The state has adopted an industrialization program since the 1970s. Lack of raw materials, financial resources, and power, as well as poor transport and communications, all hindered industrial growth. Dimapur, the state's leading industrial centre, now has a sugar mill and distillery, a brick factory, and a television assembly plant. Chromium, nickel, cobalt, iron ore, and limestone are found in Nagaland, but only low-grade coal deposits are mined at present. Boreholes drilled in the western district of Wokha have yielded oil, and seepages in the Dikhu valley, near Assam, suggest the presence of exploitable oil reserves.
Power generation depends mainly on diesel plants, though hydroelectric output has increased.
More than 50 percent of Nagaland's power is generated in Assam. Nagaland depends mostly on roads for transportation. A national highway runs from Dimapur to Kohima and then on to Imphal in Manipur. Another main road links Mokokchung with Amguri in Assam. A short stretch of the Northeast Frontier Railway passing through Dimapur from Assam is the only rail link with the rest of India.