Kerala's economy is predominantly service-driven, standing apart from the traditional industrialized models of other Indian states. A massive contributor to the Gross State Domestic Product (GSDP) is foreign remittances sent by the Keralite diaspora in the Middle East, which historically accounts for roughly 20-30% of the state's income.
While industrial manufacturing is relatively low due to high population density and stringent environmental and labor regulations, the state excels in human-capital-intensive sectors. Major economic drivers include tourism, healthcare, information technology, and education. Cost of living is higher than the Indian average, but this is offset by higher minimum wages, superior public services, and lower poverty rates.