Mandi is the most fastest developing city of Himachal Pradesh with the 2nd largest economy in the state and the most important major city of central part of Himachal, located on cross junction of National Highway-20, 21 and 70. It acts as a gateway to Kullu, Lahaul, Leh Ladakh, area of Jammu & Kashmir. Being District headquarters and Zonal headquarters, the entire District and state depends upon the city for trade & commerce, services and civil administration. The economy of the region is predominately agrarian as around 79% of the total population is dependent on agriculture and activities allied to it, for earning their livelihood. Balh Valley is known for producing quality wheat, paddy, and vegetable crop where the water drainage system and sprinkle system of irrigation have been adopted. The crops of corn maize, wheat, rice and vegetables are grown in other parts of the district, which cater to the demand of sizable population. A milk processing plant run by H.P. State Co-Operation-Milk- Federation at Chakkar is at a distance of 8 kilometers from Mandi. It has intake of 9000 liters milk per day. It produces pure Ghee, butter and flavor milk and its sales are 5000 to 6000 liters of milk per day.
The people of Mandi follow an agrarian economy and cultivate rice, pulses, millets, tea, sesame seed, groundnut, sunflower oil and herbal products. Himachal Pradesh Town and Planning Department works for Mandi Planning area(MPA). More than 9,000 farmers are directly involved in cocoon cultivation for producing Silk in lower hills of Mandi District. Mandi District is also facing tough competition from China, which is marketing raw silk at much lower rates in the market.
Many Hectares of land in Mandi is also under Apple production. Apple are generally planted during December every year. The area under fruit in Mandi is about 15 per cent of the total area under fruits in Himachal Pradesh. Mandi raw silk has acquired wide fame but the salt mines at
