Kerala is one of the country’s prime tourism economies and its traditional industries include handloom, cashew, coir and handicrafts. The state‘s economic performance is driven by the secondary and tertiary sectors. The state‘s gross domestic product (GDP) grew at a compound annual growth rate (CAGR) of 13.5 per cent between 1999-00 and 2007-08 to reach US$ 40.4 billion. Driven by manufacturing, construction, electricity, gas and water, the secondary sector has been the fastest growing sector, at a CAGR of 14.5 per cent. The per capita income of Kerala was US$ 1,040 in 2007-08, as compared to all-India average of US$ 850.

Manufacturing plays a vital role in Kerala‘s economy. The small scale sector contributes 40 per cent to industrial production and 35 per cent to exports. The state accounts for 95 per cent of the total coir and coir products produced in India.

The tertiary sector, the largest contributor to Kerala‘s economy, grew at a rate of 12.5 per cent in 2007-08, over the previous year. The sector was driven by trade, hotels, real estate, transport and communications. The state is known as the ‘information gateway‘ of the country. Kochi, which is connected by two submarine cables and satellite gateways that directly support cities including Bangalore, has emerged as a unique information technology (IT) destination.

As of December, 2008, the outstanding investments in the state amounted to US$ 29 billion, with the services sector accounting for a major amount of the investments.

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