Lakshadweep is the India's smallest Union Territory, known for its chain of coral islands. There are 36 islands (three reefs and six submerged sandy banks) in all, of which 10 are inhabited and scattered in the Arabian Sea at a distance of 220-440 kms off the west coast of Kerala.

In Lakshadweep, tourism is one of the few areas that can play a vital role in generating revenue, jobs and overall island growth. Lakshadweep is already recognised as a tourist destination because of its isolated islands and scenic beauty. In the Budget 2022-23, Lakshadweep was allocated Rs. 9.5 crore (US$ 1.24 million) for tourism development in the union territory.

Bangaram is forecasted to be a key international tourism destination because of its abundant marine fauna and activities like water sports such as scuba diving, wind surfing, snorkelling, surfing, kayaking, canoeing, water skiing, yachting and evening trips to the sea.

As of March 2022, Lakshadweep had a total installed power generation capacity of 3.27 MW, which was generated by private utilities. With the SunSource Energy power plant project, Lakshadweep is witnessing its largest solar project that will power four different islands - Agatti, Kavaratti, Bangaram and Thinnakara.

In FY22 (until May 2021), the exports from Lakshadweep stood at US$ 140,000.

Below are some of the major initiatives taken by the Government to promote Lakshadweep as an investment destination:

• In April 2022, the Lakshadweep Administration declared the Wednesday of every week as a 'Cycle Day' for government employees, which will help curb pollution and decrease the carbon footprint of the union territory.
• In January 2022, the Electricity Department of Lakshadweep invited bids to acquire its distribution company (DISCOM), which is responsible for electricity distribution and retail supply. The winning bidder will also be responsible for developing clean energy projects in the union territory.
• In October 2021, the submarine optical fibre cable (OFC) project was awarded to Japanese conglomerate NEC’s Indian subsidiary. By 2023-24, the Rs. 1,072 crore (US$ 140.11 million) submarine OFC project is expected to be completed, which will improve online education and e-medicine, and allow local people new opportunities in the field of education, employment and business.
• In September 2021, large-scale farming of indigenous seaweeds was launched in nine inhabited islands of Lakshadweep under the guidance of Central Marine Fisheries Research Institute (CMRI). The plan is to produce 30,000 tonnes in a year, which will be worth Rs. 75 lakh (US$ 98,120).
• In August 2021, the Lakshadweep administration invited global tenders for building eco-tourism beach villas and water villas in the Kadamat, Minicoy, and Suheli islands at an estimated project cost of Rs. 813 crore (US$ 106.36 million).
• In March 2021, the Ministry of Earth Sciences announced that India and Norway have agreed to jointly work in the area of marine spatial planning in the oceanic space for the next five years. The agreement is a part of the ‘Indo-Norway Integrated Ocean Initiative’, wherein Lakshadweep and Puducherry have been identified as the pilot sites for the project. The Government of India's initial investment for undertaking studies and planning are estimated to be Rs. 9 crore (US$ 1.38 million) annually.
• In February 2021, Lakshadweep and the National Co-operative Development Corporation (NCDC), an apex finance entity under the Union Agriculture Ministry, signed a pact to ensure all-round development of farmers and fishermen. This will help scale up farming operations of the farmers and fishermen for better access to quality input, technology, credit and market through economies of scale.
• In February 2021, the UT, in its proposal to the Ministry of Home Affairs, announced its plans to dedicate a tourist ship in the islands with the aim of developing cruise tourism and generate employment opportunities.
• In January 2021, the Ministry of Ports, Shipping and Waterways (MoPSW) began operations of seaplane services on select routes under a special purpose vehicle (SPV) framework through prospective airline operators. The proposed origin-destination pairs include Lakshadweep and the Andaman & Nicobar Islands. The project execution and implementation would be through Sagarmala Development Company Ltd. (SDCL), which is under the administrative control of the ministry.
• In December 2020, the Ministry of Agriculture declared Lakshadweep as India’s first UT to cultivate 100% organic produce.
• In February 2020, the Ministry of Tourism took initiatives under the ‘Ek Bharat Shreshtha Bharat Programme’— ‘Andaman-Lakshadweep Mahotsav’ to promote their products and boost tourism.
• Development plans have been prepared and are being implemented on the five islands of Lakshadweep, with a focus on job creation for islanders by promoting tourism and exporting seafood and coconut products manufactured in the islands.