- Kerala promotes a knowledge-based economy focusing on high-skill sectors at WEF 2026, said Minister P Rajeev
- The state is prioritising 22 sectors including IT, tourism, electronics, and medical devices
- Kerala is developing a space park and expanding private space ecosystem with ISRO's legacy
Kerala is stepping up efforts to attract global investments as it presents its evolving economic strategy at the World Economic Forum (WEF) this year, State Industries Minister P. Rajeev told NDTV at the outskirts of Davos 2026. He highlighted the state's transition toward a knowledge-based economy and its push for high-skill sectors.
Rajeev noted that Kerala had used last year's WEF presence to underline the state's economic significance, and has since built on the momentum by organising the Invest Kerala Global Summit 2025, which he described as a "successful" effort to draw investor attention.
Building On Strengths, Acknowledging Constraints
Positioning Kerala as a small but strategically unique state, Rajeev said the government's industrial policy is shaped by a clear-eyed assessment of its limitations and advantages.
"Kerala has scarce land, environmental constraints, and a fragile ecology," he said. "But our strengths are substantial-highly skilled human resources, a favourable climate, progressive policies, and robust healthcare and education systems."
Given these factors, the state is steering away from large, polluting manufacturing industries and instead focusing on 22 priority sectors, including IT, tourism, electronics, medical devices, and emerging technologies.
"Where knowledge becomes capital-that is the focus area for Kerala," Rajeev said.
Boost From Space-Tech, GCC Interest
According to Rajeev, investor response has been particularly strong in the space sector, where Kerala has historical and institutional advantages. With ISRO's legacy at Thumba and developing higher-education hubs, the state is now setting up a space park to nurture an expanding private space ecosystem.
He added that Kerala is also partnering with international companies to enter the UAE with AI-based space systems.
The state is additionally seeing heightened interest in Global Capability Centres (GCCs). Kerala has initiated plans to establish two GCC cities, while the minister emphasised that the talent pool and "plug-and-play" development ecosystem make the state especially attractive for global firms.
Investors are also exploring opportunities in data centres and tourism infrastructure, Rajeev said.
From Rank 28 To No. 1 In Ease Of Doing Business
The minister highlighted major improvements in Kerala's business-enabling environment. He noted that the state had once ranked 28th in ease of doing business but climbed to No. 1 last year, a position it has maintained.
According to Rajeev, FICCI has identified Kerala as having the best single-window clearance mechanism in the country.
Under the state's simplified regime, industries with investments below Rs 100 crore-excluding those in the red category-can be set up without any licences for three-and-a-half years, he said.
"One significant feature of Kerala is that there are no hidden costs for establishing an industry. Everything is transparent," he added.
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Knowledge Economy At The Core
Emphasising the state's long-term transformation, Rajeev reiterated that Kerala's future growth narrative is anchored in a knowledge-driven economic model that leverages human capital rather than land-intensive manufacturing.
"Our goal is to build a modern, sustainable economy where knowledge is the key capital," he said.
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