A clipping path is a shape that separates the transparent portion of an image from the part that is not transparent. Think of it as a crop that does not have to be rectangular. In the image below, the star is a clipping path for the blue and green path that was underneath.

What is Clipping Path?
Clipping path is the process of cutting out the original background of an image and inserting it into a new image or background. All the objects inside the path will be present after the clipping path is applied and others outside the path will be expunged from the output. Clipping path results in hard but fine edges. Basically, clipping path is a vector masking technique used to hide the background of an image or may be used to morph an image into any shapes, making the masked portions transparent or to any background color.

Why Clipping Path?
Clipping path is the nuts and bolts of all other image editing methods. It becomes handy whether it is to knockout the background, make it transparent or apply Photoshop masking. Its usage is astronomically increasing for its cutting age applications. To hide the unnecessary parts as well as correcting the color we use it as well. Clipping path is applicable both in 2D & 3D graphics. In compound images/photos clipping path is usually used for color correction.

How Clipping Path is done?
Clipping Path never becomes a part of the original image and does not change any pixel in the original image. It creates a mask around the intended portion of original photo and cuts it out to another background or makes the unwanted pixels transparent.

Adobe Photoshop, Illustrator, Fireworks, CorelDraw etc. are popular software to create Path for any images. But mostly used software is Adobe Photoshop. In Photoshop there are a number of tools to perform Clipping Path, like: Pen tool, Extract filter, Alpha channel using the Magic Wand, Lasso tool, Quick Mask, etc. Photoshop Pen Tool is the ultimate instrument for clipping path in the image manipulation industry. No other tools can provide the crispy outlook of clip images other than pen tool. It is a form of manual clipping path and totally hand drawn.