India: Kerala can’t afford to lose Kitex’s Rs35 billion investment

In Kerala, it’s always politics that matters. Understandable because the Nilambur by-election has just been held and everyone - even those with only a casual interest in Kerala politics – is waiting keenly to find out who gets to win this time. (Until next elections by May next year.)

Which is probably why the Kitex issue kept playing only background noise to whatever’s happening in Nilambur. But give the Kitex saga a closer look, and there’s serious investments that look likely to leave Kerala in pursuit of a better working environment.

It’s no secret that Kitex’s – a garment maker that’s among the biggest exporters in India – Sabu Jacob, the Managing Director, is not exactly on friendly terms with the CPM-led LDF government. And the personal relations between Kerala’s Industries Minister P. Rajeev and Jacob seem to deteriorate with each passing statement made by them. (Kitex is also one of the biggest employers in the state’s private sector.)

Now, it wouldn’t have mattered if it was just personal animosity or an ego tussle. But it does matter when investments in the range of Rs35 billion are being talked about. Investments that could well go to some other state, with Andhra Pradesh in the driving seat to get it.

If Kerala were a bustling economy and an investment magnet for businesses, one might be in a position to say goodbye to Rs35 billion. But it’s not, and such is the situation that Kerala can’t afford to lose out even on a Rs1 billion commitment by some business venture. This is the stark fact that the Kerala economy – and its prospects – are exposed to.

Sure, dealing with a businessman like Sabu Jacob is not easy, and he’s someone who has also leaned into the political space through the Twenty20 party. He has never shied away from making caustic remarks, and specifically against Rajeev. But to treat him as a rival politician and not a businessman who has the wherewithal to commit Rs35 billion should not be the route the Kerala authorities should be taking.

It only sends out the wrong messages, and amplifies what many keep repeating about Kerala not having an investment-friendly environment. All of which will be a pity because it was this Kerala government that oversaw the opening of the biggest public-private partnership venture the state has seen – the recently opened Vizhinjam deep sea port. And with the Adani Group as partner.

The same combo is working on the re-development of the international airport in the state capital Thiruvananthapuram. These projects have brought about a qualitative change in how Kerala is perceived – and things should only get better.

But the renewed war of words over Kitex’s latest investments is just not what Kerala needs. The controversy hangs in the air, especially with the next state elections less than a year in the distance. New investments, even prospective ones, into the state should not be made to wait until it gets decided who will form the new government.

Treat Sabu Jacob as a businessman and less of a politician. Kerala gains from doing so.