Economy of Sikkim

The economy of Sikkim, a state in northeastern India, has a significantly agricultural economy. Although having mountainous terrain, Sikkim has managed to sustain its agricultural economy through organic farming. The state of Sikkim was declared as the only 100 per cent organic state in 2016.^[4] Sikkim's industrial sector is also mostly agriculture based. Besides agriculture, other large industries include pharmaceuticals,^[5] ecotourism,^[6] and carpet weaving.^[7]

Economy of Sikkim

Terrace farming in Sikkim
Statistics
GDP	₹0.57 lakh crore (US$6.7 billion) (2025-26 est.)[1] $28.2 billion (ppp, 2025-26 est.)[2]
GDP rank	23rd
GDP per capita	₹857,560 (US$10,000) (2025-26 est.) $42,310 (ppp, 2025-26 est.) [3]
GDP per capita rank	3rd
Human Development Index	0.795 (2023) 3rd
All values, unless otherwise stated, are in US dollars.

Economy

In 2016, Sikkim became the world's first organic state, implementing 100% organic policy.^[8] A majority of Sikkim's population is employed in agriculture, forestry, and fishing,^[9] with 80% of the rural population employed in this sector.^[10]

In 2003, Sikkim implemented 100% Organic farming and banned chemical fertilizers and pesticides, becoming the first Indian state to do so.^[11] In January 2016, Sikkim was awarded with the Future Policy Gold Award by UN Food and Agriculture Organisation (FAO).^[12][13][14]

Sikkim is the major producer of Black cardamom in India, accounting for 88% of all cardamom produced in the country.^[15] Other major crops of the state include paddy, buckwheat, maize, barley, tea, and potatoes.^[16] Sikkim is known for its unique Temi Tea, something which the Tea Board of India is considering for a geographical indication tag.^[17]

2. Tourism: Tourism remains a pillar of Sikkim's economy. Adventure tourism, ecotourism, and cultural tourism have drawn both domestic and international visitors. In 2023-24, the state focuses on sustainable tourism to preserve its fragile ecology, while promoting its serene landscapes, Buddhist monasteries, and trekking routes.

3. Hydropower: Sikkim has abundant water resources, and hydropower projects continue to drive its economy. With significant potential for power generation, the state sells surplus electricity to other regions in India. These projects generate revenue, employment, and infrastructure development.

4.Pharmaceuticals: The pharmaceutical sector has emerged as a key player in Sikkim’s industrial growth. Global companies, attracted by the state's investor-friendly policies and tax incentives, have set up plants in the region. This sector contributes substantially to state GDP and provides employment opportunities.

Challenges and Outlook: Despite its positive growth trajectory, Sikkim faces challenges, including environmental degradation, climate change impacts, and limited infrastructural connectivity. However, with ongoing efforts to improve connectivity through road, rail, and air networks, and a strong focus on sustainable development, Sikkim’s economy in 2023-24 looks promising.