Top 10 Countries in 2025 Index of Economic Freedom – Where Does India Rank?

The 2025 Index of Economic Freedom, released by the Heritage Foundation, highlights the fragility of the global economy. Although the global average economic freedom score improved slightly to 59.7 (up from 58.6 in 2024), the overall world economy is still classified as “mostly unfree.”

Out of 176 countries ranked, only three nations achieved the “economically free” status in 2025, compared to four last year. This underscores the growing economic challenges faced worldwide, including fiscal instability, weakening rule of law, and declining investment freedom.

Top 10 Economically Free Countries in 2025

According to the 2025 Index, Singapore has retained its position as the freest economy in the world, followed by Switzerland and Ireland.

World Rank	Country	2025 Score	Category
1	Singapore	84.1	Free
2	Switzerland	83.7	Free
3	Ireland	83.1	Free
4	Taiwan	79.7	Mostly Free
5	Luxembourg	79.5	Mostly Free
6	Australia	79.3	Mostly Free
7	Denmark	79.1	Mostly Free
8	Estonia	78.9	Mostly Free
9	Norway	78.3	Mostly Free
10	Netherlands	78.2	Mostly Free

Key Highlights:

• Singapore (#1): Continues as the global leader, demonstrating high resilience, strong regulatory efficiency, and openness to trade.
• Switzerland (#2): Maintains stability with transparent governance and financial freedom.
• Ireland (#3): Benefits from pro-business policies and global investment appeal.
• Taiwan (#4): Retains its highest-ever ranking, reflecting innovation-driven growth.

Interestingly, the United States dropped to #26 with a score of 70.2, the lowest in its history, signaling deep structural weaknesses.

India’s Rank in the 2025 Index of Economic Freedom

India ranks #128 globally and #26 regionally, with a score of 53.0, placing it in the “mostly unfree” category. Despite being the world’s fifth-largest economy, India struggles to break into higher levels of economic freedom.

India’s Strengths:

• Government Spending: 74.2
• Business Freedom: 72.3
• Tax Burden: 71.3

These indicators suggest India has made progress in containing spending, reducing tax pressure, and improving ease of doing business.

India’s Weaknesses:

• Fiscal Health: 6.2 (very poor)
• Investment Freedom: 40
• Financial Freedom: 40
• Government Integrity: 37.6

The weak scores highlight persistent issues of debt burden, low investor confidence, and governance challenges.

Mid-Range Scores:

• Property Rights: 51.1
• Judicial Effectiveness: 53.2
• Labour Freedom: 59.0

This indicates partial progress, but also the need for deeper reforms in legal enforcement and labour market flexibility.

Global Economic Trends in 2025

• Mostly Unfree Economies: 89 countries (about 50% of the index) fall under this category.
• Economically Repressed Nations: 29 countries, including Pakistan (#150) and China (#151).
• Improvement but Fragile: The slight global score rise (+1.1 points) suggests reforms in some regions, but sustainability remains uncertain.

Regional Rankings and Variations

The 2025 Index also emphasizes regional disparities in economic freedom:

• Europe continues to dominate the top rankings with countries like Switzerland, Ireland, Denmark, and Estonia.
• Asia shows resilience through Singapore and Taiwan, but also houses some of the most repressed economies.
• South Asia, including India, continues to lag behind due to fiscal imbalances and regulatory bottlenecks.