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EconomicsSource: Press Information Bureau

NITI Aayog Launches Investment Friendliness Index (IFI) 2026 for Indian States and UTs

Monday, 20 July 2026
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Key Points

NITI Aayog has launched the Investment Friendliness Index (IFI) 2026 to evaluate the investment readiness of Indian States and UTs, crucial for attracting investments and achieving Viksit Bharat @2047. This initiative is significant for UPSC aspirants, particularly for GS Paper 3 on economic development. Last Updated: 20-07-2026

Key Facts About Investment Friendliness Index (IFI) 2026

  • The Investment Friendliness Index (IFI) 2026 is developed by NITI Aayog to assess investment readiness.
  • It covers 28 States and 8 Union Territories.
  • Based on 8 core pillars: Infrastructure, Business Climate, Resources, Government Policy, Regulatory Ease, Institutional Environment, Financial Health, and Environmental Resilience.
  • Introduced in the Union Budget 2025–26 as a strategic reform tool.
  • Uses 84 objective indicators and investor perception surveys.
  • Classifies regions into Top Performers, Frontrunners, Emerging Performers, and Aspiring States.
  • Gujarat ranked first with a score of 56.6.

India's Investment Climate and Economic Goals

The IFI 2026 is pivotal for enhancing India's investment climate, aligning with the nation's economic goals of achieving high-income status by 2047. It addresses regional disparities and promotes competitive federalism, crucial for balanced economic growth and increased GDP rates.

UPSC Relevance

  • GS Paper 3: Economic Development - Investment models, infrastructure, and growth.
  • Prelims: Questions on the IFI's framework, top-performing states, and key pillars.
  • Mains: Essays on investment climate, regional disparities, and federalism.
  • Optional Subjects: Economics, Public Administration.

FAQ Section

  • What is the Investment Friendliness Index (IFI) 2026?
    The IFI 2026 is a framework by NITI Aayog to assess the investment readiness of Indian States and UTs, focusing on eight core pillars.
  • Why is the IFI 2026 important?
    It is crucial for identifying investment disparities, promoting competitive federalism, and aligning with India's vision of Viksit Bharat @2047.
  • What are the key features of the IFI 2026?
    The index includes 84 indicators, investor surveys, and classifies states into performance tiers to enhance investment competitiveness.

Detailed Coverage

  • IFI 2026 benchmarks investment readiness of 28 States and 8 UTs.
  • Developed across eight core pillars.
  • Identifies regional investment disparities and regulatory bottlenecks.
  • Recommends reforms like single-window clearances and infrastructure development.
  • Conceptualized in response to directives from the 9th Governing Council Meeting.
  • Combines 84 objective indicators with investor perception surveys.
  • Evaluates on a composite score of 100 across eight pillars.
  • Classifies States/UTs into four performance tiers.
  • Top performers include Gujarat, Maharashtra, and Tamil Nadu.
  • Highlights the need for a state-level investment index to address regional imbalances.
  • Identifies macro-level challenges like FDI disparity and investor pain points.
  • Recommends operationalizing single-window systems and enhancing fiscal sustainability.
  • Promotes climate-resilient infrastructure and skill development.
  • Institutionalizes the Investment Index for continuous assessment.
  • Aims to bolster governance and investor confidence in achieving Viksit Bharat 2047.
Economics

Practice Questions

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In the context of the Investment Friendliness Index (IFI) 2026, which term describes the classification of States and Union Territories based on their cumulative scores, thereby allowing an understanding of their relative performance in attracting investments, with categories such as Top Performers and Aspiring States?