The best states to do business in India? Check the investment-friendly list here

India's race to attract investment has a new leader. Gujarat has topped the NITI Aayog Investment Friendliness Index 2026, emerging as the country's best-performing state for its business and investment climate. Maharashtra and Tamil Nadu secured the second and third positions, showing that western and southern states continue to dominate when it comes to attracting businesses and private investment.The index offers a snapshot of how states perform on factors that influence investment, including governance, infrastructure and the overall ease of doing business.GUJARAT LEADS THE RANKINGSAccording to the index, Gujarat scored 56.6, the highest among all states.The top performers are: Delhi scored 49.9, while Madhya Pradesh (48.9), Karnataka (48.7) and Andhra Pradesh (48.7) also featured among the stronger performers.HOW OTHER STATES FAREDSeveral large states recorded mid-range scores, including: State/UTScoreGujarat56.6Maharashtra53.7Tamil Nadu53.3Goa53.1Odisha52.4Delhi49.9Madhya Pradesh48.9Karnataka48.7Andhra Pradesh48.7Rajasthan48.1Uttarakhand47.5Chhattisgarh47.5Assam47.3Telangana47.3Haryana47.1Chandigarh47.0Kerala46.6Himachal Pradesh46.1Uttar Pradesh45.0Tripura45.0Puducherry44.9Punjab44.7West Bengal41.3Jharkhand41.3Sikkim41.2Nagaland41.2Ladakh40.2Mizoram39.9Arunachal Pradesh37.5Dadra & Nagar Haveli and Daman & Diu37.1Bihar36.6Manipur32.3Andaman & Nicobar Islands30.2Jammu & Kashmir27.0Lakshadweep24.5Among the lower-scoring regions were Bihar (36.6), Arunachal Pradesh (37.5), Mizoram (39.9), Ladakh (40.2), Jammu and Kashmir (27), Andaman and Nicobar Islands (30.2) and Lakshadweep (24.5).WHAT THE INDEX MEASURESThe Investment Friendliness Index evaluates states and Union Territories on their ability to attract investment through better governance, infrastructure, policy support and a business-friendly environment.It groups regions into four broad categories, top performers, frontrunners, emerging performers and aspiring states, to show how prepared they are to attract businesses and new projects.WHY THE RANKINGS MATTERA higher ranking can make a state more attractive to investors looking to set up factories, logistics hubs, startups, manufacturing units and other businesses.For state governments, the index serves as a benchmark to identify areas that need improvement while also showcasing their strengths in competing for domestic and global investment.As India pushes for faster economic growth and higher private investment, the rankings offer an indication of where businesses may find the most favourable environment to expand operations.- EndsPublished By: vaishnavi parasharPublished On: Aug 2, 2026 16:23 IST