Kochi - Economy

Economy

Kochi is widely referred to as the commercial capital of Kerala. Kochi is home to Cochin Stock Exchange, the only stock exchange in Kerala. It is also home to Federal Bank, the fourth-largest Private-sector bank in India. Being a major online trading centre in the country, SEBI has proposed to open it's local office in Kochi.

Availability of electricity, fresh water, long coastline, backwaters, good banking facilities, presence of a major port, container trans-shipment terminal, harbor terminal and an international air terminal are some of the factors which accelerated the industrial growth in the city and its adjoining district. In recent years the city has witnessed heavy investment, thus making it one of the fastest-growing second-tier metro cities in India. Sales tax income generated in the Kochi metropolitan area contributes heavily to state revenue. The district contributes the highest portion, 14.47%, of the state's GDP. Construction and manufacturing combined contributes 37%, and trade, tourism and hospitality together provides another 20%. Major business sectors include construction, manufacturing, shipbuilding, transportation/shipping, seafood and spices exports, chemical industries, information technology (IT), tourism, health services, and banking. Kochi is recognized as one of the seventeen major industrial cities of India by World Bank, Doing Business Group. However, in the 2009 rankings of ease to start and operate a business, among the 17 Indian cities selected, Kochi was rated as the second most difficult city to start business and was ranked 16th, above Kolkata.

As in most of Kerala, remittances from non-resident Indians (NRI)s is a major source of income. Eloor, situated 17 kilometres (10.5 mi) north of the city-centre, is the largest industrial belt in Kerala, with more than 250 industries manufacturing a range of products including chemical and petrochemical products, pesticides, rare earth elements, rubber processing chemicals, fertilisers, zinc and chromium compounds, and leather products. Fertilisers and Chemicals Travancore Limited (FACT), one of the oldest fertilizers and chemical industry in Kerala is located in Kochi. Kochi Refineries of (BPCL) at Ambalamugal is one of the largest oil refining facilities in South India. Petronet India has now almost completed Kochi LNG Terminal, for importing and storing natural gas, for energy and fueling needs. Central Government establishments like the Coconut Development Board, the Coir Board and the Marine Products Export Development Authority (MPEDA) have head offices located in the city.

Like elsewhere in Kerala, tourism is one of the strongest drivers of the local economy. Ernakulam district, in which Kochi is situated, ranks first in the total number of domestic tourists visiting Kerala, and thus contributes to the economy of the city. The tourist enclave at Fort Kochi and presence of several historical monuments, museums etc. as well as natural attractions like the Vembanad lake and the backwaters attract large number of tourists to the city. Presence of several leading hospitality brands have been a major source of employment for locals. The Kochi Port is one of the leading ports where international cruisers call on regularly. The city has the first marina facility in the country Kochi Marina which attracts large number of yacht-totters. Real Estate industry is also one industry which is contributing a lot to the economy of Kochi. Many players have entered the market and have developed residential properties.

Kochi is the headquarters of the Southern Naval Command, the primary training centre of the Indian Navy. The Cochin Shipyard, which was the largest shipbuilding facility in India until 2008, contributes to the economy of the city. The fishing harbour at Thoppumpady is a minor fishing port in the state and supplies fish to local and export markets. To further tap the potential of the all-season harbour at Kochi, an international cruise terminal and several marinas are being constructed.

Exports and allied activities are also important contributors to the city's economy. The Cochin Port currently handles export and import of container cargo at its terminal at Willingdon Island. The International Container Transshipment Terminal operating out of Vallarpadam, is India's largest transshipment terminal. Cochin Port Trust also planning to build an Outer Harbour near Puthuvype. Upon completion it will be the largest port in South Asia. Kochi's historical reliance on trade continues into modern times, as the city is a major exporter of spices and is home to the International Pepper Exchange, where black pepper is globally traded. The Spices Board of India and World Spice Organisation are headquartered in Kochi.

The IT and ITES related industries are growing up in Kochi. Availability of cheap bandwidth through undersea cables and lower operational costs compared to other major cities in India, has been to its advantage. Various technology and industrial campuses including the government promoted InfoPark, Cochin Special Economic Zone and KINFRA Export Promotion Industrial Park operate in the outskirts of the city. Several new industrial campuses are under construction in the suburbs of the city. SmartCity at Kakkanad is the prominent project under proposal. Cyber City at Kalamassery is another integrated IT township SEZ being planned in the private sector.

Kochi has an established electronics hardware industry with companies such as V-Guard Industries, FCI OEN Connectors and SFO Technologies. The Government of Kerala has announced a project to build an industrial park named Electronic City spanning an area of 340 acres (140 ha), to cater to the electronic hardware industries. The private operator NeST is building a Special Economic Zone specifically for electronics hardware spanning an area of 30 acres (12 ha).

The Cochin International Airport is in the process of setting up an aerotropolis at Nedumbasserry.