Some of the most productive arable lands in the western Himalayas are in the Kashmir valley. The majority of the population pursues subsistence agriculture in the main valleys on terraced slopes. The chief crops are rice, maize, wheat, barley, pulses, oilseeds and tobacco. Kashmir valley is famous for its large orchards producing apples, pears, peaches, mulberries, walnuts and almonds. This area is also the sole producer of saffron in the Indian subcontinent. Kashmir, with its forest cover is well known for its timber products.

Sericulture is practiced here and Kashmiri silk has long been popular A pastoral economy, sheep and goat farming, as well as cattle breeding and yak rearing have been practiced for ages. The Kashmir goat, provides pashmina, from which special pashmina shawls are made, for which Kashmir is well known. Traditionally, Kashmir was always famous for its handicrafts industries, which included weaving of local silk and wool, carpet and rug weaving, wood-carving, and papier-mâché. Precision instruments, metal ware, sporting goods, furniture, matches, resin and turpentine are the major industrial products. Tourism was one of the oldest and most successful industries here. Unfortunately, development has been suffocated by terrorism, and it is only recently that Kashmir valley is seeing a trickle of tourists again. This region has some mineral and fossil-fuel resources, mainly in Jammu. Small reserves of natural gas are found near Jammu. In Udhampur district there are bauxite and gypsum deposits. Other minerals include limestone, coal, zinc, and copper. Sapphires are found in the Zanskar mountains of Ladakh, alluvial gold has been found in the Indus River.