AP Among Top Investment-Friendly States: Niti Aayog Index

Andhra Pradesh has secured eighth place nationally and sixth among the 17 large states in the Niti Aayog Investment Friendliness Index (IFI) 2026, with an overall score of 48.7, earning a place in the 'Frontrunners' category.

Prepared by Niti Aayog with Crisil as the knowledge partner, the index assesses all 28 states and eight Union Territories across eight parameters, including infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health and environmental resilience. The rankings are based on 84 indicators, including investor perception surveys covering more than 1,850 businesses.

Among the large states, Gujarat topped the index with 56.6 points, followed by Maharashtra (53.7), Tamil Nadu (53.3), Odisha (52.4), Madhya Pradesh (48.9), Andhra Pradesh (48.7) and Karnataka (48.7).

The report attributed Andhra Pradesh's performance largely to its infrastructure and resource base. The state recorded the highest digital transactions per capita in the country at about 18, compared with the average of 4.8 among large states. It also reported an average daily power supply of 23.71 hours, above the category average of 22.7 hours, while transmission and distribution losses stood at 14 per cent, below the large-state average of about 18 per cent.

The report noted that Andhra Pradesh accounts for nearly 10 per cent of India's non-metallic mineral production by value and has the fifth-highest renewable energy potential among states. It also recorded the country's highest share of STEM enrolments in higher education at 48 per cent, reflecting the availability of a skilled workforce.

Investor feedback highlighted Visakhapatnam Port, the state's expanding seaport network, Sri City, Jawaharlal Nehru Pharma City and APIIC industrial estates, along with well-developed cold storage and warehousing facilities, as major strengths supporting manufacturing, pharmaceuticals, chemicals and food processing.

However, investors recommended improving internal roads in tier-II and tier-III cities, airport cargo infrastructure, faster disbursal of incentives, quicker utility connections and stronger disaster-resilient infrastructure.

The report also flagged the state's financial health as an area for improvement, citing outstanding liabilities of around 35 per cent of GSDP and a fiscal deficit above the target recommended by the 15th Finance Commission.

According to the report, Andhra Pradesh has a geographical area of 1.60 lakh sq km and a per capita GSDP of ?1.61 lakh. Agriculture contributes 11.8 per cent, industry 29.6 per cent and services 58.6 per cent to the state's gross value added (GVA). The state attracted $92.13 million in foreign direct investment (FDI) during 2023–24, with food processing, chemicals and pharmaceuticals identified as key sectors.