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With Advent of Mobile phones with Video Camera blue films are no longer a south Indian speciality and many normal middle class people are experimenting by making thier own films. But yes for commercially produced p0rn in India Kerala was the hub. but those are disgusting BFs nd you will puke watching them.
The reason may be that till very recently Kerala had very liberal sexual code and relationships such as Sambandham ( One men's wife sleeping with a rich/ powerful person ) which were considered illicit were valid and socially acceptible there so probably that may be a reason