union territories, asking directly what actually shapes their investment choices. Speed of execution emerges as one of the report's clearest points of differentiation between states. The report notes that states that have implemented single-window systems have cut approval times to under 30–60 days from 6–18 months, making those preferred investment destinations. This represents roughly a tenfold reduction in wait times, though the report clarifies this applies specifically where single-window clearance systems are functioning as intended, rather than existing only on paper.
The Investment Friendliness Index 2026 identifies Gujarat's policy stability and investor-centric governance as among the State's biggest strengths. The Industrial Extension Bureau (iNDEXTb) provides investors with end-to-end facilitation through its single-window system, making the process of setting up businesses faster, simpler and more transparent. The State also offers a well-defined and time-bound framework for securing statutory approvals and No Objection Certificates (NOCs), enabling projects to move from proposal to implementation with minimal delays. According to the Index, restrictions on strikes in essential services have helped maintain industrial peace, resulting in negligible labour disruptions and providing businesses with a stable and predictable operating environment. Gujarat's world-class industrial infrastructure continues to be one of the State's strongest competitive advantages. Industrial hubs such as Dholera Special Investment Region (SIR), GIFT City, Sanand, Dahej, Jhagadia and Saykha offer world-class plug-and-play facilities, allowing industries to establish operations quickly and efficiently. This integrated industrial ecosystem has significantly improved project execution timelines while reducing the time and cost involved in setting up new businesses.
The Index recognises Gujarat's power sector as another major strength supporting industrial growth. Industrial consumers in Gujarat benefit from electricity tariffs that are nearly 29% lower than the national average. The State also provides an average of 23.8 hours of power supply every day, exceeding the average among major States. Competitive electricity tariffs, coupled with reliable power availability, have helped industries lower operating costs while improving productivity and business efficiency. Gujarat's export prowess is further demonstrated by its 31% share in India's merchandise exports, reinforcing its position as a key manufacturing hub. The state's strong MSME ecosystem and fiscal prudence have contributed significantly to its investment growth trajectory, making it a preferred destination for both domestic and international investors.
