Gujarat has ranked first among India’s large states in the NITI Aayog’s Investment Friendliness Index 2026, the government think tank’s first attempt at ranking states on how easy and attractive they are for private investment. Gujarat scored 56.6 out of 100, ahead of Maharashtra (53.7) and Tamil Nadu (53.3).
What the index actually measures
Unlike older “ease of doing business” rankings that leaned on self-reported compliance data, this index combined 84 indicators across eight weighted pillars, including infrastructure, business climate, resources, government policy, regulatory ease, financial health, institutional environment and environmental resilience, with a survey of more than 1,850 investors and inputs from 165 other stakeholders, according to ANI’s reporting on the index’s methodology. NITI Aayog Vice Chairman Ashok Kumar Lahiri was explicit that the exercise isn’t meant as a competitive scoreboard: “This is not a ranking exercise… it’s an exercise to tell the states where they are doing well, where they are not doing so well.”
Infrastructure carried the heaviest weight, at 25 percent, followed by business climate at 20 percent. Analysts pointed to Gujarat’s traditional strengths on those two fronts: port capacity along its coastline, established industrial corridors, and a working single-window clearance system.
Why Gujarat scored where it did
Coverage of the index credited Gujarat’s performance to efficient port operations, a competitive power sector and a stable policy environment, with particular mention of the Industrial Extension Bureau (iNDEXTb), the state agency that runs single-window approvals for new investment proposals. That single-window mechanism has been a recurring feature of Gujarat’s industrial pitch for over a decade, predating this index by a wide margin. The ranking reads as external validation of an approach the state already had in place, not the product of a new reform.
What it means for Gujarat residents
State governments use strong showings like this to court fresh manufacturing and infrastructure investment. Gujarat’s pitch to companies scouting new plants, in sectors from semiconductors to renewable energy to the defence manufacturing already under way in Vadodara, now has an external data point behind it. For residents, the concrete question is whether that investment translates into local jobs and whether infrastructure spending keeps pace with the state’s own industrial growth. Gujarat’s 56.6 score, while first among large states, is still barely above half of the maximum possible, and the index itself flags room to improve.
The index also serves NITI Aayog’s stated goal of pushing states to compete on reform rather than incentives alone; other states now have a published benchmark to close the gap against, which could sharpen competition for the same pool of investment Gujarat has relied on.
Outlook
NITI Aayog has indicated this will become a recurring exercise. Gujarat will need to defend the position in the next edition, not just claim it once. Holding or extending the lead will depend on execution in the pillars it scored weaker on, including institutional environment and environmental resilience. Both are likely to draw more scrutiny given Gujarat’s exposure to industrial pollution and coastal climate risk.
This report was compiled and written with AI assistance from publicly reported sources, and reviewed for accuracy.