Nagaland Economy is mainly based on agriculture as more than 60% of the population is engaged in this sector. The Economy of Nagaland is also dependent on forestry, cottage industry, and tourism. The gross domestic product of the state Nagaland amounted to Rs. 6,500 million in 1990, in 1995 this figure amounted to Rs. 18,140 million, and in 2000 this figure stood at Rs. 36, 790 million.
The Economy in the state of Nagaland is dependent mainly on agriculture. The economy's remarkable feature is that there are no landless peasants in the state. The various kinds of crops cultivated in Nagaland are corn, pulses, oilseeds, fibers, sugarcane, potatoes, tobacco, millets, and rice. In spite of agriculture being the main occupation of the people, the state still has to import food items from other states. This has happened due to the fact that people followed unsustainable agricultural practices such as the Jhumming method which has led to the loss of fertility due to soil erosion. This has hampered the growth of the Economy in Nagaland.
The Economy of the state of Nagaland also depends on the forests as the state has a huge forest cover. The state has 33% forest area and they are divided into 3 group such as private forests, reserved forests, and protected forests. The various products from the forests are sold all over the country and this brings in revenue for the Economy of Nagaland. Nagaland Economy also gets its revenue from the state's cottage industries. The cottage industry in Nagaland manufactures pottery, weaving materials, and woodwork. All the products that are manufactured by the cottage industry are sold all over India and even exported to foreign countries. This has given a major boost to Nagaland Economy.
The Economy in the state of Nagaland depends on tourism to a certain extend only due to the fact that tourism is limited in the state due to its geographical isolation. Also the political instability in Nagaland has further hampered the growth of tourism in state leading to the slow down of the Economy of Nagaland.
Nagaland Economy has grown but not at the rate that has been expected. The main reasons for this slow growth has been that the state has a hilly terrain which makes it difficult for the people to communicate. The lack of eduction among the people and also the unstable political condition has hampered the growth of the Economy in Nagaland. The state government is making an attempt to boost the economy by developing the infrastructure and also by setting up new industries.
Nagaland Economy has grown over the years but not at the rate that has been expected. But now with the state government making efforts, the Economy of Nagaland is bound to rise in the near future.