The economy of Daporijo is primarily agrarian, transitioning slowly with the growth of the tertiary sector. Government administration, public services, and education are the largest formal employers in the town. For the broader district population, agriculture remains the backbone of the local economy, supported by small-scale trade and retail businesses centered in Daporijo's main market.
In recent years, there has been a push to develop eco-tourism and cultural tourism, given the region's breathtaking landscapes and rich tribal heritage. However, economic growth is often constrained by the challenging terrain, high transportation costs, and periodic infrastructural bottlenecks caused by harsh monsoons. Despite these challenges, there is steady investment in infrastructure and horticulture, pointing toward future economic diversification.