India is predominantly an agricultural country and the same applies to Tamil Nadu as well. Agriculture is the primary occupation of about seventy percent of the rural population of Tamil Nadu. Around 34% of the state's population resides in urban areas while the remaining population resides in the rural areas. With change in science and technology, agricultural practices have undergone radical improvement since independence. The change is visible not only in agricultural practices but also in the type of crop grown. In the recent few years secondary and tertiary sectors have also grown in great proportion, thanks to the New Economic Policy of the Indian government.

The main food crops that are grown in Tamilnadu are Rice, pulses and oil seeds while the important commercial crops of the state include sugarcane, tea, rubber, cotton, cashew and coconut. Multiple cropping, use of new and better varieties of rice, sugar, cotton, and millet coupled with the use of chemical fertilizers have tremendously increased the agricultural output of the state. Tamil Nadu has a 1000 km long coastline with equatorial climate, permitting year round fishery and farming. Fishing is also an important economic activity in Tamil Nadu. Opportunities in shrimp farming and processing, Crab culture, Seaweed culture, etc. are on the upswing in the state.

At present, Tamil Nadu is one of the most industrialized states in India. Many factors have combined together to make Tamil Nadu a leading industrial state. The state has a well-developed network of roads, rail, air and major ports at Chennai and Tuticorin. Cotton ginning, spinning and weaving are the traditional industries of Tamil Nadu. Other important and heavy industries of the state are automobiles, diesel engines, motorcycles, sugar, fertilizers, cement, agricultural implements, iron and steel, chemicals, transformers and paper. Everything from railway coaches, automobiles, tractors, battle-tanks, motorbikes and heavy vehicles are manufactured in Tamil Nadu. The rail coach factory at Perambur is one of the largest in Asia while the heavy vehicles factory, which produces tanks, is located at Avadi. The Chennai seaport is one of the most important ports in India. Tamil Nadu is rich in metals and minerals like limestone, gypsum, bauxite, salt, Mica, quartz, magnetite, lignite and iron ore.

Many heavy engineering and manufacturing-based industries are located in and around Chennai, which is nicknamed as the "The Detroit of Asia". Global auto giants like Hyundai, Ford, BMW, Caterpillar and Mitsubishi as well as domestic heavyweights like MRF, Ashok Leyland, TI cycles of India, Mahindra & Mahindra, Royal Enfield, TVS and TAFE Tractors have their manufacturing units around Chennai.

The traditional handicrafts industry also flourishes in Tamil Nadu. Notable among them are handloom silk, leatherwork, metal icons, kalamkari (hand-painted fabric, using natural dyes), brass, copper wares, bronze, palm leaf, carved wood and cane articles. Tamil Nadu is an important exporter of coffee, spices, yarn, tea, tobacco, handicrafts, engineering goods and granite.