CHENNAI: Tamil Nadu ranked first among India's large states for infrastructure but placed third overall in a new investment friendliness index 2026 prepared by NITI Aayog, scoring 53.3 out of 100 behind Maharashtra (53.7) and Goa (53.1) in the large-state category.
The state Tamil Nadu was also among the five states — alongside Gujarat, Maharashtra, Delhi and Karnataka — that together account for about 85 per cent of India's foreign direct investment inflows.
The index assessed states across eight pillars, including infrastructure, business climate, government policy and financial health. Tamil Nadu emerged as the top-ranked large state in infrastructure, supported by efficient port operations, reliable power supply and lower electricity network losses. The report noted that the state's port turnaround time was the third-best nationally after adjusting for cargo capacity, electricity downtime was around 4 per cent below the large-state average and transmission and distribution losses were about 3 per cent lower than peer states.
The state also outperformed on exports, with outbound shipments equivalent to 36 per cent of gross state domestic product, significantly above the average for large states. The report highlighted TN's innovation ecosystem, citing the second-highest number of Atal Tinkering Labs in the country, while investors surveyed praised its policy stability and near-100 per cent conversion rate of investment memoranda of understanding into projects.
However, the assessment cautioned that rising debt levels and limited airport capacity in Chennai could increasingly weigh on the state's long-term investment competitiveness.
