Kerala improves rankings from 19 to 11 in NITI Aayog’s export preparedness index

Kerala has improved its ranking to 11 among all States in the NITI Aayog’s Export Preparedness Index (EPI) 2024 rankings published earlier this week. In the previous edition of the Index for 2022, the State was ranked 19. The State achieved a score of 44.03 and found a place in the challenger category, in comparison to Maharashtra, the leading State with a score of 68.01. The index is prepared considering multiple factors, including export policies, business environment, quality of infrastructure, and export outcomes.

The report observes that in the financial year, Kerala also experienced a remarkable year-on-year export growth rate of 86.9%, with exports valued at ₹68,375 crore, highlighting the State’s increasing competitiveness in global markets. In 2023-24, Kerala achieved a Gross State Domestic Product (GSDP) of ₹11.1 lakh crore. In the Micro, Small and Medium Enterprises (MSME) sector, substantial growth was witnessed, with an increase of 97.7% in 2023-24 over the previous year, indicating a thriving entrepreneurial ecosystem.

Kerala’s export profile spans sectors including petroleum products, spices, marine products, coir and information technology. Petroleum products account for nearly 48% of the State’s total merchandise exports. Out of Kerala’s total exports of ₹68,375 crore, ₹32,635 crore comes from petroleum oils, driven by the production and refining capacity of the Kochi refinery. The State’s well-diversified export basket reaches over 100 countries, with strong West Asian linkages supported by its large diaspora, according to the report.

The report notes that high rankings in Ease of Doing Business, backed by digital platforms like K-SWIFT and K-CIS, along with investor-friendly laws such as the Kerala Investment Promotion and Facilitation Act and MSME Facilitation Act, streamline clearances and reduce compliance burdens. Entrepreneurship drives and policy support further enhance Kerala’s competitive, export-friendly ecosystem.

Challenges

According to the report, Kerala’s industrial growth is slowed by the lack of large, connected land due to high population, small plots and strict land-use rules. High costs, local resistance, and complex negotiations make land acquisition difficult. It further notes that strengthening cold chains, modern packhouses and spice sterilisation units will reduce post-harvest losses and meet stringent international standards. Improved logistics via Cochin and Vizhinjam ports, along with enhanced air cargo infrastructure at Thiruvananthapuram, Kochi, and Kannur, will expand global reach for perishables.

Sounding a note of warning, the report says that without strategic interventions to retain talent, boost R&D and foster innovation ecosystems, Kerala’s industrial dynamism and long-term export sustainability could be at risk.