Arunachal Pradesh

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Industrial Development & Economic Growth in Arunachal Pradesh

July, 2019

Arunachal Pradesh is the largest among the seven states located in the Northeast of India. Currently the state's economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, pulses, sugarcane, ginger, oilseeds, cereals, potato, and pineapple. The state has considerable mineral reserves that offer huge potential. The state’s hydropower generation potential is estimated at 50,328 Megawatt (MW). As of May 2019, the installed hydropower generation capacity of the state was 116.55 MW.

The state’s diverse topography offers ample of opportunities for non-timber based industries such as bamboo, cane and medicinal plants. Horticulture has a vast potential, owing to good agro-climatic conditions and topography, for the development of varied varieties of fruits and vegetables.

Between 2011-12 and 2017-18, the Gross State Domestic Product (GSDP) increased at a Compound Annual Growth Rate (CAGR) of 14.06 per cent to Rs 243.53 billion (US$ 3.78 billion) whereas the per capita GSDP increased at a CAGR of 11.79 per cent to Rs 154,229 (US$ 2,393).

The resources, policy incentives and climate in the state support investments in mining and mineral products (including cement), tissue culture and floriculture, plantation crops (tea, rubber, etc.) and agro-based industries.

The state’s location provides opportunities for international trade with South Asian countries such as Myanmar, Bhutan and China. Textiles and handicrafts from the state are in demand in neighbouring countries.

The central government approved North East Industrial Development Scheme 2017, to promote industrialisation in the states in the North Eastern Region and to improve productivity in government departments through computerisation.

The Department of Industries has set up District Industries Centres (DICs) and Sub-District Industries Centres (Sub-DICs) for the industrial development of small scale, tiny and village industries.

Major initiatives taken by the government to promote Arunachal Pradesh as an investment destination are:

  • As of November 2018, the Government of Arunachal Pradesh signed memorandum of understandings (MoUs) with 17 private companies of worth Rs 1,200 crore (US$ 170.99 million) during the 5th edition of North East Connectivity Scheme.
  • The State Industrial Policy, 2008, of Arunachal Pradesh lists mineral-based industries (such as ferro-alloys, cement plants, etc.) as thrust sectors. Arunachal State Mineral Policy, 2014 has been prepared on the basis of the objectives of the National Mineral Policy, 2008. Arunachal Mineral Development Fund shall be created in accordance with this policy for its utilisation towards mineral exploration and development of mining activities in the state.
  • A Greenfield airport in Hollongi was announced in October 2018 to provide aviation services to state’s capital Itanagar.
  • As of February 2019, 43 Gram Panchayats (GPs) have been made service ready under the Bharat Net Programme.
  • The government has invited domestic power companies in the region to develop hydropower plants.

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