Top 5 states attract 85% of FDI, leaving northeast with less than 1%
GS3Economy · S&T · Environment · Security· Industry, investment & MSMEs· Prelims + Mains·
Why in news
Niti Aayog released the Investment Friendliness Index 2026, highlighting a severe regional disparity where the top five states capture 85% of FDI while the Northeast receives less than 1%.
Background
The Investment Friendliness Index 2026 ranks states on infrastructure, business climate, and regulatory ease. Gujarat, Maharashtra, Odisha, Tamil Nadu, and Goa emerged as the top-performing states in the report.
Facts for Prelims
- BodyNiti Aayog: The premier policy think tank of the Government of India.
- FactTop 5 states (Gujarat, Maharashtra, Odisha, Tamil Nadu, Goa) attract 85% of total FDI.
- FactNortheast states receive less than 1% of total FDI as per the 2026 Index.
For Mains
Q. Analyze the factors contributing to regional investment disparities in India and suggest measures to integrate the Northeast region into the national industrial growth trajectory.
Dimensions to cover in your answer
- Infrastructure deficit: Lack of multi-modal connectivity and reliable power supply in hilly terrains of the Northeast.
- Regulatory friction: Complexity in land acquisition and bureaucratic hurdles for large-scale industrial projects in remote areas.
- Market access: Limited proximity to major consumption hubs and industrial corridors compared to the western and southern states.
Keywords: Regional Disparity · FDI Inflow · Investment Climate · Infrastructure Gap · Economic Integration
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