Guwahati: Assam has emerged as the Northeast’s highest-ranked state in the inaugural Investment Friendliness Index (IFI) released by NITI Aayog, securing a place among the country’s ‘Frontrunners’ and finishing 14th nationally.
With an overall score of 47.3, Assam ranked second among the hilly and northeastern states, behind Uttarakhand (47.5). Tripura followed with 45.0, while Meghalaya (43.0) and Nagaland (41.2) were classified as Emerging Performers. Mizoram (39.9), Arunachal Pradesh (37.5), Sikkim (36.6), and Manipur (32.3) were placed in the Aspiring States category.
The index, introduced by NITI Aayog, assesses how effectively states create an enabling environment for investment through policy, regulation, institutional support, infrastructure, and business climate.
According to the report, Assam’s performance was driven by strong government policy, a favourable institutional environment, and sound financial management, with minimal disruptions from labour issues. However, it noted that the state has room for improvement in business climate and resource availability.
Among the key factors highlighted were Assam’s capital expenditure incentives, which were nearly five times the average for hilly and northeastern states in 2024. The report also noted the state’s sustained investment in road infrastructure, with around 8% of its annual expenditure allocated to roads between 2019 and 2024, compared to the national average of about 3%.
Assam also stood out for its focus on education, allocating an average of 18% of its state budget to the sector between 2019 and 2024, well above the regional average of around 12%. However, the report observed that this has yet to translate into a strong technical workforce, with the addition of new technical workers remaining below the national average.
The state’s financial health also received positive marks. Interest payments accounted for 2.8% of Gross State Domestic Product (GSDP), around 24% lower than the average for hilly and northeastern states, reflecting prudent fiscal management.
NITI Aayog further credited Assam’s institutional environment to low levels of labour disruptions and greater policy consistency, making it more attractive to investors.
Across the Northeast, Assam and Tripura were the only states placed in the Frontrunners category. Meghalaya and Nagaland were recognised as Emerging Performers, while Arunachal Pradesh, Manipur, Mizoram, and Sikkim were listed as Aspiring States, indicating greater scope for reforms to improve the investment climate.
Nationally, Goa, Gujarat, Maharashtra, Odisha, and Tamil Nadu were named the country’s Top Performers.
The report said that while several northeastern states have made progress in improving regulatory frameworks and governance, the region continues to face common challenges, including limited industrial infrastructure, logistics bottlenecks, connectivity constraints, and relatively small domestic markets.
It recommended strengthening transport infrastructure, industrial parks, logistics networks, digital governance, and grievance redressal systems to improve investor confidence and attract greater domestic and foreign investment.
The Investment Friendliness Index is intended to serve as a benchmark for states to improve their investment ecosystems and support India’s long-term Viksit Bharat @2047 vision.