Capsicum (Capsicum annum L. var. grossum sendt) production is concentrated in northern districts of the State. The study was conducted to analyse the comparative economics of capsicum production under open and protected conditions. Cost of establishment of shade net structure was Rs. 2, 51,110 per unit (0.10 ha). The cost of cultivation of capsicum under open and protected conditions was Rs. 38,884/acre and Rs. 55,080/ unit, respectively. Variable cost accounted for higher proportion in open cultivation, whereas it was the fixed cost had higher proportion in the protected cultivation. Among the variable costs, the costs on plant protection chemicals and labourers were the highest under both the methods. Further, cost of production per quintal worked out to Rs. 1147 and Rs. 1001.50 in open and protected conditions, implying efficiency of the modern technology. Yield levels were 3.39 tonnes per acre in open and 5.50 tonnes per unit under protected conditions. Returns obtained were Rs. 73,982 per acre in open and Rs. 1, 54,734 per unit in protected cultivation. Returns per quintal worked out at Rs. 2182.36 and Rs. 2813.35 under open and protected conditions, respectively.