Ahmedgarh was founded by Nawab Ahmed Ali Khan of Malerkotla in 1905. It is an important agricultural market. Paddy and wheat are the main crops brought to this market. Being close to two industrial towns of Malerkotla and Ludhiana, a number of small-scale industries can be found here.

It is about 50 km north-west of Sangrur, 26 km south of Ludhiana and 98 km from Chandigarh. Ahmedgarh Railway Station is on the Ludhiana- Dhuri railway line. The nearest airport is Ludhiana Airport.