Kerala Announces ‘NRK City’ Plan with Tax Incentives to Attract Over $10 Billion from Gulf Investors

TDT | Manama
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Kerala is embarking on a bold initiative to strengthen its economic ties with the Gulf region by unveiling plans for a dedicated city for non-resident Keralites (NRKs) in Kannur district. Named NRK City, the project aims to attract more than $10 billion in investments and offers significant tax incentives to investors.

Transforming Remittances into Growth The NRK City project aims to convert the substantial remittances sent by Keralites abroad into productive sectors that create jobs and stimulate economic development. A state official emphasized, “The goal is to channel these funds into ventures that generate employment, rather than being limited to real estate investments.”

Investor-Friendly Incentives The state has introduced attractive schemes to encourage large-scale investments:

• For investments exceeding INR 100 crore: Only 10% of the premium is due in the first year, with a two-year moratorium and a 10-year installment plan.
• For investments between INR 50–100 crore: The upfront payment is 20%, followed by a two-year moratorium and a five-year repayment schedule.

Additionally, the state will reimburse 100% of the state GST component on capital investments and offer wage subsidies for local trainees during their first year of employment.

Empowering Women Entrepreneurs In a bid to foster economic participation among women, Kerala has announced the creation of a ‘Pink City’ in Kochi, designed specifically for women entrepreneurs. This initiative is part of the Year of Enterprises 3.0, which aims to establish 100,000 new micro, small, and medium enterprises in the 2024-25 fiscal year.

Global Summit and Strategic Engagement The Invest Kerala Global Summit, set for February 2025, will showcase investment opportunities in 22 priority sectors, including aerospace, AI, biotechnology, and electric vehicles. Kerala has already engaged with Gulf investors in the UAE and Saudi Arabia, highlighting the state's potential in high-tech manufacturing and sustainable industries.

Resolving Legacy Challenges Kerala is also addressing legacy challenges related to the SmartCity Kochi project, following the exit of Dubai Holding-owned Tecom. The state is negotiating compensation for Tecom's departure while working to meet the growing demand from over 100 technology firms seeking space in the IT park.

With its progressive policies and commitment to creating an investor-friendly environment, Kerala is positioning itself as a prime destination for Gulf investors, promising both substantial returns and long-term socio-economic benefits.

This ambitious plan was revealed during an exclusive interview with Gulf News.