Kullu's economy is highly dependent on a triad of sectors: tourism, agriculture (specifically horticulture), and traditional handlooms.
Historically an agrarian economy, Kullu transformed dramatically with the introduction of apple cultivation in the mid-20th century. Today, the town serves as a commercial hub for farmers selling their produce and for tourists transitioning to higher-altitude destinations. The cost of living is moderate by Indian standards, though real estate is expensive due to the limited availability of flat land and stringent state laws regarding land ownership by non-residents. Economic growth is stable, driven by steady domestic tourism and the ever-growing demand for Kullu apples across India.