The economy of Andaman and Nicobar islands consists of agriculture, trade, commerce,fishing and industry. Currently small quantity of paddy, sugarcane, banana, sweet potato, papaya, rabi pulse and vegetables are cultivated. But they are not sufficient for people so most of them are imported from main land india. The main Andaman cash crops are cashew nut, coconut, areca nut . Coconut and areca nut are actively cultivated in Andaman and Nicobar Islands. The cashew nut cultivation is not much popular in Andaman. Vegetables like tomato, potato, cabbage, onion, cauliflower, beans, carrot, green chillies ,red chillies etc., are brought from the mainland. Tamilians and Punjabis are main traders in the andaman islands.
Andman traders purchase things from the mainland only. However, the inter-Islands traders purchase goods from the Port Blair's traders only. Wholesale and retail trades and "Govt. Order Supply" is main form of trade. Improvements in transportation and in imports has simulated the growth of tertiary sectors,trade and commerce has grown remarkebly over the year. The growth of small traders and enterpreneur has direct dependency on growth of shipping. Most of the industries are found in Andaman and Nicobar Islands. But majority of the industrial units are based on wood and their by-products. They satisfy the tourists with their handicrafts and also used for building houses.Wodd based industries prpduce following items a)Commercial plywood,Resawn hewn timber,Timeber splints for matches,Scantlings,pencil slats,Timeber veneers. Other industries are based on agro, food, marine, coir, mineral, chemical, engineering, leather, textile etc also contribute significantly to the economy of andaman.
A department in the primary sector with a small budget but high growth potentail is Fisheries. The constrain is not about fish availabilty but about the indifference shown by people settled in the Andaman Island about sea venture. Andaman has a coatline of 1962 km long and sea a stone throe away from every village,the normal expectation is fishing industry will bloom. But the settlers continues to prefer agriculture over fishing.
Animal husbandary is also at its nacent stage.The main livestocks are Cattle,Buffaloes,Goats,Pigs. Lack of irrigation faclities is also one of major area of concern in andaman islands. The root cause lies not in the quantity of rainfall but in its velocity and the terarin in which it falls. Major portion of the cash inflow is from the budget allocations by the central Government. The Status of the economy is not even developing but is at its infant stage with the full scope of growth and development. Tourism and Industry are the possible sectors in this territory which can develop the economy of the Andaman and Nicobar Islands.