Investment Friendliness Index
Also called: IFI · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
The Investment Friendliness Index (IFI) is an index from NITI Aayog, the Centre's policy think tank. It ranks Indian States on how ready they are to attract investment and to keep it. The first report, released in July 2026, was described as a first-of-its-kind report. The index scores States on things investors care about, such as how many signed MoUs (memoranda of understanding, or investment promises) turn into real projects, how good their infrastructure is, and how they do on environment and disaster-readiness. It is a tool of competitive federalism, which means States compete with each other to perform better and win investment.
Example
In the 2026 IFI, Gujarat ranked 1st, Maharashtra 2nd and Tamil Nadu 3rd. Tamil Nadu scored well on its high MoU conversion rate and had an air-quality score 22% better than average. The index also flagged three gaps for the State: weak international air connectivity, limits at Chennai Port, and poor industrial water supply in its landlocked and rain-shadow districts.
Don't confuse with
- BRAP (Business Reform Action Plan): this ranks States on ease-of-doing-business reforms, and it is run by DPIIT, not NITI Aayog.
- Ease of Doing Business (World Bank): this was an international ranking of countries, not Indian States. It was dropped in September 2021 and replaced by B-READY (2024).