The economy of Butwal town is mainly centered around education, trade and transportation. Butwal has always been a major trading centre for the hill people from nearby villages, as is evident from the establishment of Batauli Bazar in the foot of the hills in old Butwal. The main trading centre of Butwal is near Traffic Chowk. Shops selling Chinese and Indian items are in vogue. Butwal also boasts of number of small and medium scale industries specializing in woodwork, Ironsheet, Metalware and Aluminium sheet etc.
There are other small industry also.There are many Rice maills also..some of them are Siddababa Rice Mill, Sita rice mill, etc. People of butwal and people of next cities like Narayanghat,Pokhara, Kathmandu buy the products of these small industry.
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