The present study was undertaken in order to estimate the economics of production and marketing of important high-value crops; to ascertain the Domestic Resource Cost (DRC) and to highlight the problems faced by the producers in production and marketing of these high-value crops. The study was conducted in the Punjab state focusing on two most important fruit crops namely kinnow and guava and six vegetables such as peas, potato, onion, cauliflower, tomato and chillies. Amongst different vegetables, the net returns were as low as Rs 24,172 per ha for potato and as high as Rs 2,92,204 per ha for tomato. In case of fruit crops, the net returns from kinnow turned positive only after four years when the fruit trees started full bearing and the product started to be brought to the markets. The DRC analysis reveals a fall in profitability in fruits and vegetable cultivation with the withdrawal of subsidies. The ratios of protection and efficiency (NPC, EPC and DRC) of different vegetables and fruits showed the presence of input subsidies, taxes and trade restrictions but Punjab had a comparative advantage in producing these commodities. Wholesaler was the major marketing agency in case of vegetables and guava, with more than 60 per cent of the produce being marketed through them while Pre-harvest contractors were dominating in kinnow. Producer-consumer channel was observed to be the most efficient channel and the producer’s share in consumer’s rupee decreased with the increase in number of market intermediaries involved. Lack of scientific and technical skills, weak extension efforts by the public and private agencies and the prevalence of poor quality seeds/seedlings were perceived as major production problems. Lack of market information, frequent and large fluctuations in prices, congestion in the wholesale markets and lack of cheaper grading and packing facilities to the farmers were the major marketing problems faced by the growers of high value crops. The study highlighted the need for the provision for adequate short-term credit facilities to high value crop growers, avoidance from purchasing large machines by the small and marginal farmers, the strict vigilance on the poor quality of seeds/seedlings and pesticides being supplied by the dealers, sale of good quality seeds and pesticide through cooperative societies, introduction of crop insurance scheme, formulation of effective price policy for these crops, and to establish processing units, cold storages and dry freezing plants in the areas where horticultural crops are grown, which can help the farmers in getting remunerative returns for the produce.