Kerala’s cashew industry, once a thriving symbol of the state’s industrial legacy and a major source of employment for women, is facing one of its toughest phases. The cashew industry has long been one of Kerala’s most prominent traditional agro-based sectors, with Kollam famously known as the ‘cashew capital of the world’. At its zenith, around 830 formal and informal units once operated in the state, employing nearly 300,000 people – 90 percent of them women. Today, only about 100 units remain active, supporting roughly 100,000 workers. But there is now a glimmer of hope. In April 2025, the state government approved the recommendations of an Expert Committee set up in 2022 to address the deepening crisis in the sector. The move has sparked cautious optimism among workers and entrepreneurs alike. Why the industry is failing Cashew was once a prized export commodity from Kerala, but the state’s share in India’s exports has steadily declined over the years. While public sector undertakings (PSUs) have kept their doors open despite mounting losses, many private factories have shut down. The Kerala State Cashew Development Corporation (KSCDC), which runs 30 factories, has operated at a loss since 1974. In 2023–24 alone, it posted a loss of ₹105.99 crore. A woman labourer at a cashew processing unit in Kollam KSCDC and the Kerala State Cashew Workers Apex Industrial Co-operative Society together run 40 units employing around 17,000 workers. But the private sector continues to dominate processing, even as it struggles to stay afloat. In the state assembly in March, Industries Minister P Rajeev acknowledged the depth of the crisis. He pointed to multiple causes: a shortage of raw cashew nuts, high production costs, and international competition from fully mechanised units in Vietnam and African countries such as the Ivory Coast. The minister also said that the Union government’s policies – such as imposing an import duty on raw cashew, demonetisation, and the scrapping of export incentives in 2020 – have further deepened the crisis. Despite these challenges, public sector factories continue to operate, largely using imported nuts procured through the Cashew Board. Also Read: Kerala’s rise in ease of doing business: What fuels historic leap? Need for a strategic, socially driven revival The Expert Committee cited a fundamental lack of competitiveness as the root cause of the sector’s decline. This, it said, arises from external market changes and Kerala’s inherently high-cost operating environment. The committee stressed that this disadvantage cannot be easily corrected through policy schemes or temporary financial assistance alone, making it unsustainable to justify such measures purely on economic grounds. Still, the committee argued for a revival strategy based on the sector’s social significance and its role in preserving Kerala’s industrial heritage. It called for a carefully structured support mechanism with clear boundaries to avoid fiscal strain and inefficiencies. Among the key suggestions: reposition Kerala cashew as a premium, high-value product in niche domestic and international markets. It recommended boosting value-added products, leveraging Kerala’s brand strength, and tapping global e-commerce platforms. The committee also stressed the need for collaboration between public and private players, backed by digital transformation, to safeguard livelihoods, uphold the legacy of Kerala’s cashew industry, and gradually rebuild competitiveness. Cashew cultivation also faces serious challenges. Kerala currently ranks sixth in the country in raw cashew production, with an output of 0.76 lakh metric tonnes from a cultivation area of 1.10 lakh hectares. According to the Economic Review 2024, the Kerala State Agency for the Expansion of Cashew Cultivation (KSACC) has helped expand farming to nearly 99,000 hectares as of 2019–20, setting up model farms and distributing grafts. Yet expansion has slowed due to limited cultivable land, absence of plantation status for cashew, and competition from crops such as rubber. Nearly 70 percent of the cashew trees in Kerala are aged, local varieties with low productivity. Climate change – particularly erratic rainfall and high humidity – has further worsened conditions. Experts stress the need for replanting and adopting high-yield varieties to ensure sustainable growth in the sector. Political implications and state response Reviving the cashew industry is not just an economic priority – it carries political weight. The sector directly supports the livelihoods of nearly a lakh workers, the vast majority of them women from marginalised and economically vulnerable communities. Its collapse has worsened rural distress and unemployment, especially in and around Kollam. A meaningful revival would not only secure livelihoods but also offer a boost to the state government’s pro-worker credentials ahead of upcoming elections. The state government, while approving the Expert Committee report, also suggested complementary initiatives to strengthen the sector. The government has directed the Industries and Commerce Department to draft revival projects based on the committee’s recommendations. These include phased mechanisation, modern technology adoption, procurement reform, and improved working conditions. Based on the committee’s recommendations, the state had previously announced ₹30 crore in the 2022–23 budget for private sector revival, followed by ₹2 crore in 2024–25 and ₹30 crore again in the 2025–26 budget. An additional ₹2 crore each has been allocated for women-friendly workspaces and support to struggling small and medium private factories.