Industrial Scenario of Arunachal

Industrial Scenario of Arunachal Gifted with hilly terrain covered with thick tropical and alpine forests, perennial rivers and wild flora and fauna, Arunachal is yet to tap its natural resources to its full potential for economic growth.

Languishing in industrial and social backwardness, the people look upon both the state and central governments to lift them from their rudimentary lifestyle to get in sync with modern life like that of their counterparts in Assam and rest of India.

Facing the existential threat from China, which claims the entire state as South Tibet, the Centre has taken up on a fast track basis the development of road and other connectivity projects across the 19 districts whose remote towns and villages are yet to be discovered by the rest of the world.

Here are some of the prospects Arunachal offers in terms of win-win situation for all stakeholders in the industrial space:

  1. India's pent-up demand for electricity could be addressed by the state's potential of 60,000 MW hydropower capacity.
    Currently, several hydro power projects are allocated to privatesector players with capacity aggregating 41,702 MW.
  2. The 21 km Harmuti (Assam) to Naharlagun road route becameoperational in April 2014; this has connected the state to the rest of India and provided huge trade and transport opportunities.
  3. Arunachal is home to 601 species of orchids or 52 per cent of the species of orchids known in India, indicating a huge potential for attracting visitors especially foreign tourists.
  4. The state's textile industry, including carpet making, enjoysa huge appeal. The Arunachal carpets have received national and international fame for their creativity, design andquality.
  5. Arunachal with an area of 83,743 sq. km is the largest state in the Northeast of India.

Its diverse topography offers opportunities for non-timber based industries such as bamboo, cane and medicinal plants.

Huge untapped power potential

Power Generation in Arunachal Pradesh
  • Hydropower capacity:97.57 MW (2013-14); 100+ projects in the pipeline with a generation capacity of 47,000 MW.
  • The hilly terrain and abundant rivers make the state a potential powerhouse of the northeast.
  • The state's hydropower potential is currently estimated at 60,000 MW, or approximately 25 per cent of India's current power generating capacity.
  • The central government has allocated 35,000 MW of hydroelectric projects to developers in the state.

Gateway to Southeast Asia

Gateway to Southeast Asia
  • The state's location provides opportunities for international trade with Asian countries such as Myanmar, Bhutan and China.
  • Textiles and handicrafts from the state are in demand in neighbouring countries.
  • Recently, the state received approval for the first border trade along the Indo-Myanmar border.

Policy and fiscal incentives

  • The state and central governments offer huge fiscal and policy incentives for the development of important sectors.
  • The State Industrial Policy 2008 and Agriculture Policy 2001 support big push to economic activities.
  • The central government's North East Industrial and Investment Promotion Policy (NEIIPP) 2007 promotes investment.
  • Ministry of Power has offered assistance to Arunachal Pradesh for fast-tracking 13 projects with 13,600 MW of capacity.

Sectoral contribution

At current prices, the gross state domestic product (GSDP) of Arunachal was US$ 2.2 billion in 2013-14.

The GSDP increased at a CAGR of 16.1% from 2004-05 to 2013-14.

In 2013-14, the state's per capita income at current prices was US$ 1,511.1 compared to US$ 649.7 in 2004-05.

The per capita income had risen at a CAGR of 13.5% between 2004-05 and 2013-14.

The primary and tertiary sectors continue to dominate thecomposition of GSDP of Arunachal Pradesh.

In 2013-14, the primary sector contributed 43.1% to the state'sGSDP at current prices, followed by the tertiary sector (30.9%) and the secondary sector (26%).

At a CAGR of 18%, the primary sector has been the fastest growing sector among the three sectors from 2004-05 to 2013-14.

The growth was driven by agriculture,forestry and logging.

The tertiary sector expanded at a CAGR of 15.3% between 2004-05 and 2013-14.

The growth has been driven by trade, hotels, real estate, banking, insurance, transport,communications and other services.

The state's economy is mainly agrarian based on theterraced farming of rice and the cultivation of crops such asmaize, millet, wheat, pulses, sugarcane, ginger, oilseeds,cereals, potato, and pineapple.

Foreign investment flow

Department of Industrial Policy and Promotion According to the Department of Industrial Policy and Promotion (DIPP), cumulative FDI inflows from April 2000 toJanuary 2015 amounted to US$ 80 million.

In 2013-14, outstanding investments in the state were US$52.8 billion.

The biggest chunk of investment has been in electricitygeneration.

Of the total outstanding investments in 2013-14, the electricity sector accounted for around 93.8%, followed by the services sector (5.9%).

The central government has invested heavily in the hydro electricpower generation projects in Arunachal Pradesh.