Using index as a key can negatively impact performance and may cause issues with the component state. When the list items change due to additions, deletions, or reordering, using indexes can lead to unnecessary re-renders or even incorrect UI updates. React uses keys to identify elements in the list, and if the key is just an index, it might reuse component instances and state inappropriately. Especially in cases where the list is dynamic or items can be reordered, it’s recommended to use unique and stable identifiers as keys to ensure consistent behavior.