Like most of the tribals the world over, Nagas are forest people, Hence their economy is forest-based; indeed, tribal economy can be appropriately called forest economy. The Naga developed an economy in which subsistence agriculture is combined with extraction of forest produce. Nagas clear forest for cultivation of rice and other crops; they hunt, fish, collect mushrooms, roots, fruits, herbs, etc. from forests. In addition to shifting cultivation (Jhumming), several Naga tribes such as the Angamis, Tangkhuls, Maos, Chakhesangs developed terraced rice paddies long before British and the missionaries arrived in the 1830s. According to Dr. B D Sharma, "The tribal economy is simple, non-structured and self-contained. The community draws its sustenance from the natural environment. The structure of local economy depends on the natural resourse availability, pressure of population and the level for individual skills." In addition to land forest, there is industry in every Naga tribe: blacksmithy, pottery, weaving (clothes and baskets), carving (wood and stone), etc.

In Naga society the land is owned by the village chief or the village community or the clan. However, once individual plots of land are allotted to the villagers, the individuals have the exclusive rights over their allotted plots of land; they can keep or sell as they wish. But no villager has the right to sell his plot of land to anyone outside the village; each plot must remain in the village for posterity.