Arunachal Pradesh is located in the Northeast of India. It shares its borders 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).
It has 12 industrial estates located in different districts and spread over a total area of 51.8 hectare. These industrial estates have been developed in land-areas ranging from 4,540 to 202,342.8 square metre, with the primary objective of growth and development of small scale industries. To support industrial growth, the State Government has also notified integrated infrastructure development centres, industrial growth centres and industrial areas. Additionally, the state has sector-specific policies for industries related to power and agriculture.
The gross state domestic product (GSDP) of Arunachal Pradesh grew at a compound annual growth rate (CAGR) of 14 per cent between 2004-05 and 2011-12. At current prices, the state's GSDP was US$ 1.95 billion in 2011-12. According to the Department of Industrial Policy and Promotion (DIPP), the cumulative foreign direct investments (FDI) inflows from April 2000 to December 2012 amounted to US$ 78 million.