Back in 2007, in my book, The Elephant, the Tiger, and the Cell Phone, I described the Indian economy as an “old elephant”, a creature with a “big, slow, lumbering” presence and a “long but not always happy history”. For decades, this elephant trudged along under the weight of stagnation, constrained by policies of self-reliance that inadvertently stifled growth.
However, the elephant’s journey took a decisive turn in 1991 when India embarked on a path of economic reform. Liberalisation, privatisation and globalisation injected new vitality into the economy, gradually replacing the elephant’s “old fat” with “muscle”. Over time, something extraordinary began to emerge—”large black stripes” swirling across its form. These stripes, bold and dynamic, symbolised the rise of a new India: an India of entrepreneurs, innovators, and startups. The elephant was evolving into a tiger—sleek, agile, industrious, and ready to leap into the future.
Is something similar happening to Kerala? Startups have suffused India’s—especially Kerala’s—economy, becoming ubiquitous. Indeed, according to the 2024 Global Startup Ecosystem Report, which analysed data from over 4.5 million companies across 300-plus entrepreneurial innovation ecosystems, Kerala has forged a startup ecosystem that, at the end of an 18-month period last year, was valued at a whopping $1.7 billion, five times more than the global average during this same period. Between July 1, 2021 and December 31, 2023, while the worldwide average growth was 46 percent, Kerala recorded a staggering 254 percent compound annual growth rate: a phenomenal feat.
This is a welcome change from what we had all heard and assumed about Kerala. It was said as recently as a year or two ago that whereas it takes three days to open a business in Singapore or America, it takes an average of 114 days in India—and 236 in Kerala. But just a couple of weeks ago, Kerala’s industries minister P Rajeev announced that one can now open a business in Kerala in “two minutes”.
If true and not just hyperbole, this is an astonishing development. Not just single-window approvals, but approvals of unbelievable rapidity seem to be happening. As Rajeev pointed out, Kerala has significantly improved its ranking in ease of doing business, moving from 28 (out of 29 states) to a top position. The state has implemented a new industrial policy focusing on knowledge-based industries, including AI, blockchain technology, and machine learning. Under the state’s “Year of Enterprises” initiative, over 2,90,000 MSMEs have been established, with significant investments and support for women and transgender entrepreneurs. I had been constrained to observe in the past that “god’s own country” was the devil’s own playground for business. If that is no longer true, we all have reasons to celebrate.
As India’s entrepreneurial ecosystem expands, Kerala is beginning to stand out as a model of economic innovation and sustainable growth. There is still a long way to go: I have pointed out that while many states have had the tragic experience of enduring farmer suicides, only Kerala has recorded cases of investor suicide—when people have sunk their life savings into business ventures and seen them lost because of labour trouble, political hostility and/or bureaucratic obstruction. This is why I have called for the state to adopt an Investor Protection Act, so investors can be assured their capital will be safe except for normal business downturns. Kerala will have to update its laws, slash regulations and streamline government processes for Rajeev’s claim to become true across the board.
But the vision and intention are admirable. Kerala, with its strong historical foundation and strategic economic initiatives, has emerged as a dynamic centre for start-ups. Kerala’s startup ecosystem has experienced impressive valuations and rapid scaling, positioning the state as a key player in India’s economic ascent and a recognised leader in fostering entrepreneurial excellence.
In 2023, startups in Kerala raised $33.2 million, marking a 15 percent increase from the previous year, with seed-stage funding up by 40 percent. The Kerala Startup Mission has been at the forefront of this expansion, working to establish the state as a global hub for deep tech innovation. A testament to this vision is the $180 million emerging technology hub being developed at Technocity, Thiruvananthapuram, to complement the nation’s first-ever Technopark, established in my constituency in 1992. The state also ranked highly in the 2024 Global Startup Ecosystem Report, standing out for its affordable tech talent and performance. Thiruvananthapuram hosts the annual “Huddle Global”, the world’s largest beach start-up festival, attracting tech entrepreneurs, start-ups and policy mavens from across the country and increasingly the world to confer in the state capital.
Notably, Kerala’s commitment to advancing its startup sector is further demonstrated by the recent establishment of India’s first digital science park in Thiruvananthapuram, a $181-million multi-disciplinary initiative. With such dynamic growth, Kerala is well-positioned to continue leading India’s tech and entrepreneurial transformation, contributing to the nation’s larger vision of becoming a global economic powerhouse.
That this transformation has begun to occur under a communist-led LDF government seems astonishing, but it is not entirely surprising. The communists in Kerala, like their counterparts in West Bengal at the beginning of the century, understood that the path to growth and prosperity for their people lies in capitalism, entrepreneurship, and initiative, not in red flags, strikes, and agitations. There is a perception that this attitude only holds when they are in government and that they will return to their bad old ways if they lose the next state elections in 2026.
It is my hope and exhortation that this will not be the case and all political parties in the state will appreciate the urgent necessity for economic transformation to pull the state out of the doldrums it has found itself in. If all sides commit themselves to continuing on the path that has begun to be carved out in the state, the future of Kerala can once again be bright. And the lumbering Kerala elephant will become a lithe, sprightly, bounding tiger.
(Views are personal)
(office@tharoor.in)
Shashi Tharoor | Fourth-term Lok Sabha MP from Thiruvananthapuram and the Sahitya Akademi winning author of 24 books, most recently Ambedkar: A Life