The economy of Zunheboto is primarily agrarian and service-oriented. Within the town, government employment is the largest formal sector, providing stability and driving local consumption. A bustling retail sector, including daily markets, clothing stores, and grocers, serves both the townspeople and villagers from the surrounding district.
Remittances from family members working in larger Indian cities or abroad also contribute significantly to the local economy. While large-scale industry is non-existent due to geographical constraints and infrastructure deficits, small-scale enterprises—particularly in handlooms, handicrafts, and agro-based products—are vital to household incomes. Future economic development is largely focused on improving agriculture, eco-tourism, and leveraging the town's educational institutions.