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Sri Muktsar Sahib is a city and district headquarters for the district of Sri Muktsar Sahib, located in Punjab, India. The 2011 Census of India put the total population of Sri Muktsar Sahib municipality to 117,085, making it the 14th largest city of Punjab, in terms of population. Historically known as Khidrana or Khidrane di dhab, the city was made the district headquarters in 1995.

Chronological evidence indicates that the city was named Muktsar after the battle of Muktsar in 1705. Guru Angad Dev Ji was also born here. The government officially changed the name of the city to Sri Muktsar Sahib in 2012, though the city is still primarily referred to by its unofficial name – Muktsar.

After India gained independence from the British in August 1947, there was an aggressive exodus of the non-Muslims from West Punjab and that of Muslims from the East Punjab. A large number of refugees from the Bahawalpur state and from Montgomery and Lahore districts entered India through the border along the Firozpur district, of which Muktsar was a part of. According to the 1951 Census, 349,767 refugees from Pakistan settled in the Firozpur district including the erstwhile Muktsar and Muktsar tehsils.

The Muktsar city remained a tehsil of Ferozepur district from August 1947 to August 1972, and then it became a teshil of the newly carved out district, Faridkot. In November 1995, Muktsar became a district city. In February 2012, the city was officially renamed Sri Muktsar Sahib.

The city is virtually non-industrialized, lacking any significant industrial unit or factory. Before independence, Muktsar only had a few units producing small hand-held agricultural tools. Today, the only large scale industry near the city is Satia Paper Mills Limited,[17] which is located about 7 km from the city center in Rupana village. The city has well-defined trade unions for most of the professions. The paper & card board workers union was officially registered in Muktsar in February 1986, the plumber union and also the cycle rickshaw puller union in September 1996 and mistri mazdoor (general manual labor) union in June 1998.

Muktsar does not have any shopping mall and the retail industry is largely unorganized. Though three major retail chains have opened stores in Muktsar – Easyday, Vishal Mega Mart and Aadhar, the local population typically buys FMCG goods, groceries, fresh produce like vegetables, eggs, milk and meat from small unorganized retail vendors, including small shops and unlicensed mobile vendors, rather than from organized retail stores.