Arunachal Pradesh is located in the Northeast of India. It shares its border with the neighbouring countries of Bhutan in the West, China (Tibet) in the North and Northeast, Myanmar in the East and Southeast and the Indian states of Assam and Nagaland in the South. The geographic location of the state provides immense opportunities for international trade with the South Asian countries through its shared borders with Myanmar, Bhutan and China.
Undulating topography and varied agro-climatic conditions offer vast potential for horticulture and growing a variety of fruits, vegetables, spices, aromatic and medicinal plants, flowers and mushroom. In addition, the State also offers some exquisite tourist destinations such as Parasuram Kund (Lohit), the Namdapha National Park (Changlang), the Ita Fort and Jawaharlal Nehru Museum (Itanagar), the Tawang Monastery (Tezpur) and the Sela Lake (Bomdila).
The state has 12 industrial estates, established across districts. To support industrial growth, the State Government has also notified integrated infrastructure development centres, industrial growth centres and industrial areas. The state also offers a wide range of fiscal and policy incentives and assistance for businesses under the State Industrial Policy, 2008. Additionally, the state has sector-specific policies for industries related to power and agriculture.
The GSDP of the state grew at a compound annual growth rate (CAGR) of 14 per cent between 2004-05 and 2011-12. According to the Department of Industrial Policy and Promotion (DIPP), FDI inflows amounted to US$ 73 million from April 2000 to January 2012, which includes FDI inflows for Reserve Bank of India's (RBI's) Guwahati region, comprising of Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.