This town is the midpoint between Chennai and Coimbatore (approximately 247 km each way) and between Salem and Villupuram (approx 85 km from either point). The town is well connected by buses from Villupuram, Salem, Erode, Coimbatore, Chennai and the northern region of Kerala.

The economy of Chinnasalem is primarily agricultural, including cultivation of Rice, Tapioca, Cotton, Vegetables, Dairy Farming, and Turmeric. Chinnasalem's weekly market serves the surrounding village areas.

Chinnasalem is the supplier of rice to south India. Because, Chinnasalem having nearly 75 modern rice mills and the surrounding areas. It is the first town in Tamil Nadu and south India, which is having more than 30 rice mills within town limit and they are a major source of employment locally. Chinnasalem rice producers won "Gem of India" award, honored by Government of India for the quality rice production.

There are also some sago factories that produce Sago from tapioca.In and around of chinnasalem having rice bran oil mills that produce oils like ground nut oils which is mostly use by Japanese. Chinnasalem is also known for their wood crafts. These industries export to other parts of Tamil Nadu and internationally.

In Tamil Nadu, in this town and surrounding areas having more than 1000 no of Paddy harvesters. These peoples are going all over Tamil Nadu, southern Andhara and southern Karnataka for paddy harvesting.