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

Kerala has improved its position to 11th among all states in the NITI Aayog’s Export Preparedness Index (EPI) 2024 rankings released earlier this week. In the previous edition of the Index for 2022, the state was ranked 19. The state scored 44.03 and found a place in the challenger category, compared to Maharashtra, the leading state with a score of 68.01. The index takes into account several factors, including export policy, business environment, infrastructure quality and export performance.

The report notes that Kerala also witnessed a remarkable year-on-year export growth of 86.9% in the financial year, with export value reaching ₹68,375 crore, underscoring the state’s increasing competitiveness in global markets. In 2023-24, Kerala achieved a Gross Domestic Product (GSDP) of ₹11.1 lakh crore. Substantial growth was observed in the micro, small and medium enterprises (MSME) sector, with an increase of 97.7% in 2023-24 over the previous year, indicating a thriving entrepreneurial ecosystem.

Kerala’s export profile includes sectors such as petroleum products, spices, maritime products, coconut and information technology. Petroleum products account for nearly 48% of the state’s total merchandise exports. Of Kerala’s total exports of ₹68,375 crore, ₹32,635 crore comes from petroleum, driven by the production and refining capacity of the Kochi refinery. The state’s well-diversified export basket reaches more than 100 countries, with strong West Asian ties, supported by its large diaspora, the report said.

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

Challenges

According to the report, Kerala’s industrial growth is slowed by the lack of large, coherent land due to high population density, small plots and strict land use regulations. High costs, local resistance and complex negotiations make acquiring land difficult. The report further notes that strengthening cold chains, modern packing houses and sterilization units for spices will reduce post-harvest losses and meet stringent international standards. Improved logistics through Cochin and Vizhinjam ports, along with improved air freight infrastructure in Thiruvananthapuram, Kochi and Kannur, will expand the global reach of perishables.

The report is cautionary, saying that without strategic interventions to retain talent, boost R&D and promote innovation ecosystems, Kerala’s industrial dynamism and long-term sustainability of exports could be at risk.