Investors backing out? Kerala sees withdrawal of investment proposals worth Rs 43,421 crore

THIRUVANANTHAPURAM: Investment proposals worth more than Rs 1 lakh crore have been announced at global investor meets held in Kerala over the past 10 years. At last year’s Investors Meet alone, investors pledged projects worth Rs 1.53 lakh crore. While the government claims that Kerala is investor-friendly and ranks among the leading states in ease of doing business, studies suggest that these claims remain largely on paper. The studies point to shortcomings in making land available for projects and providing government support as major reasons for the situation.

Reports separately prepared and submitted to the Centre by the Gulati Institute of Taxation, NITI Aayog and the Department for Promotion of Industry and Internal Trade (DPIIT) highlight the challenges. Of the private investment proposals worth Rs 46,981 crore made over the past 10 years, proposals worth Rs 43,421 crore were withdrawn. According to the Gulati Institute, only Rs 6,101 crore was invested in the private and joint sectors over the past five years.

Kerala ranked 17th among states and Union Territories in NITI Aayog’s first State Investment Friendliness Index. The state was placed in the second category, known as ‘Front Runners’, with a score between 45 and 50. States scoring above 50 were classified as ‘Top Performers’. Gujarat, Maharashtra, Karnataka, Uttar Pradesh and Tamil Nadu were among the top-performing states. In Kerala, the availability of infrastructure was the only major investment-friendly factor, with a score of 50%.

Shortcomings in land and government support

1. The study identified delays in land acquisition and the time taken to clear applications as major factors discouraging investors from choosing Kerala.
2. Lack of administrative support is another concern. The support provided by government systems received a score of only 26%.

Kerala also lags in FDI

Kerala’s share of India’s total foreign direct investment (FDI) has remained below 1% over the past six years, at 0.64%. This is the lowest among the southern states. In 2025-26, Kerala’s FDI equity inflow fell 1.5% to Rs 3,281.21 crore from Rs 3,330.26 crore in the previous year. Maharashtra led the country with an FDI inflow of Rs 1,64,875 crore, followed by Karnataka with Rs 1,12,869.88 crore and Tamil Nadu with Rs 41,197.97 crore. Andhra Pradesh recorded Rs 5,354.40 crore.