Madurai's economy is chiefly agrarian. Textiles and tourism contribute significantly to the local economy. Madurai is famous for "Sungudi", a fine-count, zari-bordered, fabric painted cotton saree. However, in the past few years, overt dependence on monsoons, and international competition and cheaper imports have dented the performance of agriculture and textile sectors respectively.

Madurai has a thriving flower industry, Jasmine in particular. The cultivation of jasmine is done at the foothills of Kodaikanal near Madurai, with its red soil which retains water. The flowers are in good demand in other parts of India like Mumbai, Bangalore, Delhi, Kochi, Thiruvananthapuram, Kolkata and Hyderabad. They are also exported to Middle East and Singapore where they are mostly used in perfumes.