BHUBANESWAR: Odisha has emerged as one of India’s most competitive investment destination, securing fifth position overall and fourth among large states in the latest NITI Aayog Investment Friendliness Index (IFI) report.
With an overall score of 52.4 points, Odisha ranked behind Gujarat, Maharashtra, Tamil Nadu and Goa. While Odisha performed strongly on resource availability and fiscal management, the report, however, flagged institutional environment and regulatory ease as key areas requiring improvement.
The state’s strongest performance came in the resources pillar, signifying its dominance in the mining sector. The state accounted for nearly 50 per cent of India’s metallic mineral production and 23 per cent of the country’s coal output in 2023-24.
The report also highlighted Odisha’s prudent fiscal management. Total outstanding liabilities stood at just 16 per cent of the state’s Gross State Domestic Product (GSDP), while interest payments were only 1.38 per cent of GSDP in 2023-24, the lowest among all states, placing it third in the financial health pillar.
However, infrastructure gaps continue to constrain industrial growth. Warehousing capacity remains at only 98,000 metric tonnes, significantly below the all-state average of 4.7 lakh metric tonnes. The report also pointed to inadequate container freight station and inland container depot capacity.
Foreign direct investment equity inflow fell sharply to $9 million in 2024, around 81% below the state’s average over the previous three years. Investors cited delays in environmental clearances, limitations in the single-window clearance system and cumbersome business exit procedures as major concerns.
The report also noted weaker contract enforcement and inadequate access to commercial courts compared with peer states. The report stated that industry stakeholders have lauded Odisha’s efficient business registration process and relatively favourable law and order situation but called for improved mobile connectivity in rural areas, affordable industrial parks for startups, stronger transport infrastructure in north Odisha and faster allocation of industrial land by IDCO.
They also recommended development of an international airport at Bhadrak, enhanced rail and road connectivity, expansion of port access at Dhamra and integration of customs procedures through a unified ICEGATE-based single-window system for air and sea cargo, it said.
“The absence of a commercial airport in Bhadrak complicates both passenger and cargo movement for industries across several districts, including those bordering West Bengal. Further, the Bhubaneswar airport is experiencing congestion and its expansion into Khurda has not fully alleviated access issues from North Odisha due to traffic congestion in Cuttack. Developing an international airport in Bhadrak could serve the northern districts and help ease pressure on Bhubaneswar,” the report said.
Industries minister Sampad Chandra Swain said Odisha had attracted substantial investments across sectors over the past two years, leading to new industries and employment generation.
“We have been successful in brining large investments, particularly new-age industries to the state in the last two years. Creation of employment is a priority area of the government,” Swain said.
He said that Chief Minister Mohan Charan Majhi will lead an investors’ roadshow in New Delhi in August to attract further investments. This time, the focus of the investors’ meet will be on food processing sector.