Sagara has a relatively high number of Gudigars – families that for generations have been engaged in sandalwood and ivory carving. The Gudigar men make idols, figurines and knickknacks like penholders, agarbathi stands, cuff links, photo frames and paper clips; the women are adept at making garlands and wreaths out of thin layers of scraped sandalwood.
The economy of Sagara is mainly driven by areca nut (betel nut), paddy, spice and forest products trade. Betel nut is the major cash crop grown in the area. Along with areca nut, spices like pepper, clove, cinnamon, nutmeg, and cocoa are grown. The economy of the city is highly volatile and is dependent on the variation in the pricing of these agriculture products. Sagara APMC is one of the main market for areca nut in Karnataka.