Punjab, called the "Granary of India", is bounded on the west by Pakistan, on the north by Jammu and Kashmir, on the northeast by Himachal Pradesh and on the south by Haryana and Rajasthan. The state has one of the highest road densities amongst Indian states at 133 km per 100 sq. km. It is well connected to all major markets with 72,212 km of the total road network, 2,830 km of rail track network and 5 airports. It has a total installed capacity of over 13,400 MW. Punjab ranks second in logistics ease in the country. It also offers a strong logistics backbone with five container freight stations (CFSs) and four inland container depots (ICDs); thereby easing exports and imports for the state.

The state has a total cultivable area of 4.2 mn ha, which constitutes 3% of the net area sown in India. With this area, Punjab produces 18% of wheat, 12% of rice, 10% of milk, 20% of honey, 48% of mushroom and 5% of cotton in the country. In terms of wheat production, it generates the third largest marketable surplus after Canada and Australia; while in case of rice, its market surplus is second only to Thailand.

Major industries in Punjab include food processing, tractors and auto components, agro-based parts, bicycle and bicycle parts, sports goods, light engineering goods, metal and alloys, chemical products and textiles. The state has also emerged as a key hub for textile-based industries, including yarn, readymade garments and hosiery. The clusters around food and dairy products are the other major sectors of the state.