Nagaland ranks 27th in NITI Aayog's Investment Friendliness Index, with reforms praised but infrastructure gaps remaining significant.
DIMAPUR — Nagaland has been ranked 27th among Indian states and Union territories and sixth among the north-eastern and hilly states in the latest Investment Friendliness Index released on Friday by NITI Aayog.
The report identified the state's strengths in governance, regulatory reforms and institutional environment and flagged infrastructure and digital connectivity as key areas requiring improvement.
It gave Nagaland an overall score of 41.2, attributing its performance to significant regulatory ease and a strong institutional framework. However, it pointed out that the state continues to face challenges in the resources and infrastructure pillars, particularly in human resources and connectivity.
According to the report, Nagaland performed strongly in the government policy, regulatory ease and institutional environment pillars, reflecting what it described as consistent reform efforts and stable governance.
The report highlighted that Nagaland recorded a five-year Gross State Domestic Product (GSDP) growth rate of 4.84% between fiscals 2019 and 2024, marginally above the national average of 4.8%.
It also cited the state's performance in industrial incentives, stating that capital expenditure (capex) incentive disbursement accounted for 18% of total industrial capex, higher than the national average of 11% and the category average of 17%.
Another key strength identified was Nagaland's female workforce participation rate of 59% in fiscal 2024, significantly above both the category average of 13% and the national average of 40%. The report stated that these indicators reflected the state's inclusive growth momentum.
On the regulatory front, Nagaland received favourable assessments for land allotment and use, environmental clearances and the ease of closing a business, with perception scores exceeding the average for comparable states.
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Despite these positives, the report identified several infrastructure gaps that could constrain future investment.
It pointed to the limited capacity of Dimapur Airport, which currently handles around 5 lakh passengers annually, the need to strengthen cargo-handling facilities, and the state's relatively low rail density compared with several other states in the same category.
The report also highlighted shortcomings in digital infrastructure, stating that 5G and 4G penetration, measured by base transceiver stations (BTS) per square kilometre, is about 26% below the average of comparable states.
It added that per capita digital payment transactions are only half the category average, indicating scope for expanding digital connectivity and financial adoption.
According to the NITI Aayog’s report, strengthening transport, logistics and digital infrastructure would further enhance Nagaland's competitiveness and help build a more connected and investment-friendly business ecosystem.