The economy of Andhra Pradesh is mainly driven by agriculture. Two important rivers of India, the Godavari and Krishna, flow through the state, providing irrigation. Rice, sugarcane, cotton, mirchi (chilli pepper), mango and tobacco are the local crops. Recently, crops used for vegetable oil production such as sunflower and peanuts have gained favour. There are many multi-state irrigation projects in development, including Godavari River Basin Irrigation Projects and Nagarjuna Sagar Dam, the world's highest masonry dam.
The state has also started to focus on the fields of information technology and biotechnology. In 2004–2005, Andhra Pradesh was at the Forth position behind Maharastra, Karnataka, and Tamil Nadu, in the list of top IT exporting states of India. The IT exports from the State were 1,800 million in 2004. The IT sector is expanding at a rate of 52.3% every year. The IT exports reached 19,000 million in 2006–2007 and ranked fourth in India. The service sector of the state already accounts for 43% of the GSDP and employs 20% of the work force.
Andhra Pradesh, India is a mineral rich state, ranking second in India in terms of mineral wealth. The state has about one third of India's limestone reserves, estimated at about 30 billion tonnes.
The state ranks first nationwide in hydro electricity generation with national market share of over 11%. The offshore Krishna-Godavari basin gas reserves of 60 Trillion cubic feet provide a third of the nation's gas needs.
Andhra Pradesh's gross state domestic product for 2009 was estimated at $62 billion in current prices. This is a chart of trend of gross state domestic product of Andhra Pradesh at market prices estimated by Ministry of Statistics and Programme Implementation with figures in millions of Indian Rupees. Accordingly, the state ranks fourth in terms of overall gross state domestic product and fourth in per capita gross state domestic product among the major states of India.
| Year | State GDP (Rs. MM) | In Constant Dollars ($ Billion) | Growth Rates in Constant Dollars |
|---|---|---|---|
| 1980 | 81,910 | $10.2 | - |
| 1985 | 152,660 | $15.2 | 50% |
| 1990 | 333,360 | $25.64 | 67% |
| 1995 | 798,540 | $124.2 | -4% |
| 2000 | 1,401,190 | $33.2 | 37.5% |
| 2007 | 2,294,610 | $48.2 | 45.5%(7 yr) |
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