Bangalore's Rs. 22,000 crore economy (Net District Income) makes it a major economic centre in India. Indeed, Bangalore is India's fourth largest and fastest growing market. Bangalore's per capita income of Rs. 2.9 lakh (US$ 6,460) is the highest for any Indian city.

As of 2001 Bangalore's share of Rs. 1660 crore (US$ 3.7 billion) in Foreign Direct Investment was the 3rd highest for an Indian city. In the 1940s industrial visionaries such as Sir Mirza Ismail and Sir Mokshagundam Visvesvaraya played an important role in the development of Bangalore's strong manufacturing and industrial base.

Bangalore is headquarters to several public manufacturing heavy industries such as Hindustan Aeronautics Limited (HAL), National Aerospace Laboratories (NAL), Bharat Heavy Electricals Limited (BHEL), Bharat Earth Movers Limited (BEML) and Hindustan Machine Tools (HMT). In June 1972 the Indian Space Research Organisation (ISRO) was established under the Department of Space and headquartered in the city.

Bangalore is called the Silicon Valley of India because of the large number of Information Technology companies located in the city which contribute 38% of India's Rs. 100,000 crore (US$ 22 billion) IT and software export market. Bangalore's IT industry is divided into three main "clusters" — Software Technology Parks of India, Bangalore (STPI); International Technology Park Ltd. (ITPL); and Electronics City.

Infosys and Wipro, India's 2nd and 3rd largest software companies, have largest campus in Electronics City. As headquarters to 38% of global SEI-CMM Level 5 Companies, Bangalore's place in the global IT map is prominent. The growth of Information Technology has presented the city with unique challenges. Ideological clashes between the city's IT moguls, who demand an addressal of the infrastructural problems of the city, and the traditionally bureaucratic state governments, whose electoral base is primarily rural Karnataka's agricultural workers, are aplenty.

In July 2004 Wipro CEO Azim Premji threatened to pull his company out of the city, stating, "We do not see the situation (state of Bangalore's infrastructure) improving in the near future". The Hosur Road, which connects Bangalore to the Electronics City, is a heavily congested road in the city. The road is also part of the National Highway (NH7) and therefore witnesses heavy truck traffic as well. Biotechnology is a rapidly expanding field in the city. Bangalore accounts for 47% or 127 of the approximately 265 biotechnology companies in India. Biocon, headquartered in Bangalore, is the nation's leading biotechnology company and ranks 16th in the world in revenues. The Bangalore Stock Exchange is the largest in South India.