Niti Aayog to launch Investment Friendliness Index by July: Report

Niti Aayog, the government’s policy think tank, plans to roll out the Investment Friendliness Index by July to assess states' investment potential and promote competition in deregulation and ease of doing business, Mint reported, citing sources.

Announced in the Union Budget 2025-26 by Finance Minister Nirmala Sitharaman, the index aims to bolster competitive cooperative federalism by encouraging states to adopt best practices to attract investments and boost growth.

The Centre expects the ranking to drive states to learn from top performers and implement necessary reforms, a source told Mint. The report also highlighted that Prime Minister Narendra Modi, in a December meeting with state chief secretaries, actively discussed regulatory simplifications and investment-friendly policies.

According to The Economic Times, the index will rank states based on two key factors—opportunity and risk—with four sub-indicators:

• State policies and incentives


• Infrastructure


• Business climate and innovation


• Available resources

A source quoted by Mint noted that merely announcing policies or legislative changes isn't enough. “What truly matters is how reforms are implemented on the ground. Some take a year, others longer. The idea is to create an incentive-based push for states to improve productivity,” the person said.

The Economic Survey 2024-25, tabled on January 31, also emphasized deregulation as a key driver of economic growth.