In July 2026, NITI Aayog ranked every Indian state on how easy it is to invest there. Gujarat came first.
Must Know
The Investment Friendliness Index
What the IFI Is
- Full formIFI is the Investment Friendliness Index.
- BodyIt is a NITI Aayog report benchmarking how well states attract and sustain investment.
- LaunchNITI Aayog released it on 17 July 2026, India’s first such index.
Coverage
- ScopeIt covers all 28 states and 8 Union Territories.
Eight Pillars
- CountThe index evaluates states and UTs across 8 pillars.
- IndicatorThe framework uses 84 indicators, including an investor perception survey.
- Pillar 1Infrastructure: physical logistics, power supply and digital connectivity.
- Pillar 2Business Climate: how well single-window clearance works day to day.
- Pillar 3Resources: industrial land, skilled labour and raw materials.
- Pillar 4Government Policy: whether policy is stable and predictable.
- Pillar 5Regulatory Ease: how little bureaucratic friction appears in compliance and licensing.
- Pillar 6Institutional Environment: whether state bodies are capable, transparent and responsive.
- Pillar 7Financial Health: fiscal sustainability and macroeconomic stability.
- Pillar 8Environmental Resilience: sustainability and ecological compliance.
- WhyThe first three pillars capture where investor complaints most often cluster.
Good to Know
Origin and Classification
Origin
- IdeaThe idea traces to NITI Aayog’s 9th Governing Council Meeting in July 2024.
- BudgetThe Union Budget 2025-26 announced the plan to build the index.
Performance Categories
- TiersStates fall into Top Performers, Frontrunners, Emerging and Aspiring.
- PeersThey are also grouped into three peer categories for fair comparison.
Test Yourself
Great to Know
Why It Matters
Competitive Federalism
- IdeaThe index supports competitive and cooperative federalism.
- ToolIt is a reform tool, not just a one-time ranking.
Viksit Bharat@2047
- VisionIt is framed as part of the Viksit Bharat@2047 vision.
Current Affairs
📰 Current Affairs
Top Performers
- LeadersGujarat, Maharashtra, Tamil Nadu, Goa and Odisha were the overall Top Performers.
- GujaratGujarat ranked first among Large States, ahead of Maharashtra and Tamil Nadu.
- SourcePIB, 17 July 2026.
PYQ
Exam Point of View
MCQ Questions
- PrelimsThe Investment Friendliness Index and federalism appear in UPSC and other competitive exams.
Written Answer Questions
- ThemeInvestment climate and cooperative federalism are recurring GS-III themes.
Beyond the answer
Browse all indian-governance topics →
📚 Keep reading
Polity0122 — NITI Aayog: Founding, Structure, and MandateIndEco0013 — Planning Commission and Five Year PlansIndEco0314 — Aspirational Districts Programme: Transformation StrategiesSciTech0012 — NITI AayogIndGov0028 — Reimagining Care: NITI Aayog's Caregiving Policy Roadmap❓ Practice this topic
Which of the following is/are the aim/aims of "Digital India" Plan of the Government of India? 1. Formation of India's own Internet companies like China did. 2. Establish a policy framework to encourage overseas multinational corporations that collect Big Data to build their large data centres within our national geographical boundaries. 3. Connect many of our villages to the Internet and bring Wi-Fi to many of our schools, public places and major tourist centres.Under which flagship government programme is DigiLocker offered?What key benefit does DigiLocker offer users regarding access to their documents?Regarding DigiLocker, sometimes seen in the news, consider: 1. It is a digital locker system offered by the Government under the Digital India Programme. 2. It allows you to access your e-documents irrespective of your physical location. Which is/are correct?🎲 Take a Indian Governance Quiz
Leave a Reply