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Investment Friendliness Index: NITI Aayog’s State Ranking Plan

6 June 20251 min read
REPORTS & INDEXESInvestmentFriendliness Index:NITI Aayog’s StateRanking Plan6 June 2025safalsetu.com

Why in the news

NITI Aayog was preparing a state ranking index that is likely to use four or more sub-indicators, two people aware of it said.

Key facts

DimensionWeightElements
Opportunity65%Policies, infrastructure, innovation climate, land-talent-logistics
Risk35%Natural, regulatory, financial and institutional
  • Perception inputs come from industry consultations on investor sentiment and compliance ease.
  • Supports the National Manufacturing Mission.

Significance

  • Guides investors to suitable states and promotes competitive cooperative federalism.
  • Rewards top states and pushes laggards to improve.

Regional trends

  • South (Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, Kerala): about 30% of GDP; strong in autos, electronics, mobiles.
  • West (Maharashtra, Gujarat): leads in industrial infrastructure and FDI.

Exam angle

  • Publisher: NITI Aayog; weights 65:35.

Test yourself

1. What weightage does opportunity carry in NITI Aayog's planned Investment Friendliness Index?

Opportunity has 65% weight and risk the remaining 35%.

2. The Investment Friendliness Index is meant to support which national initiative mentioned in the notes?

The notes say it backs the National Manufacturing Mission.

3. Which institution is preparing the Investment Friendliness Index to rank states?

It is a NITI Aayog index.