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 August 2018, the installed hydropower generation capacity of the state was 118 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 and Investment Promotion Policy’ (NEIIPP), 2007 provides several incentives - incentive on business expansion, 100 per cent excise duty and income tax exemption, capital investment subsidy, interest subsidy and insurance premium reimbursement.
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: