NITI Aayog has released the Investment Friendliness Index (IFI), a framework meant to compare how effectively States and Union Territories create conditions for investment. The index matters because investment decisions depend heavily on State-level infrastructure, regulation, institutions, and policy predictability, not only on Union-level economic policy.
The release builds on a mandate given during the 9th Governing Council Meeting of NITI Aayog in July 2024, when the Prime Minister asked NITI Aayog to prepare an Investment-Friendly Charter. The Union Budget 2025–26 then announced the development of an Investment Friendliness Index to strengthen competitive and cooperative federalism.
What the Index measures
The IFI covers all 28 States and 8 Union Territories. NITI Aayog says the framework uses 84 indicators drawn from secondary data and a primary survey of investors.
The index evaluates investment attractiveness across eight pillars:
The eight pillars are Infrastructure, Business climate, Resources, Government policy, Regulatory Ease, Institutional Environment, Financial Health, and Environmental Resilience.
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