Tamil Nadu is basically an agricultural state and it has vast tracts of land under cultivation. The main cultivable crop is paddy. Tamil Nadu is one of the leading producers of agricultural products in the country. The state is among the leading producers of rice, kambu, corn, groundnuts, sugarcane, and sunflower oil seeds in India. The farmers of the state are dependent on the monsoon rains and the rivers for irrigation. In rice production it is only behind Punjab.

The Tamil Nadu Agricultural University is also aiding the state's agriculture in a big way through ample research on newer varieties of crops. Many farmers are also growing the jatropha plant by using the wastelands for farming, and this plant is used for manufacturing bio-diesel.

However, though agriculture is the edifice of the business and economy of Tamil Nadu, the state also has a sound industrial base. In fact, it is the second most industrialized state in India, only Maharashtra being ahead of it. Many big multinational manufacturing conglomerates like Hyundai, Ford, Caterpillar, and Mitsubishi have set up car manufacturing plants in the state, in Special Economic Zones. At the same time, the Indian corporate giants like MRF, TI Cycles of India, Ashok Leyland, TVS, Mahindra and Mahindra, also have their factories here and they are providing ample job opportunities to many people of the state. Chennai is also known as the Detroit of India because of the presence of many car manufacturers and heavy engineering bigwigs here.

Tamil Nadu, with its strong agriculture and industry, is the fifth largest economy among the states of India. Last year, that is in 2006, the state registered a gross domestic product of $60 billion at current prices.

Textiles industry is one of the chief aspects in the business and economy of Tamil Nadu. Coimbatore is famous for the many textile mills and the numerous engineering industries which are present in and around the city. Maximum export of manufactured garments in India takes place from Tirupur, located in the Coimbatore district of the state. Namakkal is famous for its poultry eggs and also for the truck bodies which are built here, while Karur is not only famous for manufacturing textiles like bed sheets and linen but also for building of bus bodies. Kanchipuram is very famous for its silk saris, which are very popular all over the globe.

There are many power plants in this state like the Mettur Power Plant, Narimanam Natural Gas Plants, Kalpakkam Nuclear Power Plant, Ennore Thermal Plant, The Neyveli Lignite Power Plant which are the major suppliers of the state's electricity. Thus these power plants facilitate the business and economy of Tamil Nadu in a big way. Besides wind power also accounts for 20 percent of the power requirements of the state.

Another industry which is gaining ground in the state is the electronics industry and many giants like Nokia, Flextronics, Sony Ericsson, Motorola, Samsung, Dell, etc. have set up shops in Chennai. There are many heavy industries also in Tamil Nadu, and BHEL, which has the distinction to be the largest engineering and manufacturing enterprise in India in the energy and infrastructure domain, has its manufacturing plants here. SAIL has a steel plant in Salem, Tamil Nadu.

Tamil Nadu is fast gaining popularity as the popular destination for IT companies and many giants like Infosys, Wipro, TCS, Satyam , Cognizant, etc. have also set up their offices here.

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