Kerala: Entry into India for Sri Lankan businesses

Kerala and Sri Lanka have several things in common – it looks exactly the same in many ways. Lush greenery, coconut and paddy fields galore

We launched Lanka India Business Association (LIBA) and our ambition is to foster closer business relationships between Indians and Sri Lankans.

Our key purpose is to figure out how we can bring FDI into Sri Lanka from India and take Sri Lankan businesses into India. 

Therefore, as the President of LIBA, when I received an invitation to go to an ‘Invest In Kerala’ summit in February, I jumped at the opportunity. 

Kerala and Sri Lanka have several things in common – it looks exactly the same in many ways. Lush greenery, coconut and paddy fields galore. 

But dig deeper and there are even more striking similarities – the food – hoppers, pittu, string hoppers are all common fare in the Kerala palate as it is in Sri Lanka. 

Dig even deeper into trade links and you will find a place called Kochikade a little after Negombo in Sri Lanka which was named such because in the past there were kades (shops) run by people from Kochi in Kerala, in Negombo. Given this old history I was not surprised to find a restaurant call Colombo’ in the heart of Kochi city during my visit. Of course it would have been perfect if it had been called ‘Negombo’ given the Kochikade context. 

But beyond the past into the present – my intention on visiting Kerala was to assess if there is an opportunity for Sri Lankans to expand their businesses into India. And could Kerala be that entry into India?

All reminiscent of Sri Lanka

Looking at the numbers for context – Kerala has a population of 33 million compared to 23 million in Sri Lanka. But the annual GDP of Kerala is $ 167 billion as compared to Sri Lanka at $ 87 billion. The Kerala economy is growing at 6-7% per annum. And the per capita GDP in Kerala state is at $ 4,300. Similar to Sri Lanka which pre the economic crisis had similar numbers. Kerala boasts some of the best ‘quality of life indicators’ with very high literacy rates, low unemployment and higher life expectancy and low infant mortality rates as compared to other Indian states. All reminiscent of Sri Lanka which boasts the best numbers in South Asia. Kerala it seems has put emphasis and valued similar things as Sri Lanka over the years. 

Kerala and Sri Lanka both rely heavily on remittances from workers employed abroad. This per se is not such a great statistic but underscores further the commonalities between the state of Kerala in India and Sri Lanka. 

But my experience at the ‘Invest in Kerala’ summit convinced me that Sri Lankans should look at Kerala and ride on its potential economic dividend in the years ahead. The ruling party in Kerala has set an aggressive target of becoming a $ 1 trillion economy by 2047. This is in line with the ambitious vision of the PM of India – Sri Narendra Modi who has set a target for India in 2047, a hundred years after India’s independence. Mission 2047 aims to make India a developed economy by 2047 and each state in India is competing to contribute and accelerate their growth by that year.

Vision, plans and blueprint

But what enthused me was the vision, plans and blueprint laid out by the government of Kerala during the Invest in Kerala summit. Clear goals were stated and presentations were made with specific projects highlighted as potential opportunities. Be it tourism or ports or agri related or AI – in each area the government representatives invited investors stating clearly the investment needed, the ROI that can be expected and they even offered concessionary loans to qualifying investors.

One of the most amazing things to observe at the summit was that, at the opening session the stage was shared by the central Indian minister of industries from Delhi, the Kerala CM and his industries minister (who is the driver of the summit) and the opposition leader of Kerala state. Each of these politicians were from different political parties but spoke the same language – of pursuing the goals of economic growth without compromise. The opposition leader of Kerala surprised one and all by stating on record that the role of a worker is to contribute profits for a company and as the leader of trade unions he urges them to work to create profits. 

He stated the time for militant trade unionism is over in Kerala. He boasted that in the four years that his party has been in opposition, they have not allowed a single hartal (strike) to happen in companies. And that he wholeheartedly supports the ruling party’s initiative to generate investments into Kerala. 

The intent, the energy and the ambition was there for all to see in Kerala. And this makes Kerala a lucrative opportunity for ambitious Sri Lankan businesses. 

Many reasons to evaluate Kerala closely

There are many reasons to evaluate Kerala closely for Sri Lankan businesses.

The distance between Sri Lanka and Kerala is 445 nautical miles or 770 km – for perspective the distance between Matara to Point Pedro is 525 km. And Kochi in Kerala to Chennai in Tamil Nadu is 700 km. Kochi in Kerala to Mumbai (India’s business capital) is 1,500 km. The sheer physical proximity between Sri Lanka and Kerala can provide an unparalleled opportunity for trade. And improved connectivity can do wonders for two-way trade.

Many young Sri Lankans see the business opportunities in India but they find the prospect of navigating India’s business terrain to be daunting. But one way to reduce stress is to take one Indian state at a time. And the entry point could well be Kerala State.

The natural similarities – topography, food, values between Kerala and Sri Lanka could be compelling factors encouraging engagement.

We at LIBA intend to get more detailed. To evaluate actual need spaces in Kerala that exist which Sri Lankan businesses can sustainably provide. During my visit the chairman of the Kochi chamber gave me an insight into one such potential opportunity. He said we in Kerala love eating meat. And currently the processed meat we get from other states is sub optimal. He had been to Sri Lanka. And said if we could bring high quality processed meat into Kerala from Sri Lanka, I have no doubt people will have no problem paying premiums for the better quality.

Now there itself is a huge business opportunity for Sri Lanka. We at LIBA will explore more such opportunities in Kerala in the days ahead.

(The writer is the President of Lanka India Business Association – LIBA and can be reached at [email protected]. For more information on LIBA go to www.liba.lk.)