NITI Aayog Investment Friendliness Index 2026: Gujarat, Maharashtra & Tamil Nadu on Top

By Vikas Sir, Founder & Senior Faculty – Cosmo Classes | 18 July 2026

NITI Aayog released its Investment Friendliness Index 2026 on 17 July 2026, ranking Indian States and Union Territories on the conditions that shape investment. The exercise covered 28 States and eight Union Territories and evaluated them across eight pillars — physical infrastructure, business climate, resource availability, government policy, regulatory ease, institutional environment, financial health and environmental resilience.

In the overall national rankings, Gujarat topped the list with a score of 56.6 out of 100, followed by Maharashtra at 53.7 and Tamil Nadu at 53.3. Goa and Odisha also featured among the strong overall performers. Maharashtra's second place was driven mainly by its business-climate score, while Tamil Nadu's third place rested on strong infrastructure and business-climate performance.

The index traces its origin to a task set by Prime Minister Narendra Modi at the 9th Governing Council Meeting of NITI Aayog in July 2024, and it was formally announced in the Union Budget 2025-26. Its purpose is to benchmark sub-national investment conditions so that States and UTs can identify and address gaps. At the other end of the table, Lakshadweep, Ladakh and the Andaman & Nicobar Islands were among the lowest-ranked performers.

For aspirants, such indices tie neatly into the wider theme of cooperative and competitive federalism, and connect to the long-term "Viksit Rajya @2047" vision linked to the centenary of India's independence. The topic is directly relevant to reports-and-indices questions in UPSC, RPSC, SSC and Banking examinations.

Important Facts for Exams

  • ◆ NITI Aayog released the Investment Friendliness Index 2026 on 17 July 2026.
  • ◆ It assessed 28 States and eight Union Territories across eight pillars.
  • ◆ Top three: Gujarat (56.6), Maharashtra (53.7), Tamil Nadu (53.3).
  • ◆ Origin: task set at the 9th Governing Council Meeting (July 2024); announced in Union Budget 2025-26.
  • ◆ Lowest-ranked included Lakshadweep, Ladakh and Andaman & Nicobar Islands.
  • ◆ NITI Aayog is the Government of India's policy think tank, established in 2015.

Practice Questions (MCQs)

Total 10 questions — 7 medium level and 3 UPSC/RPSC level.

Moderate

Q1. Which body released the Investment Friendliness Index 2026?

(A) RBI
(B) NITI Aayog
(C) Finance Commission
(D) SEBI
View Answer
Answer: (B) NITI Aayog
Explanation: As per the facts covered in this article, the correct choice is "(B) NITI Aayog", which matches the detail asked in the question.
Moderate

Q2. Which State topped the Investment Friendliness Index 2026?

(A) Maharashtra
(B) Tamil Nadu
(C) Gujarat
(D) Karnataka
View Answer
Answer: (C) Gujarat
Explanation: As per the facts covered in this article, the correct choice is "(C) Gujarat", which matches the detail asked in the question.
Moderate

Q3. What was Gujarat's overall score in the index?

(A) 53.3
(B) 53.7
(C) 56.6
(D) 60.0
View Answer
Answer: (C) 56.6
Explanation: As per the facts covered in this article, the correct choice is "(C) 56.6", which matches the detail asked in the question.
Moderate

Q4. How many pillars does the index use to assess performance?

(A) Five
(B) Six
(C) Eight
(D) Ten
View Answer
Answer: (C) Eight
Explanation: As per the facts covered in this article, the correct choice is "(C) Eight", which matches the detail asked in the question.
Moderate

Q5. How many States and Union Territories were covered by the index?

(A) 28 States and 8 UTs
(B) 29 States and 7 UTs
(C) 25 States and 9 UTs
(D) 30 States and 6 UTs
View Answer
Answer: (A) 28 States and 8 UTs
Explanation: As per the facts covered in this article, the correct choice is "(A) 28 States and 8 UTs", which matches the detail asked in the question.
Moderate

Q6. Which State ranked second, largely due to its business-climate pillar?

(A) Tamil Nadu
(B) Maharashtra
(C) Goa
(D) Odisha
View Answer
Answer: (B) Maharashtra
Explanation: As per the facts covered in this article, the correct choice is "(B) Maharashtra", which matches the detail asked in the question.
Moderate

Q7. In which year was NITI Aayog established?

(A) 2014
(B) 2015
(C) 2016
(D) 2012
View Answer
Answer: (B) 2015
Explanation: As per the facts covered in this article, the correct choice is "(B) 2015", which matches the detail asked in the question.
UPSC/RPSC Level

Q8. Consider the following: 1) The index was announced in the Union Budget 2025-26. 2) It originated from a task set at the 9th Governing Council Meeting of NITI Aayog. 3) It ranks only States, not Union Territories. Which are correct?

(A) 1 and 2 only
(B) 2 and 3 only
(C) 1 and 3 only
(D) 1, 2 and 3
View Answer
Answer: (A) 1 and 2 only
Explanation: As per the facts covered in this article, the correct choice is "(A) 1 and 2 only", which matches the detail asked in the question.
UPSC/RPSC Level

Q9. With reference to the eight pillars, consider: 1) Environmental resilience is one of the pillars. 2) Business climate is a pillar. 3) Defence preparedness is one of the pillars. Which are correct?

(A) 1 and 2 only
(B) 2 and 3 only
(C) 1 and 3 only
(D) 1, 2 and 3
View Answer
Answer: (A) 1 and 2 only
Explanation: As per the facts covered in this article, the correct choice is "(A) 1 and 2 only", which matches the detail asked in the question.
UPSC/RPSC Level

Q10. The phrase "Viksit Rajya @2047" is linked to which idea?

(A) Centenary of Independence in 2047
(B) 100 years of NITI Aayog
(C) A defence modernisation plan
(D) A monetary policy target
View Answer
Answer: (A) Centenary of Independence in 2047
Explanation: As per the facts covered in this article, the correct choice is "(A) Centenary of Independence in 2047", which matches the detail asked in the question.

UPSC / RPSC Relevance

  • ➜ Prelims: Index publisher (NITI Aayog), top-ranked States, number of pillars, year of establishment.
  • ➜ Mains GS-II: Cooperative and competitive federalism, role of NITI Aayog.
  • ➜ Mains GS-III: Investment climate, ease of doing business, sub-national development.

UPSC Mains Descriptive Question

"Sub-national investment indices are as much instruments of competitive federalism as they are diagnostic tools." Examine, with reference to NITI Aayog's Investment Friendliness Index 2026. (250 words, 15 marks)