Hyderabad: Despite their strong position in India’s business landscape, Telangana and Andhra Pradesh have missed out on the highest “Top Performers” investment rating in the NITI Aayog’s maiden Investment Friendliness Index (IFI) 2026.
Both Telugu states have been tagged “Frontrunners” in the IFI rankings released last week, which highlights a stark contrast between the states’ immense industrial potential and their on-the-ground operational performance. Andhra ranks eighth among the large states, and Telangana 13th in the same category, their performances stymied by hidden structural bottlenecks, poor finances, sudden institutional vulnerabilities and a widening policy-implementation gap, the report revealed.
The Investment Friendliness Index was developed to understand how well Indian states are positioned to attract investments. The index covers all 28 states and eight union territories (UTs) and evaluates what makes a state attractive for investors, as well as the challenges investors face. The index focuses on eight pillars: infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health, and environmental resilience. The index uses a 100-point scale and serves as a benchmark for states to improve their investment environment. The IFI rated states that performed well with scores above 50, while states that reported specific structural anomalies received scores below 50. Andhra Pradesh got a score of 48.7 and Telangana 47.3. The five states categorised as ‘Top Performers’ were Gujarat, Maharashtra, Tamil Nadu, Goa, and Odisha. Based on the scores, states were grouped into four categories: Top performers, frontrunners, emerging performers, and aspiring states. “Based on this index, states can gain valuable insights into how they perform on parameters critical to investors, allowing them to identify areas of strength and weakness. Additionally, the index will enable states to learn from their peers’ best practices, fostering a culture of continuous improvement,” says the report.
