The department is formed in the background of the growing importance of Economics as a discipline over the years and its emphasis on rigorous quantitative and analytical reasoning. The department's objective is to be attune with the latest developments in the field, produce high-quality research, and well-trained students. Cutting edge research conducted in the department will also help enhance policy making for government and government bodies, and provide consultancy in strategic decision-making for businesses. The Economics faculty used to be housed earlier at the Department of Humanities and Social Sciences (HSS) within the institute. It is on 16th January, 2023 that the new Economics Department was carved out of the HSS Department.

The new department will significantly increase interest from prospective faculty members and PhD scholars. It will also give focussed identity to faculties and students while applying for research grants, internships, exchange programs, and graduate studies. IITB’s global presence in the area of Economics will be enhanced by the identity offered by this new department.

The economics group already launched a four-year BS (economics) program in 2017 that has been very successful and has attracted top IIT Joint Entrance Exam (JEE) rankers. In addition, the department also offers a Minor program in economics, and plans to offer an Inter-Disciplinary Dual Degree Program (IDDDP) for the undergraduate students. An MS degree in economics will also be introduced in near future.

The Economics Department is committed to creating a welcoming and supportive culture in which all students, faculty, and staff feel the belongingness and are able to grow together.