The economy of Kerala is the 10th-largest in India with ₹7.82 trillion (US$110 billion) in gross state domestic product (GSDP) and a per capita GSDP of ₹204,000 (US$2,900). After the States Reorganisation Act, 1956, the modern-day state of Kerala was formed by merging the Malabar district of Madras State (excluding Gudalur taluk of Nilgiris district, Lakshadweep Islands, Topslip, the Attappadi Forest east of Anakatti), the taluk of Kasaragod (now Kasaragod District) in South Canara (Tulunad), and the erstwhile state of Thiru-Kochi (excluding four southern taluks of Kanyakumari district, and Shenkottai taluks). The Malabar region, in the northern part of Kerala, had been a part of the Madras province of British India, which later became a part of the Madras State post-independence. They united to form the state of Thiru-Kochi in 1949. At the time of Indian independence movement in the early 20th century, there were two major princely states in Kerala: Travancore and Cochin. In the 15th century, the spice trade attracted Portuguese traders to Kerala, and paved the way for European colonisation of India.

The region's prominence in trade was noted in the works of Pliny as well as the Periplus around 100 CE. The region had been a prominent spice exporter since 3000 BCE. The Ay kingdom in the deep south and the Ezhimala kingdom in the north formed the other kingdoms in the early years of the Common Era (CE).

The Chera Dynasty was the first prominent kingdom based in Kerala.

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