India’s Top Investment Destinations

Posted by Written by Vasundhara Rastogi Reading Time: 5 minutes

In this article, we provide a bird’s eye view of the economic features of India’s top five investment destinations.

Every state in India has a unique economic profile that presents challenges and opportunities to any foreign investor examining the country for expansion.


A leading industrial state, Gujarat enjoys faster GDP growth than India as a whole. Strategically located on the west coast of India, it provides a gateway to the land-locked states in north India.

The state’s industrial strengths include the production of petrochemicals and allied products, port and shipbuilding, conventional and renewable energy, chemical and allied products, electrical and non-electrical machinery engineering and automotive manufacturing, food and agribusiness, gems, diamonds and jewelry, textiles, and pharmaceuticals among others.

It is also home to many of India’s best-known corporations such as Reliance, Mahindra & Mahindra, Adani group, Aditya Birla Group, and Godrej.

Key tier-2 cities: Ahmedabad, Surat, Vadodara, and Rajkot.


  • Well situated for trade routes to the African continent and the Persian Gulf;
  • Almost 25 percent of India’s sea cargo passes through the state;
  • Gateway to northern India;
  • Consistently ranked at the top in ease of doing business surveys;
  • Gujarat is a mineral rich state in capacity, reserves and production; and
  • Strong agriculture, automobile, and pharmaceutical industries.

Investment opportunities

  • Infrastructure – roads, ports, urban infrastructure, energy, architecture and design services, green buildings;
  • Renewable energy, bioenergy (waste to energy, landfill gas);
  • Agriculture – commodities, horticulture, agriculture business technology and services, dairy technology;
  • Water – wastewater treatment and water technologies; and
  • Food processing, logistics.


Situated to the south of Gujarat, Maharashtra is among the wealthiest and the most industrialized states in India. The state owes its success to its film industry (or Bollywood), international trade, services, technology, aerospace, petroleum, fashion, and apparel. The service sector, in particular, finance, dominates the state economy.

Maharashtra’s capital city Mumbai, also known as the financial capital of India, houses several large, global banks and financial institutions. These include the Reserve Bank of India – the country’s federal bank, two largest Stock Exchanges (Bombay Stock Exchange or BSE and National Stock Exchange or NSE), and life and general insurance companies. Nagpur – another major city in the state is emerging as a major logistics hub because of its central location.

Maharashtra has established strengths in every sector including information technology (IT) and telecom, petroleum and allied products, chemicals, engineering, automobiles and auto components, electrical and non-electrical machinery, and textiles.

Key cities: Mumbai, Pune, Nagpur, Nasik, Aurangabad, and Vasai Virar.


  • Strategically located on the western coast of India;
  • Gateway for imports into western India;
  • Houses the financial capital of India – Mumbai;
  • Provides conducive business environment and can be used as a launching pad to the rest of the country;
  • Houses leading corporations and a key source and destination for FDI;
  • Competitive banking, financial, and service industries; and
  • Home to one of the largest entertainment industries in the world.

Investment opportunities

  • Financial services;
  • R&D – collaboration and commercialization;
  • Infrastructure – metro rail build, development of townships, ports, and waterfront;
  • Water – wastewater management; and
  • Agribusiness – food and beverage products, dairy technology, and services.


Karnataka is an information and communications technology (ICT) and innovation hub of India.

The state is home to over 3,500 IT companies, 50 percent of India’s biotech companies, and has an expanding e-commerce industry.

Karnataka is India’s largest software exporter, fourth largest automobile producer and a key contributor to electronic industrial output.

The capital city Bengaluru (or Bangalore) dominates the state economy. Besides  IT,  the city has clusters  of aerospace, defense, machine tools, electronics- related industries, and biotech companies. It also has a booming retail market and is the first destination of many global consumer brands, especially luxury labels.

Key cities: Bengaluru, Hubli-Dharwad, and Mysuru.


  • Investor-friendly government has simplified procedures and transparent administration;
  • Good connectivity to major national and international markets;
  • Excellent telecommunication system with optical fiber connectivity throughout the state;
  • Home to public sector enterprises in heavy industry, aeronautics, precision engineering, telecommunications, health and pharmacy, and software development;
  • A leading producer of auto components, machine tools, and heavy electrical machinery; and
  • Globally competitive in IT services and business process outsourcing (BPO).

Investment opportunities

  • Information technology and software development;
  • Start-ups;
  • Electronics, electronic hardware;
  • Pharmaceuticals;
  • Infrastructure and urban development;
  • Agriculture – honey, food processing, dairy technology, and horticulture; and
  • Resources and energy – mining, mineral processing and renewable energy – solar, mini-hydel, wind, river rejuvenation, waste management.

Andhra Pradesh

Located on the southeastern coast of India, Andhra Pradesh is the eighth largest state in the country in terms of geographical expanse, and tenth largest in terms of population. In 2014, the state’s north- western region was bifurcated to form a separate inland state of Telangana. Yet Andhra Pradesh remains among India’s fastest-growing states.

With regards to the business climate, the state topped the country’s ease of doing business ranking in 2018. It also ranked among top ten investment destinations in the National Council for Applied and Economic Research (NCAER)’s 2018 State Investment Potential Index (N-SIPI). The state’s single window clearance system is regarded as a model for other states.

In line with economic, trade and industrial reforms, initiated by the state government, Andhra Pradesh has enunciated and ensured several steps to attract and activate global participation in its development activities. The state is today experiencing a phenomenal interest by local, national, international and multinational investments in various sectors. Some of these are pharmaceuticals, food processing, textiles, electronics and IT, automobiles and auto-components, and mineral-based industries. 

Key cities: Visakhapatnam and Vijayawada.


  • Over 950 kilometers of coastline, India’s largest bulk port, and several minor ports;
  • Strategically located on the eastern coast of India, offering strong trade connectivity with the largest markets in Asia such as China, Hong Kong, Japan, and Singapore;
  • Situated on a delta region that has fertile river plains and is rich with agriculture-based industries.
  • Huge reserves of minerals that promote large- scale ore-exports.
  • Diverse industrial base spanning aerospace, food processing, IT, precision engineering, and semiconductors; and
  • Hosts leading software and IT hubs.

Investment opportunities

  • Fintech – the state is developing Visakhapatnam as a fintech hub;
  • Resources and energy – mining, mineral processing, strong potential in renewable energy technology, particularly, solar and wind; and
  • Infrastructure and urban development – power transmission investment, architectural services, road safety, and transport technology solutions.

Tamil Nadu

Tamil Nadu is the southernmost state in India bound by Bay of Bengal on the east, the Indian Ocean on the south, and the Arabian Sea on the west. Surrounded by sea from three sides, the state serves as an important gateway to Southeast Asia.

The state is the second largest economy in terms of nominal GDP and the most urbanized state  in India. Chennai is the capital city, the fourth largest city in India, and a major manufacturing hub. The city is often termed the “Detroit of India”. The city is home to many Indian and multinational companies, mostly engaged in the automotive, healthcare, IT and financial services sectors. The state is also considered as an educational hub for India.

The other two major cities in Tamil Nadu are Coimbatore and Madurai. Many textile mills and engineering units are located in these two cities.

Key cities: Chennai, Coimbatore, Madurai, Tiruchirappalli, Salem, and Tiruppur.


  • Strategically located on the south-eastern coast of India for access to Southeast Asia;
  • Chennai is a major port for agricultural imports and exports and India’s second largest source of software exports;
  • A major producer of sugar, maize, horticulture, chemicals, fertilizers, cement, paper and steel;
  • A leading solar and wind energy producer, with among the highest installed capacity in India;
  • Mature industrial climate with regionally competitive manufacturing industry; and
  • India’s largest number of special economic zones in operation.


  • Infrastructure – roads, ports, urban infrastructure, architecture, and design services;
  • Education – training and skill development; research partnerships;
  • Energy sector – wind and solar energy, gas pipeline network, and transmission; and
  • Advanced manufacturing, automotive technology, and aftermarket products.

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India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may write to for more support on doing business in in India.

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