It's only natural for investors to think of India as a whole: The sheer size and unity of its market is a large part of the country's appeal. And on those terms, there's reason to be gloomy about the prospects for sweeping, national-level reforms, which have run aground in India's gridlocked parliament.

In reality, though, what matters most to companies are conditions in the individual states where they run their businesses. And here, when one looks at the policies being promoted by India's 29 state governments, one can discern more reason for optimism — and a better sense of what still needs to improve.

A recent study conducted by the World Bank in cooperation with KPMG and the government's Make in India initiative ranked Indian states in terms of the ease of doing business. Improving this is one of Prime Minister Narendra Modi's highest priorities.