Kerala is one of the few states to have marketed its natural beauty successfully to the leisure tourism sector. The state's unique heritage and cultural diversity have attracted tourists from around the world. BBC Travel survey has rated Kerala as the top favourite tourist destination among foreign travellers in 2018.

Kerala ranks second in the Investment Climate Index followed by Karnataka as per policy research working paper by the World Bank. The state stands second due to its world-class infrastructure and well-trained human resource pool. Kerala's traditional industries include handloom, cashew, coir, and handicrafts.

At current prices, Kerala’s total GSDP is estimated at Rs. 14.3 lakh crore (US$ 167.3 billion) in FY26. The state’s GSDP recorded a CAGR of 8.84% between FY16 and FY26E. As of February 2025, the state had a total installed power generation capacity of 7,345.50 MW, of which 2,282.01 MW was accounted by state utilities, 2,500.23 MW by central utilities, and 2,563.26 MW by the private sector. Thermal power contributed 3,254.69 MW to the total installed power generation capacity, followed by hydropower at 1,904.15 MW, renewable energy at 1,824.66 MW, and nuclear energy at 362.00 MW.

According to the Department for Promotion of Industry and Internal Trade (DPIIT), cumulative FDI inflows in Kerala were valued at Rs. Rs. 10,782 crore (US$ 1.36 billion) between October 2019-December 2024.

Exports from the state stood at Rs. 36,683 crore (US$ 4.30 billion) in FY25 (until February 2025). Kerala exported two key items including Engineering Goods and Spices.

The following are some of the major initiatives taken by the Government to promote Kerala as an investment destination:

• Under the State Budget FY26
  • Government allocated Rs. 2,870 crore (US$ 336.4 million) has been allocated as capital expenditure on roads and bridges. The Kochi Metro Rail system has been allocated Rs. 289 crore (US$ 33.9 million)
  • The government proposed Rs. 3,149 crore (US$ 369.1 million) has been allocated towards government primary schools, of which Rs. 3,147 crore (US$ 368.9 million) is for wages and allowances and Rs. 644 crore (US$ 75.5 million) has been allocated towards the PM Poshan Shakti Nirman scheme.
  • Government allocated Rs. 2,688 crore (US$ 315.1 million) has been allocated for allopathic health services in urban areas, and Rs. 1,379 crore (US$ 161.6 million) in rural areas.
  • Government allocated funds worth Rs. 1,539 crore (US$ 180.4 million) has been allocated for crop husbandry and Rs. 600 crore (US$ 70.3 million) has been allocated towards the rubber production incentive scheme.
• Cargo traffic handled by the Cochin port stood at 159,88,101 tonnes from April – August 2024.
• Under the State Budget 2024-25, the government allocated Rs. 2,931 crore (US$ 351.4 million) for roads and bridges.
• Under the State Budget 2024-25, the government allocated Rs. 10,087 crore (US$ 1.21 billion) for health and family welfare.
• Under the State Budget 2024-25, the government proposed Rs. 24,256 crore (US$ 2.91 billion) for improvements in education, sports, arts, and culture.
• In the State Budget 2024-25, the government allocated funds worth Rs. 1,720 crore (US$ 206.2 million) for urban development projects in Kerala, out of which Rs. 1,087 crore (US$ 130.3 million) has been allocated towards assistance to municipalities and municipal corporations.
• In the 2024-25 State Budget, Rs. 110 crore (US$ 13.2 million) has been allocated for urban water supply.
• In July 2024, the Ministry of Rural Development has approved the construction of 33 roads spanning 159.86 km in Kerala under the Pradhan Mantri Gram Sadak Yojana-III (PMGSY-III), aiming to enhance rural connectivity and boost economic growth. The project involves an estimated investment of Rs. 160.56 crore (US$ 19.3 million).
• Prime Minister Mr. Narendra Modi laid the foundation and dedicated to the state several projects of the Kochi Metro and Indian Railways totalling Rs. 4,500 crore (US$ 552.69 million) in September 2022.
• A training on Smart Farming using e-crop was inaugurated by Mr. P. Prasad, State Minister for Agriculture Development and Farmers Welfare, on 16th June 2022 at ICAR – CTCRI, Thiruvananthapuram by launching the e-crop-based smart fertigation facility.
• Cargo traffic handled by the Cochin port stood at 35,255 thousand tonnes in FY23.
• In FY23, the total marine products exports from Kerala accounted for US$ 1 billion.
• In FY23, the state’s passenger traffic stood at 8,812,531 at Cochin airport and 3,478,067 at Thiruvananthapuram airport.
• In 2021-22, the total production of horticulture crops in the state was expected to be 6,160.28 thousand metric tonnes and the area under production was 1,483.03 thousand hectares. In 2021-22, the total production of vegetables and fruits was estimated at 544.95 thousand metric tonnes and 1,939.452 thousand metric tonnes, respectively.
• As of July 2022, Kerala has 25 total notified SEZs. The state has a technopark in Thiruvananthapuram which has been instrumental in attracting global electronics manufacturers, an info park in Kochi, and a cyberpark in Kozhikode.
• Under the State Budget 2023-24, the government allocated Rs. 2,404 crore (US$ 293.3 million) for roads and bridges.
• In the State Budget 2023-24, the government allocated funds worth Rs. 1,856 crore (US$ 226.4 million) for urban development projects in Kerala, out of which Rs. 455 crore (US$ 55.5 million) has been allocated towards Smart Cities Mission.
• In May 2023, during an investor's meet, 24 of the 121 investors forwarded their letters of interest for an investment of Rs. 381.75 crore (US$ 46.6 million) in various sectors of the Kattakada constituency of Kerala.
• Union Railway Minister Mr. Ashwini Vaishnaw, in April 2023, informed that 34 railway stations in Kerala would soon be upgraded to world-class standards.
• The State Government of Kerala is planning to formulate a comprehensive urban policy based on the latest studies in urbanization, as proposed in the State Budget 2023-24. For this purpose, a commission will be constituted including international experts and institutions.
• The Union Government gave sanction for works worth Rs. 2,500 crore (US$ 305 million) in the second phase of AMRUT (Atal Mission for Rejuvenation and Urban Transformation) projects in Kerala.
• Kerala Chief Minister Mr. Pinarayi Vijayan in April 2023 said that the State would be transformed into a healthcare hub by providing better medical services and tourism opportunities in the sector. He said the government would take advantage of the area by exploring the global potential in the healthcare sector. The amount of Rs. 30 crore (US$ 3.7 million) has been allocated for the initial work to formulate and implement the "care policy" and prepare facilities for the same.
• Prime Minister Mr. Narendra Modi laid the foundation stone for India's first Digital Science Park in Kerala's Thiruvananthapuram district on April 25, 2023, marking a milestone in Kerala's transformation into a knowledge economy. The third-generation Science Park will come up close to the Digital University of Kerala at Technopark Phase IV - Technocity in the state capital.