Economy of Varansi

Varanasi’s economy is primarily dominated by tourism. The city known for its sacred connection attracts Hindu, Buddhist and Jain pilgrims, whereas, to experience the true colours and emotion of India, expats from various parts of the country drop in to have a peek of this vibrant city. Let’s take a look at all the factors contributing to the city’s economic growth.

Approximately 3 million from within the country and over 200,000 foreigners visit the city, increasing the revenue of Varanasi to a large extent. Hospitality and hotel industry is buzzing in the city and most of these business enterprises run in profits all year round. However, a not-so-developed tourist infrastructure in the city is also a factor for the limited earning of revenue through tourism.


Despite its religious and tourist connections, this small city situated in the eastern regions of Uttar Pradesh remains low on its economic front. There are a number of small enterprises in Varanasi and almost 29 percent of the population in Varanasi are employed. Most of these employed people work for manufacturing, trade, transport, construction and other services. About 4 percent of the population works in agricultural sector.

Silk weaving is another important sector for earning revenue. Varanasi’s silk is famous all over the world and earns handsome revenue through its silk sarees, scarves and other silk apparels. Most of these silk products are even exported to various corners of the world, thus, adding up to the sacred city’s economy. Varanasi’s silk scarves and silk jackets loaded with intricate embroidery and details are a favourite of many western fashionistas. Other products that catches the eyes of the tourists are brass wares, jewellery, carpet, wall hangings, lamp shades and replicas of Hindu and Buddhist deities.


Other leading manufacturing industries in Varanasi are Diesel Locomotive Works and Bharat Heavy Electricals Limited. A large number of workers hailing from Varanasi are emmployed in these two industries, thereby, balancing the economic growth of Varanasi. Another three interesting industries whose contribution to the financial sector of Varanasi cannot be ignored are dairy product, mangoes especially the langra variety and betel leaves. Varanasi paan is equally impressive as its silk and is rage worldwide.

The new and modern section of Varanasi houses a number of malls like PDR mall, IP Mall, IP Vijaya, JHV Mall that also acts as a good source for augmenting Varanasi’s economy.

According to a study made by Jawaharlal Nehru National Urban Renewal Mission, city’s economy has not progressed in relation to its neighbouring cities and other industrial areas. Even today, cottage industry and various small-scale enterprises dominate economy of the city instead of large-scale industries. Cottage industries hold an employment record of 29 per cent with just 11 per cent in big industries. The main reason for the downfall, as the report suggests, is declining share of property and land for industrial development in the region. Land shares for industrial growth has declined over the year from 6.77 per cent to 4.52per cent.

Though weaving remains an important base for economic growth, weavers in Varanasi still remains one of the financially weaker sections of the society.