Kerala is a leading agricultural state in the country, specialising in rubber, spices and coir production. It has also been promoting knowledge-based industries such as IT/ITeS, computer hardware, and biotechnology.

At current pries, the Gross State Domestic Product (GSDP) of Kerala was about US$ 40.4 billion in 2007-08. The state’s GSDP grew at a CAGR of 12.3 per cent between 1999-2000 and 2007-08. Kerala recorded higher GSDP growth rates in the last decade as compared to other states. At current prices, the Net State Domestic Product (NSDP) of Kerala was about US$ 35.0 billion in 2007-08. The NSDP grew at a CAGR of 12 per cent between 1999-2000 and 2007-08.

The secondary sector has been the fastest growing, at a CAGR of 14.5 per cent and driven by manufacturing, construction, electricity, gas and water. The tertiary sector, the largest contributor to Kerala’s economy, grew at a rate of 12.5 per cent in 2007-08 over the previous year; it was driven by trade, hotels, real estate, transport and communications. While the primary sector’s share in the GSDP has been declining, the mining and quarrying segment in this sector registered a high growth rate of 39.8 per cent in 2007-08 over the previous year.

Tourism is a primary economic activity in Kerala. The sector contributes about 8 per cent to the GDP of the state. In 2008, the foreign exchange earnings from tourism grew by 16.1 per cent to US$ 750 million; foreign tourist arrivals increased from 515,808 in 2007 to 598,929 in 2008.

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