India’s five largest state economies—Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, and Gujarat—accounted for nearly 48 percent of the nation’s GDP in FY2025, as detailed in a recent white paper released by Client Associates, a private wealth management firm. In stark contrast, the bottom ten states contributed less than 3 percent of the national output.
Maharashtra led with a substantial 13.3 percent share of the overall GDP, while Tamil Nadu achieved the highest year-on-year growth among the top five states, reporting an increase of 16 percent in FY2025. The nominal GDP of India surpassed ₹340.7 lakh crore in FY2025, placing the country as the fifth-largest economy globally, with a real GDP growth rate of 7.1 percent. However, the report highlights significant disparities at the state level, noting that Maharashtra’s economy is 133 times larger than that of Mizoram. Additionally, Goa’s per capita income exceeds Bihar’s by more than eight times.
According to the composite investment-readiness rankings, Gujarat was identified as the top-ranked state, followed closely by Karnataka, Maharashtra, Jharkhand, and Uttar Pradesh. Gujarat’s favorable position is attributed to several factors, including one of India’s lowest unemployment rates at 2.7 percent and a diverse industrial base encompassing chemicals, textiles, diamonds, pharmaceuticals, and petrochemicals. The state also reported a fiscal deficit of just 1.86 percent of GDP, one of the lowest nationwide.
In the realm of foreign investment, India attracted ₹4.22 lakh crore in FDI equity inflows during FY2025, representing a 14.7 percent increase from FY2024. Notably, Maharashtra, Karnataka, Gujarat, Delhi, and Tamil Nadu collectively captured 83.3 percent of total inflows.
The report underscores a growing prosperity gap, with Sikkim and Goa recording per capita incomes of approximately ₹5.88 lakh and ₹5.86 lakh, respectively, whereas Bihar’s per capita income stood at ₹69,321—a disparity exceeding eight times. Only 16 of the 30 states surpassed the national average per capita income of ₹2.58 lakh.
In terms of growth velocity, Assam topped the list of states with a five-year nominal GDP compound annual growth rate (CAGR) of 17.3 percent, followed by Uttar Pradesh and Meghalaya, both around 15.3 percent. The growth in Uttar Pradesh is characterized as a structural inflection rather than a temporary spike, driven by initiatives such as the NIVESH MITRA single-window portal and land record digitization, positioning the state as a logistics and defense manufacturing hub.
The report categorizes states into four tiers: established anchors, high-potential performers, reform opportunities, and states requiring fiscal rehabilitation. Punjab, Himachal Pradesh, Mizoram, and Jammu & Kashmir were highlighted for elevated debt levels and fiscal stress.
Client Associates currently manages assets totaling approximately $6.1 billion for over 1,400 families across India.
Published on May 19, 2026.
