ARUNACHAL PRADESH LAND OF THE RISING SUN

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 Executive Summary………………………….3  Advantage State……………………………...4  Arunachal Pradesh – An Introduction...... 5  Infrastructure Status……….……...... 14  Employment Opportunities…………. …….27  Major Industries in Arunachal Pradesh…..28  State Acts & Policies…………………...... 42

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EXECUTIVE SUMMARY

• India’s pent-up demand for electricity could be addressed by the state’s potential 60,000 Largest hydropower MW hydropower capacity. As of June 2016, the installed hydropower capacity in the state potential in India stood at 97.57 MW.

• The 23 km Harmuti (Assam) to Naharlagun route became operational in April 2014. In October 2014, the Union Railway Ministry approved the proposal to connect New Delhi Upcoming Railway with Naharlagun, 15 km away from , with a bi-weekly Rajdhani Express. The project is expected to be operational by April 2018.

• The state’s textile industry, including carpet making, enjoys a huge appeal. The state’s Carpet making carpets have received national and international fame for their creativity, design and quality.

• Arunachal Pradesh, with an area of 83,743 sq km, is the largest state in the Northeast of Largest state in India. Its diverse topography offers opportunities for non-timber based industries such as Northeast bamboo, cane and medicinal plants.

NLCPR Projects in • For the development of infrastructure in Arunachal Pradesh and other North East States, Non-Lapsable Central Pool of Resources (NLCPR) releases funds for various projects. Arunachal Pradesh During 2014-15, eight projects were sanctioned under this scheme with an investment of US$ 10.76 million.

Source: Ministry of Textile, Government of India, Central Electricity Authority, Arunachal Pradesh State Government, State Budget 2015-16

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ADVANTAGE ARUNACHAL PRADESH

June 2016 High economic growth Huge hydropower potential Pipeline • The GSDP increased at a compound annual • The hilly terrain and abundant rivers make the growth rate (CAGR) of 12.98% between 2004- state a potential powerhouse of the Northeast. 100+ 05 and 2015-16. Hydropower • As of October 2015, Arunachal Pradesh had a projects • The state has considerable mineral reserves generation total installed power generation capacity of that offer huge potential. having a installed 257.62 MW. Hydro energy (97.57 MW) accounted generation • Due to its topography, the state has varied for around 37.87 percent of this capacity. capacity: agro-climatic conditions suitable for horticulture capacity of 97.57 MW • The Department of Hydropower Development, of flowers and aromatic and medicinal plants. Arunachal Pradesh, is wholly entrusted with the 47,000 MW design, construction, operation and maintenance for next ten of hydropower projects in the state. years Advantage Arunachal Policy and fiscal Pradesh International incentives trade opportunities

• The state and central governments offer huge • The state’s location provides opportunities for fiscal and policy incentives for the development international trade with South Asian countries of important sectors. such as Myanmar, Bhutan and China. • Textiles and handicrafts from the state are in • In Facilitate and promote growth of the industry, demand in neighbouring countries. employment and investment in the state has • As of March 2015, value exports of all introduced State Industrial Policy 2008. commodities from the state were valued at US$ 6.48 million.

Source: Central Electricity Authority, Arunachal Pradesh State Government, CSO OCTOBER 2016 For updated information, please visit www.ibef.org 4 ARUNACHAL PRADESH LAND OF THE RISING SUN

ARUNACHAL PRADESH FACT FILE

Itanagar, Naharlagun, , Rupa, Bomdila, Bhalukpong, Seppa, and Daporijo are some of the major towns in the state. The land is mostly mountainous with the Himalayan ranges running north-south. The state is divided into five river valleys: the Kameng, the Subansiri, the Siang, the Lohit and the Tirap.

Arunachal Parameters Pradesh Capital Itanagar Source: Maps of India Geographical area (sq km) 83,743 Administrative districts (No) 17 Located in the Northeast of India, Arunachal Pradesh is the largest of the seven sister states. It shares borders with the Population density (persons per sq km) 17 neighbouring countries of Bhutan in the west, China (Tibet) Total population (million) 1.47 in the north and northeast and Myanmar in the east and southeast. The Indian states of Assam and Nagaland Male population (million) 0.71 border it in the south. Female population (million) 0.67 The most commonly spoken languages are Assamese, Sex ratio (females per 1,000 males) 938 Bengali and Hindi. English is the official language and primary medium of education in schools. Literacy rate (per cent) 65.38

Source: Government of Arunachal Pradesh website, Ministry of Development of North Eastern Region, Census 2011 OCTOBER 2016 For updated information, please visit www.ibef.org 5 ARUNACHAL PRADESH LAND OF THE RISING SUN

ARUNACHAL PRADESH IN FIGURES … (1/2)

Arunachal Parameter All states Source Pradesh

Economy 2015-16 2015-16

Directorate of Economics & Statistics of GSDP as a percentage of all states’ GSDP 0.1 100.0 Arunachal Pradesh, Central Statistics Office

Directorate of Economics & Statistics of GSDP growth rate (%) 14.9 8.64 Arunachal Pradesh, Central Statistics Office Directorate of Economics & Statistics of Per capita GSDP (US$) 2025.64 1546 Arunachal Pradesh, Central Statistics Office Physical Infrastructure

Installed power capacity (MW) 257.86 304,505.75 Central Electricity Authority, as of June 2016

1 Telecom Regulatory Authority of India, as of May Wireless subscribers (No) 11,105,770 1,033,157,014 2016 Telecom Regulatory Authority of India, as of Internet subscribers (No) 3,900,0001 334,340,000 January 2016

National Highway length (km) 2.513.05 100,087.08 NHAI & Road & Building Department

2 Airports (No) 5 125 Airports Authority of India

1Combined figures for the Northeast states comprising Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura, 2Non operational

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ARUNACHAL PRADESH IN FIGURES … (2/2)

Arunachal Parameter All states Source Pradesh Social Indicators

Literacy rate (%) 65.38 73.0 Census 2011

Birth rate (per 1,000 population) 19.3 21.6 SRS Bulletin Investment

Department of Industrial Policy & Promotion, From FDI equity inflows (US$ billion) 0.0941 288.51 April 2000 to March 2016

1FDI inflows for RBI’s (Reserve Bank of India’s) Guwahati-region, which includes Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura, SRS: Sample Registration System

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ECONOMIC SNAPSHOT – GSDP

GSDP of Arunachal Pradesh at current prices (in US$ million) Per capita GSDP (in US$)

2977.7 CAGR 2025.64 10.89% CAGR 2,572 1,751 1,581 1,523 12.98% 2,218 2,176 2,238 1,442 1,516 1,977 1,177 1,576 934 942 1,194 1,233 650 697 728

778 851 910

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

At current prices, the gross state domestic product (GSDP)* In 2015-16, the state’s per capita GSDP^ at current prices of Arunachal Pradesh was US$ 2.98 billion in 2015-16. was US$ 2,025.64 as compared to US$ 650 in 2004-05.

Arunachal Pradesh’s GSDP increased at a CAGR of The per capita GSDP increased at a CAGR of 10.89% 12.98% from 2004-05 to 2015-16. between 2004-05 and 2015-16.

Source: Directorate of Economics & Statistics of Arunachal Pradesh, Central Statistics Office GSDP* - Central Statistical Organisation Per Capita GSDP^ - calculated using GSDP million USD / Population in million

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ECONOMIC SNAPSHOT – NSDP

NSDP of Arunachal Pradesh at current prices (in US$ million) Per capita NSDP (in US$)

2621.23 1783.15 CAGR CAGR 1,465 12.59% 2055 2015 2068 2073 1,335 1,404 1,408 1,411 1831 10.51% 1,077 1442 856 861 1094 1127 594 638 667

711 779 834

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

At current prices, the net state domestic product (NSDP)# of The state’s per capita NSDP^ in 2015-16 was US$ 1,783.15 Arunachal Pradesh was US$ 2.62 billion in 2015-16. as compared to US$ 594 in 2004-05.

Arunachal Pradesh’s NSDP at current prices grew at a The per capita NSDP increased at an average rate of CAGR of 12.59% between 2004-05 and 2015-16. 10.51% between 2004-05 and 2015-16.

Source: Directorate of Economics & Statistics of Arunachal Pradesh, Central Statistics Office NSDP# - calculated using per capita NSDP x Population in million Per Capita NSDP^ - Economic and Statistical Organisation, Punjab (ESOPB)

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ECONOMIC SNAPSHOT – PERCENTAGE DISTRIBUTION OF GSDP

There has been a shift in the sectoral contribution from GSDP composition by sector primary and secondary to the tertiary sector. The overall performance of the economy during 2015-16 was buoyant. CAGR The primary and tertiary sectors continue to dominate the 14.79% composition of GSDP of the Northeastern state. In 2015-16, 33.10% 29.75% the primary sectorµ contributed 46.33% to the state’s GSDP at current prices, followed by the tertiary sector with a share 23.92% of 29.75% and the secondary sector with a share of 29.50% 12.87% 23.92%.

46.33% At a CAGR of 18.83%, the primary sector has been the 37.40% 18.83% fastest growing sector among the three sectors from 2004- 05 to 2015-16. 2004-05 2015-16 Primary Sector Secondary Sector Tertiary Sector The tertiary sector expanded at a CAGR of 14.79% between 2004-05 and 2015-16. Growth has been driven by trade, hotels, real estate, banking, insurance, transport, Source: Directorate of Economics & Statistics of Arunachal Pradesh, communications and other services. Central Statistics Office Sector-wise %share of GSDPµ -Geometric mean of YoY calculation from 2004-05 to 2014-15 The secondary sector increased at a CAGR of 12.87% between 2004-05 and 2015-16.

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ECONOMIC SNAPSHOT – AGRICULTURE PRODUCTION

The state's economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as Annual production – maize, millet, wheat, pulses, sugarcane, ginger, oilseeds, Crop 2015-16 cereals, potato, and pineapple. (‘000 metric tonnes) Flowers 154.85 In 2015-16, total production of horticulture crops in the state Paddy (rice) was recorded at 481.76 thousand metric tonnes, while the 2,309.3 total production of fruits and production of vegetables in the Fruits 9,964.03 state stood at around 9,964.03 thousand metric tonnes and 5,124.26 thousand metric tonnes in 2015-16, respectively. Cereals 101.81 Vegetables 5,124.26 The state also produces various food grains including paddy (rice), cereals, etc. Major cereal crops of the state are rice, Plantation 1,101.51 wheat, maize and millet. During 2015-16, the northern Aromatics & medicinal 8.97 region of India recorded rice production of 2,309.3 thousand metric tonnes. Spices 920.91 Honey 1.65 Under Rashtriya Krishi Vikas Yojana, US$4.82 million was Cabbage 1 allocated to the state during 2015-16, of which US$2.41 15.4 million has been released and US$2.12 million has been Cauliflower 5.41 utilised by the state.

Source: NEDFI Databank, Ministry of Agriculture, 22014-15

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ECONOMIC SNAPSHOT – INVESTMENTS AND FDI INFLOWS

According to the Department of Industrial Policy & FDI equity inflows1, 2008-09 to 2015-16 (US$ million) Promotion (DIPP), FDI inflows1 to the Northeast states totalled to US$ 94 million from April 2000 to March 2016.

FDI inflows in northeast states between April 2015 and 42 March 2016 totaled to US$ 10 million.

Northeast states contributed around 0.032% share to the 11 cumulative FDI inflows in India during 2015-16. 8 10 5 5 1 0.6

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Source: Department of Industrial Policy & Promotion 1Including Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura

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ANNUAL BUDGET 2015-16

For the Financial Year 2016-17, the category-wise breakup of the financial plan for the state of Arunachal is as follows:

State annual budget (US$ million)

Category 2016-17

Health 145.48

Education 296.64

Agriculture 27.18 Horticulture 4.03 Roads &Buildings 3.89 Sports & Youth 1.79

Industries 8.96

Geology & Mining 1.64

Tourism 12.96

Power 16.43

Source: State Budget 2016-17 OCTOBER 2016 For updated information, please visit www.ibef.org 13 ARUNACHAL PRADESH LAND OF THE RISING SUN

PHYSICAL INFRASTRUCTURE – ROADS

In September 2015, the Government of Arunachal Pradesh announced plans to construct new roads and even connect the villages located at the India-China border. For the construction of this project, the Government approved an investment of US$ 555 million and the roads would cover a length of 2,098.40 km with 219 bridges.

During 2015-16 (up to October 2015), under Pradhan Mantri Gram Sadak Yojana (PMGSY), an expenditure of US$ 15.91 million was incurred and US$ 42.01 million was allocated by the state government for development of road works in the state. Source: Maps of India

Arunachal Pradesh has about 12,169 km of major Road infrastructure Road length (km) district roads. The state government has also allocated US$ 4.98 million for the reconstruction of the district National highways (km) 2,513.05 roads that were not included under the CC (Cement Concrete) road projects in the budget 2015-16. Total 20,137.05

During 2015-16, the Government of Arunachal Pradesh approved an investment of US$ 331.78 million for the Status under PMGSY (During 2015-16- up to October 2015) inspection of roads to different administrative centres. In June 2015, the remaining 3,723 km have been Habitations connected 1 approved for preparation of a detailed project report that is scheduled to be completed by 2017. Length completed (km) 197.44

Source: NHAI OCTOBER 2016 For updated information, please visit www.ibef.org 14 ARUNACHAL PRADESH LAND OF THE RISING SUN

PHYSICAL INFRASTRUCTURE – AIRPORTS AND RAILWAYS

In February 2015, the Government of Arunachal Pradesh announced plans to construct six new airports in the state. The first airport in is expected to be operational by the end of July 2016.

The state’s capital, Itanagar, was put on the country's railway map in April 2014. The state government plans to extend the existing railway connectivity and connect the Upper Assam areas with Arunachal Pradesh. In October 2014, the Union Railway Ministry approved the proposal to connect New Delhi with Naharlagun, 15 km away from Itanagar, with a bi-weekly Rajdhani Express. The project is expected to be operational by April 2018.

Domestic airport^

Inter-state helicopter service*

Source: Airports Authority of India; Department of Civil Aviation, Government of Arunachal Pradesh. North East Frontier Railway (NEFR) ^Non-operational, *Major route State Budget 2015-16

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PHYSICAL INFRASTRUCTURE – POWER

As of June 2016, Arunachal Pradesh had a total installed power generation capacity of 257.86 MW. Out of these Installed power capacity (MW) central utilities contributed 152.98 MW, private utilities 257.62 contributed 0.27 MW and 104.61 MW under state utilities. 249.4 249.4 257.9 213.3 213.7 201.9 Renewable energy in conjunction with hydropower are the 180.1 major sources of electricity generation in the state, and contributed around 104.88 MW and 97.57 MW to the installed capacity of the state, respectively.

Power industry revenue (US$ million)

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Year Revenue (US$ million)

2009-10 15.99 2010-11 19.91 Source: Central Electricity Authority 1As of November 2015 2011-12 17.18 2012-13 15.61 2013-14 15.44 2014-15 19.77

Source: Central Electricity of Authority

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PHYSICAL INFRASTRUCTURE – TELECOM

Telecom Infrastructure (as of May 2016) As of May 2016, the Northeast region had 123,270 wireline (1) subscribers for BSNL and 1,566,834 BSNL wireless Wireless subscribers 11,105,770 (1) subscribers. Wire-line subscribers 123,420 (1) 2 Internet subscribers 3,900,000 According to Telecom Regulatory Authority of India (TRAI), (1) 2 Northeast had a total of 11.10 million wireless subscribers Rural internet subscribers 2,040,000 and 123 thousand wireline subscribers as of May 2016. (1) 2 Urban internet subscribers 1,860,000

By the end of May 2016, 428,952 subscribers had submitted request for mobile number portability in the North Source: Telecom Regulatory Authority of India, India Post, East. Moreover, total tele-density in the North East region 1Combined figures for the Northeast states comprising Arunachal Pradesh, was recorded to be 80.3% as of May 2016. The total Manipur, Meghalaya, Mizoram, Nagaland and Tripura number of post offices in the Northeast, as of December 2As of January 2016 2015, was recorded at 2,920. Some of the major telecom operators in In September 2015, one of the leading British telecom Arunachal Pradesh companies, New Call Telecom Ltd announced its plans to invest US$ 300 million in the north east states of India in the Bharat Sanchar Nigam Limited (BSNL) telecom sector over a period of one year. Bharti Airtel Aircel Limited Vodafone Reliance Communications Idea Cellular

Source: Economic Times, The Hindu Businessline, Telecom Regulatory Authority of India

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DEVELOPMENT PROJECTS: URBAN INFRASTRUCTURE

Urban infrastructure projects are developed under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Development projects related to water supply, solid waste management and urban transport have been sanctioned under the JNNURM. In addition, welfare scheme for the urban poor, Integrated Low Cost Sanitation scheme (ILCS), etc. are operational across the state of Arunachal Pradesh for conversion of dry latrines into pour flush latrines and construction of new latrines. By the end of 2014, JNNURM cumulatively approved 3 urbanization projects worth US$ 0.497 million for urban development in Arunachal Pradesh.

In September, 2015, a meeting was held between the ministry of Urban infrastructure projects approved under Urban Development & Parliamentary Affairs and the state JNNURM government for the establishment of smart city in the state and Itanagar has been selected as a smart city. A amount of of US$ Amount 12.11 million would be sanctioned to Arunachal Pradesh for various Project name (US$ projects under Jawaharlal Nehru National Urban Renewal Mission million) (JNNURM) by the central government. 752 dwelling units with basic 1 service to urban poor for 7.49 Urban Infrastructure Projects on priority for NEC* Annual Plan Karsingsa, Itanagar 2015-16 Co and Improvement shelter for 1 Outlay Amount (US$ urban poor safai karamchari at 0.68 Project Name Million) Pappu Nallah, Naharlagaun BSUP housing scheme for Shopping complex at Ganga Market, 1 0.78 1 Itanagar construction of 144 dwelling units 1.93 at Nirjuli, Itanagar

Source: Department of Planning, Itanagar 1NEC: North Eastern Council Source: JNNURM, Ministry of Urban Development, Government of India, Budget 2015-16 of Arunachal Pradesh

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SOCIAL INFRASTRUCTURE – EDUCATION … (1/2)

As per the 2011 census, Arunachal Pradesh has a literacy rate of 65.38%; the male literacy rate stood at 72.60% and Literacy rates, 2015-16 (%) the female literacy rate at 57.70%. Literacy rate 65.38

There is a proposal to establish five degree colleges, seven Male literacy 72.60 new polytechnics, and five new technical/professional colleges in the state. Female literacy 57.70

Moreover, the Government plans to setup two new model Source: Census 2011 colleges at Tirap and Longding districts to improve the education sector.

Arunachal Pradesh has become the first state in the country Central Assistance Released under Mid Day Meal to launch a web-based educational program for all schools Scheme (US$ million) in collaboration with Google Inc. The system aims to bring the power of the web into the classroom and improve productivity by simplifying the teaching process. 2013-14 6.15

Under Sarva Shiksha Abhiyan, US$ 27.77 million was released by Government of India for Arunachal Pradesh, 2014-15 5.12 during 2015-16. 2015-16 2.95

Source: Ministry Of Human Resource Development

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SOCIAL INFRASTRUCTURE – EDUCATION … (2/2)

Higher education infrastructure Major higher educational institutes in Arunachal (As of August 2015) Pradesh Universities/deemed universities 3 • North Eastern Regional Institute of Science and 1 Engineering colleges 24 Technology , Nirjuli Polytechnics 2 • National Institute of Technology, Yupia • Jawaharlal Nehru College, Medical colleges 4 • Industrial Training Institute (, Daporijo and Other colleges 8 ) 2 • College of Horticulture and Forestry

Source: Directorate of Higher and Technical Education, Source: Directorate of Higher and Technical Education, Government of Arunachal Pradesh Government of Arunachal Pradesh 1Deemed university, 2Under the Central Agricultural University

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SOCIAL INFRASTRUCTURE – HEALTH

To support its huge rural population, Arunachal Pradesh has a three-tier public healthcare infrastructure comprising sub- Health infrastructure in Arunachal Pradesh centres, primary health centres and community health centres. District hospitals 11 In addition, there are district hospitals in most districts. Community health centres 19 In budget 2015-16, investment plans of US$ 4.98 million were Primary health centres 58 announced for Universal Health Insurance Scheme by the Sub-centres 273 Government of Arunachal Pradesh. The Government set aside US$ 34.8 million for healthcare for 2015-16. Ayurvedic dispensaries 4 Homoeopathic hospitals 37 The Rashtriya Swashth Bima Yojna benefitted nearly 267 families during 2014-15, as each family was aided with nearly US$ 500 during the year. Health indicators of Arunachal Pradesh

Source: State Budget 2015-16 1 Birth rate (per thousand persons) 19.3

1 Death rate (per thousand persons) 5.8

Infant mortality rate 2 32 (per thousand live births)

Source: Government of Arunachal Pradesh 1Per thousand persons, 2Per thousand live births

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CULTURAL INFRASTRUCTURE…(1/2)

Arunachal Pradesh is predominantly a tribal state and hosts many local scheduled tribes. About two thirds of its population belongs to scheduled tribe - from 26 major tribes and more than 100 sub-tribes. The different tribes have their own dialects. These tribes have a rich cultural heritage and follow distinct languages, costumes and festivals. The varied culture of the tribes is reflected in their bamboo, wood and cane handicrafts; carpets; traditional ornaments and paintings.

Major festivals observed in the state are Mopin, Solung, Nyokum, Lossar, Si-Donyi, Boori-boot, Dree, Reh, Sipong Yong, Chalo-loku and Kshyatsowai. The key tourist destinations are Parasuram Kund (Lohit), the Namdapha National Park (Changlang), the Ita Fort and Jawaharlal Nehru State Museum (Itanagar), the Tawang Monastery (Tawang) and the Sela Lake (Bomdila).

Trekking, river rafting, archery, mountaineering, fishing and angling are the prominent sports in Arunachal Pradesh. Sports infrastructure available in the state includes the Rajiv Gandhi Stadium in Naharlagun, Nyikum Niya Indoor Stadium in Nirjuli and Nehru Stadium in Khonsa. Under budget 2015-16 scheme, an amount of US$ 0.04 million would be provided to supply supplementary diets for the players at times of coaching camps.

Approved Projects Under Annual Plan 2015-16 Project name Outlay amount (US$ ‘000) Self defence training for girls in martial arts approved for 244 government schools 34.30 Kala Utsav : Performing arts (dance, music and theatre) 9.37

Source: State Budget 2015-16

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CULTURAL INFRASTRUCTURE…(2/2)

Cultural Infrastructure Projects at Priority for NEC1 Annual Plan 2015-16 Project Name Amount (US$ million) Multi purpose community hall cum indoor stadium at ADC headquarter, Nyapin of Kurun-Kumey District 0.46 Cultural Centre at Solung-Mopin Ground, Itanagar 0.83 Auditorium cum badfminton hall at Brum Village, Naharlagun 0.62 Football stadium at Sakiang under 0.62 Football stadium at Mai, Lower Subansisri district 0.62 General stadium at Palin, 0.62 Multipurpose utility stadium at Parsi-Parlo 0.62 Multipurpose stadium at Parsi-Parlo 0.62 Football stadum at Mebo, East Siang Distrcit 0.62 Multipurpose auditorium cum badminton hall at Noksa, 0.62 Multipurpose auditorium cum badminton hall at radum Village, Subansiri district 0.62 Stadium in Dirang 0.62 Football stadium at Lumla 0.62

Source: Department of Planning, Itanagar 1NEC: North Eastern Council OCTOBER 2016 23 ARUNACHAL PRADESH LAND OF THE RISING SUN

INDUSTRIAL INFRASTRUCTURE … (1/3)

Arunachal Pradesh has 12 industrial estates located in different districts and spread over a total area of 51.9 hectare. These industrial estates have been Notified industrial estates developed in land-areas ranging from 4,540 to 202,342.8 square metres, with the primary objective Location District Area (sq m) of growth and development of small scale industries. Tirap 18,360

The Government of Arunachal Pradesh decided to Khonsa Tirap 4,540 distribute US$ 1.66 million among unemployed Pasighat East Siang 80,080 engineers in the state, for the purpose of establishing manufacturing units/small scale industries in the Tawang Tawang 28,665 state in 2015-16. Tippi West Kameng 27,961.32

An amount of US$ 0.08 million was planned for the Wanghoo West Kameng 60,705 feasibility study of special economic zones (SEZs) in Naharlagun Papumpare 32,376 Arunachal Pradesh. Chandranagar Papumpare 16,188

In order to promote agro-based industries, the Namsai Lohit 16,188 Government proposed to provide special incentives such as VAT refund for the next five years from the Changlang Town Changlang 11,372 date of production. Khachang Changlang 20,025

Moreover, in order to attract more investments, Bam West Siang 202,325 investors who set up food processing units, cold storages and tissue culture labs in the state would be provided power dues refund at a rate of 10% per Source: Department of Industries, Government of Arunachal Pradesh year.

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INDUSTRIAL INFRASTRUCTURE … (2/3)

The central government launched "Look East Policy" which has helped in Notified integrated infrastructure development of infrastructure for industries and trade. In July 2015, Government of development centres Arunachal Pradesh has announced to set-up a 12,000 MW hydroelectric plant in the Location District state. Government has also targeted to include 42 hydroelectric projects with an estimated capacity of 27,000 MW in the coming years. Deomali Tirap Tippi West Kameng For the development of infrastructure of Arunachal and other north east states, Non- Lapsable Central Pool of Resources (NLCPR) releases funds for various projects. Dirang West Kameng Iduli Dibang Valley During FY16 only one project was sanctioned under the state of Arunachal Pradesh under the NLCPR Scheme, while funds worth US$ 12.36 million were released Balinong Changlang during FY16 (up to March 2016) in the state.

NLCPR sanctioned projects and approved costs for Arunachal Pradesh

Notified industrial areas 59.03

Location District

Bhalukpong West Kameng 24.15 24

Roing Dibang Valley 9 8 10.76

Tezu Lohit 2012-13 2013-14 2014-15 Banderdewn Papumpare Sanctioned Projects (Nos.) Approved Costs (US$ Million)

Source: Department of Industries, Government of Arunachal Pradesh; Ministry of Development of North Eastern Region, Government of India; NLCPR - Non-Lapsable Central Pool of Resources (NLCPR) OCTOBER 2016 For updated information, please visit www.ibef.org 25 ARUNACHAL PRADESH LAND OF THE RISING SUN

INDUSTRIAL INFRASTRUCTURE … (3/3)

The state government has set up District Industries Centres (DICs) across districts. These DICs play a vital role in industrial development by providing services to entrepreneurs that include identification of suitable schemes; preparation of project reports; arrangement for providing required plant, machinery and raw-materials; assistance in availing incentives and facilities provided by both central and state governments; and liaison with all development departments and financial institutions to provide assistance to prospective entrepreneurs. In addition, as of April 2015, there were 6 industrial training institutes (ITIs) in Arunachal Pradesh. Out of these, five are run by the Government and one ITI is privately controlled.

Based on the availability of resources, the state has identified thrust areas for industrial development:

Industries based on agricultural, horticultural and plantation produce.

Industries based on non-timber forest produce such as bamboo, cane (rattan), medicinal plants/herbs, aromatic grass, tea and coffee.

Industries based on locally available raw-materials, except timber.

Textiles (handlooms and power-looms), handicrafts and sericulture.

Electronics and IT-based enterprises.

Mineral-based industries (such as ferro-alloys, cement, etc.).

Facilitation and development of industrial infrastructure, including power and communications, under public private partnership.

Food processing industries and engineering and allied industries (rolling mill, steel mill, etc.); and tourism

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EMPLOYMENT OPPORTUNITIES

The state’s Chief Minister has assured the addition of 0.1 million jobs during the 12th Five Year Plan (2012-2017).

During the financial year 2015-16, creation of 12,300 job opportunities was targeted. However, nearly 15,000 youth were employed during the year, exceeding the set target by a huge margin.

The Chief Minister's Skill Development Programme helped in improving employability of educated unemployed youth in the state. Its main objective is to provide 100,000 jobs for unemployed youths during the 12th Five Year Plan. Under this initiative, Job Mela-cum-Skill Development Interview Rally is being organised at regular intervals. Till May 2015, more than 61,500 youths have been employed or self employed.

Furthermore, the state government has announced that a minimum of 10% of the funds allocated to the MLA local area development scheme will be used to train unemployed youths. This will help them acquire the necessary skills for taking up self-employment activities or for enhancing their employability.

The decision of establishing a skill development centre in a phased manner in each and every district of the state was also made in the budget of 2015-16. In addition to this, an employment opportunity, under the Arunachal Agriculture Employment Generation Scheme, with an allocation of US$ 0.83 million would also be launched for the youth under the agriculture sector.

Other schemes that have helped in employment generation include: National Rural Employment Guarantee Act (NREGA), Prime Minister's Rozgar Yojana (PMRY), Rural Employment Generation Programme (REGP), Scheme for Working Women Hostels, Swarnjayanti Gram Swarozgar Yojana (SGSY) and Training of Rural Youth for Self-Employment (TRYSEM).

Source: Government of Arunachal Pradesh, State Budget 2015-16

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KEY INDUSTRIES

The resources, policy incentives and climate in state The Department of Industries, Government of Arunachal support investments in mining and mineral products Pradesh, is responsible for promoting industrial activities in (including cement), tissue culture and floriculture, plantation the state to provide employment opportunities to the rural crops (tea, rubber, etc.) and agro-based industries. and urban people.

North Eastern Development Finance Corporation Limited is The DICs also help the local entrepreneurs in identifying engaged in catalysing industrial growth of the Northeastern suitable schemes, preparing feasibility reports, arranging states (including Arunachal Pradesh) by providing supply of tools and equipment, providing credit facilities, etc. counselling, timely advice and assistance for building quality enterprises. Key industries in Arunachal Pradesh The central government also approved the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. • Art and crafts The policy provides several incentives: incentive on • Weaving business expansion, 100% excise duty and income tax • Cane and bamboo exemption, capital investment subsidy, interest subsidy and • Carpet weaving insurance premium reimbursement. • Wood carving • Ornaments The Department of Industries has set up District Industries Centres (DICs) and Sub-District Industries Centres (Sub- • Tourism DICs) for the industrial development of small scale, tiny and • Horticulture village industries. • Saw mills and plywood • Power • Mineral-based industry

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KEY INDUSTRIES – POWER … (1/3)

As of June 2016, Arunachal Pradesh had a total installed For the installation of 40,000 MWp grid connected solar rooftop power generation capacity of 257.86 MW. Hydro energy system in the country by 2022, the target allocated for the state (97.57 MW) accounted for around 37.84% of Arunachal is 50 MWp. Four of the biggest projects under construction Pradesh’s installed power generation capacity. The include the 2,000 MW Subansiri Lower, 600 MW Kameng, 110 Department of Hydropower Development, Arunachal MW Pare and 1,750 MW Demwa Lower hydroelectric projects. Pradesh, is wholly entrusted with the design, construction, These projects are expected to be completed by the end of operation and maintenance of hydropower projects in the 2017. state. A 2x30 KW Ashapani micro hydel project has been After renewable energy and hydropower, thermal power is commissioned in of the state, with an objective of the prime source of electricity generation in the state. As of electrification of circle and its adjoining villages. June 2016, the state accounted for an installed capacity of power generation of 55.41 MW from thermal power plants The Ministry of Environment and Forests (MoEF) granted pre- out of which 43.06 MW is contributed by gas power plants construction scoping clearances to over 50 projects under the and 12.35 MW from coal power plants. EIA notification 2006. Final environmental clearance has been awarded to 13 projects. These projects are expected to be On account of its hilly terrain and abundant rivers, operational by 2019. Arunachal Pradesh is estimated to have hydropower potential of 60,000 MW (through mega projects). Some of the key players Key regions for tapping hydropower include Dibang, Tawang, Subansiri Upper, Subansiri Middle, Kameng and • NTPC Ltd Lohit. The Government has invited domestic power • NHPC Ltd companies in the region to develop hydropower plants. • North Eastern Electric Power Corporation (NEEPCO) • Bhilwara Energy Ltd

Source: Central Electricity Authority OCTOBER 2016 For updated information, please visit www.ibef.org 29 ARUNACHAL PRADESH LAND OF THE RISING SUN

KEY INDUSTRIES – POWER … (2/3)

NTPC Ltd • NTPC Ltd is a Maharatana Public Sector Unit (PSU) engaged in thermal power production. The company is among the leading thermal power generator. It has also diversified into hydropower, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution. • NTPC plans to set up a hydropower project of around 9,500 MW in Upper , Arunachal Pradesh. The company’s revenues stood at US$12.02 billion in 2015-16.

• NHPC Limited (formerly known as National Hydroelectric Power Corporation Limited) is a public NHPC Ltd sector major in hydroelectric power generation. The company signed an MoU with the state to invest US$ 4.5 billion during the 12th Plan period and already has four ongoing projects with an installed capacity of 6,400 MW. Two are located in the , one in the Dibang district and one in Subansiri Lower district. In 2015-16, the company reported revenues of US$1.31 billion.

North Eastern Electric • North Eastern Electric Power Corporation (NEEPCO) is a central PSU engaged in power Power Corp (NEEPCO) generation in the Northeastern region. It is one of the oldest power generating companies and controls 55.0% of the region’s installed capacity. The company completed the prestigious 405 MW Ranganadi project in Arunachal Pradesh. NEEPCO is developing two projects in the state: Pare hydroelectric project (110 MW) and Kameng hydroelectric project (600 MW). The company earned a total revenue of US$ 253.90 million in 2014-15.

Jindal Power • Jindal Power Limited (JPL), a subsidiary of Jindal Steel & Power Ltd, has major presence in power generation and has set up several mega power projects in the country. In 2015-16, the company reported revenues of US$2.81 billion.

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KEY INDUSTRIES – POWER … (3/3)

Hydro power projects in the North East , 2015-161

Central sector Private State/unallocated

Installed capacity Installed capacity Total installed capacity Installed capacity (MW) (MW) (MW) (MW)

Arunachal Pradesh 152.98 0.03 104.61 257.62

Assam 874.64 28.60 466.21 1,369.45 Manipur 164.66 - 41.45 206.11 Meghalaya 197.42 - 313.03 510.45 Mizoram 82.95 - 36.47 119.42 Nagaland 110.37 - 29.67 140.04 Tripura 450.39 5.00 185.51 640.90 Sikkim 167.37 195.00 52.11 414.48

Total 2,200.78 228.63 1,299.06 3,658.47

Source: Central Electricity Authority, 1As of October, 2015

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KEY INDUSTRIES – MINERAL-BASED INDUSTRY

Arunachal State Mineral Policy, 2014 has been prepared on the basis of the objectives of the National Mineral Policy, 2008. Creation of Arunachal Mineral Development Fund shall be in accordance with this policy for its utilisation towards mineral exploration and development of mining activities in the state.

During 2014–15, mineral production generated US$ 76.4 million for the state’s exchequer. Total extraction of coal since April 2007 to March 2015 was 1.8 million tonnes.

During FY16, the total production of crude petroleum in the state stood at 59 thousand tonnes. The state also produced Source: Maps of India 12 mcm of natural gas, during the same period. Arunachal Pradesh has considerable mineral reserves, and preliminary studies have highlighted economic mineral Reserves/resources of minerals in Arunachal Pradesh deposits in considerable quantity. Ore/mineral Reserves (million tonnes) The state has reserves/resources of coal in Namchik Namphuk Coalfields; dolomite in West Kameng district; Coal 86.5 fuller's earth in Tirap district; graphite in Lohit, Upper Siang Dolomite 78.3 and Upper Subansiri districts; and limestone in Dibang Valley, Lohit, Upper Siang and Upper Subansiri districts. Limestone 482.79 Graphite 72.75 Production of raw coal in the state increased from 79,000 tonnes in 2007-08 to 189,400 tonnes in 2014-15. Fuller's earth 20.01 Quartzite 5.27 During FY16 the total value of mineral production in the state stood at US$ 17.90 thousand. Source: Indian Bureau of Mines OCTOBER 2016 For updated information, please visit www.ibef.org 32 ARUNACHAL PRADESH LAND OF THE RISING SUN

KEY INDUSTRIES – AGRICULTURE AND FOREST-BASED INDUSTRIES

Agriculture is the mainstay of the economy of Arunachal Under Rashtriya Krishi Vikas Yojana, US$4.82 million was Pradesh. It is mainly depended on 'jhum' cultivation. The allocated to the state during 2015-16, out of which US$2.41 state’s agriculture and allied sectors have growth rates that million has been released and US$ 2.12 million has been are three times the national average. utilized by the state. Major agro and forest based industries in the state are related to tea, fruit, non-timber and plywood industries. Around two-thirds of the state’s population is dependent on climate sensitive natural resources such as agriculture, forest, biodiversity and water availability. The state government’s New Agricultural Policy 2001 aims to achieve higher economic growth and create job opportunities for the unemployed in rural areas. The state government is focusing on improving farmer income through higher productivity, use of suitable farm techniques, upgrading technical competency, marketing support and availability of a cooperative credit network. Non-timber based industries include bamboo, cane, rubber and medicinal plants. The industry is characterised by many regional players; several units have been set up by the Arunachal Pradesh Forest Corporation (APFC), a government organisation. Horticulture has a vast potential, owing to good agro- climatic conditions and topography, for the development of varied varieties of fruits and vegetables. Source: Arunachal Pradesh State Portal

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KEY INDUSTRIES – TOURISM

Tourism has grown rapidly in the recent years with eco The inception of railways in the state is expected to boost and adventure tourism, cultural tourism and religious tourist arrivals. The Government inked an MoU with the tourism being the major areas of interest. Major sports Indian Railway Catering and Tourism Corporation for of interest to travellers include angling, boating, rafting, promoting the tourism sector. To boost tourist inflow and trekking and hiking. make the state more visitor friendly, the Government is Arunachal Pradesh is an “Orchid Paradise”, accounting working on simplifying the process of application & issuance for 601 species of orchids, or 52% of the species of the Inner Line Permit. known in India. Various orchid centres are situated in Itanagar, Tipi, Sessa, Dirang, Jengging, Roing, which Under the Swadesh Darshan scheme, for the development have a good germ-plasm collection of nearly 400 of adventure tourism in the state, US$14.83 million was species of orchids as well as hybrids. An orchid sanctioned by the state government, during 2015-16. research centre has been established at Tipi to promote orchid conservation, research and development. Arrival of foreign tourists in Arunachal Pradesh (in ‘000s) Popular tourist attractions include Tawang (a town with 10.8 a Buddhist monastery) at 3,000 m elevation, Ziro (which holds cultural festivals), Basar, the Namdapha tiger project in and Sela lake near 5.7 Bomdila with its bamboo bridges overhanging the river. 5.2 Under the ‘Chief Minister’s Paryatan Vikaas Yojana’, a project has been launched to provide subsidised tourist cabs to educated unemployed youth across districts. For this, a provision of US$ 0.56 million was made during 2014-15. In 2015-16, foreign tourist arrivals in FY 2013 FY 2014 FY 2015 the state stood at 5,700.

Source: Ministry of Tourism, Government of India

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KEY INDUSTRIES – TEXTILES

Textile is a grass-roots industry in Arunachal Pradesh and provides employment, mainly to women. Most of the units are home- based and have a small scale of operations.

The state boasts of an enriching array of unique and appealing handloom designs from each of its tribes. The products include skirts (gale), shirts (galuk), cotton shawls, side bags, and curtain cloth.

Carpet making is one of the important occupations in the districts of Tawang, West Kameng, Changlang and Upper Siang. The state’s carpets have received national and international repute due to their quality. The carpet weaving industry is promoted through the Government craft centre.

Carpets are woven with varied colours, designs (geometric, dragon, floral) and shapes. The other main products of the industry in the state are wall hangings, cushion pads, telephone pads, floor coverings, etc. With increase in demand, carpets have become a major item of trade as well as a major occupation for women folks of the state.

In 2015-16, the production of raw silk in the state increased to 37 metric tonnes from 12 metric tonnes in 2014-15.

Under NERTPS (North East Region Textile Promotion Scheme) programme, in-situ conservation is being done for muga as well as other species of wild silk moth in the state.

Out of the total cost of US$ 4.50 million under Intensive Bovoltine Sericulture Development Project, till June 2016, US$ 840.20 thousand has been released by Government of India for the state of Arunachal Pradesh.

Source: Department of Textile & Handicraft(s), Arunachal Pradesh Central Silk Board, Ministry of Textiles – Government of India

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KEY APPROVALS REQUIRED … (1/2)

Concerned department of S No List of approvals and clearances required state

1 Incorporation of company/partnership firm/co-operatives Registrar of Companies

2 Registration, Industrial Entrepreneurs Memorandum (IEM), industrial licenses Department of Industries 3 Permission for land use

Arunachal Pradesh Industrial Development and Financial 4 Allotment of land Corporation Limited/ Department of Industries

5 Site environmental approvals Ministry of Environment and Forests, Government of India; Arunachal Pradesh State 6 No-objection certificate and consent under Water and Pollution Control Act Pollution Control Board (APSPCB)

7 Registration under State’s Sales Tax Act and Central and State Excise Act Department of Tax and Excise, Government of 8 Commercial taxes Arunachal Pradesh

Source: Government of Arunachal Pradesh

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KEY APPROVALS REQUIRED … (2/2)

Concerned department of S No List of approvals and clearances required state

9 Sanction of power Department of Power, 10 Power feasibility Arunachal Pradesh

11 Power connection

Respective District 12 Approval for construction activity and building plan Municipality

13 Water and sewerage clearance Department of Public Health Engineering 14 Water connection

Source: Government of Arunachal Pradesh

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KEY INVESTMENT PROMOTION OFFICES … (1/2)

Agency Description

• The Department of Industries is the main executive and regulatory agency functioning under the state government. It oversees and monitors the overall industrial development activities in the state. • The department is engaged in various activities such as: a) Formulating Industrial Policy and setting up of industrial estates/growth centres/ district Department of Industries industries centres. b) Registering and regulating industries. c) Providing financial assistance to small scale and other industries. d) Distributing scarce and indigenous raw-materials to different industrial units. e) Apprenticeship Training Programmes through ITIs and other industrial development related activities.

• Incorporated under the Companies Act, 1956, in August 1978. • To promote and set up finance industries in Arunachal Pradesh. Arunachal Pradesh Industrial Development • For industrial development in Arunachal Pradesh, the infrastructure facilities that are being and Financial Corporation Limited (APIDFC) handled by the Department of Industries of the state are expected to be handed over to APIDFC. Implement schemes of assistance of National Scheduled Castes and Scheduled Tribes Finance and Development Corporation Limited (NSFDC).

• Established in the year 1996, the State Government Agency, Arunachal Pradesh Energy Development Agency (APEDA) is registered under the Societies Registration Act 1860. • State Designated Agency (SDA) for implementation and enforcement of the Energy Arunachal Pradesh Energy Development Conservation Act, 2001, in coordination with the Bureau of Energy Efficiency (BEE), Agency (APEDA) Ministry of Power, Government of India. • Also the state nodal agency for projects connected with Clean Development Mechanism (CDM).

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KEY INVESTMENT PROMOTION OFFICES … (2/2)

Agency Description

• NEDFi is promoted by leading public financial institutions: Industrial Development Bank of India (IDBI), State Bank of India (SBI), Life Insurance Corporation of India (LIC), Small Industries Development Bank of India (SIDBI), Industrial Finance Corporation of India (IFCI), Industrial Credit and Infrastructure Corporation of India (ICICI), Specified undertakings of Unit Trust of India (SUUTI), General Insurance Corporation of India (GIC) North Eastern Development Finance and its subsidiaries. Incorporated in August 1995, NEDFi is headquartered in Guwahati, Corporation Limited (NEDFi) Assam, and works under the administrative control of the Ministry of Development of North Eastern Region (DoNER), Government of India. • It services micro, small, medium and large enterprises through facilities such as project and equipment finance, working capital finance, schemes for development of entrepreneurial skills and market development for products from the Northeast.

• North Eastern Handicrafts and Handloom Development Corporation (NEHHDC), is under the control of Ministry of Development of North Eastern Region (DoNER), Government of India. • Established in 1977, the corporation develops and promotes the region’s indigenous North Eastern Handicrafts and Handloom crafts by connecting various craftsmen of the region and creates different opportunities. Development Corporation (NEHHDC) • Improves the accessibility of various goods by establishing and promoting sales centers in the region. • Facilitates provision of technical, financial and other related guidance for various craftsmen, weavers, etc. • To upgrade traditional skills by providing proper training.

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CONTACT LIST

Agency Contact information

Government of Arunachal Pradesh Udyog Sadan, ltanagar - 791111 Department of Industries Phone: 91-360-2212 323/ 2214 456 Fax: 91-360-2211 569 E-mail: [email protected]

C Sector, Near Petrol Pump Arunachal Pradesh Industrial Development and Itanagar - 791111 Financial Corporation Limited (APIDFC) Phone: + 91-360-2211 763, 2212 012

Urja Bhawan Post Box No 124, Arunachal Pradesh Energy Development Agency Itanagar - 791111 (APEDA) Arunachal Pradesh Phone: 91-360-2211 160, 2217870 E-mail: [email protected]

NH-52A, Main Road, E-Sector, North Eastern Development Finance Corporation Ltd Itanagar - 791111, (NEDFi) Arunachal Pradesh Phone/Fax: 91-360-2217 694

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COST OF DOING BUSINESS IN ARUNACHAL PRADESH

Cost parameter Cost estimate Source

Hotel costs (per room per night) US$ 8 to US$ 75 State Tourism website

Commercial: US 6.0 cents to US 8.5 cents Department of Power, Government of Power cost (per kWh) Industrial: US 7.5 cents to US 9.0 cents Arunachal Pradesh

Labour cost Unskilled: US$ 3.9 to US$ 4.9 Ministry of Labour and Employment, (minimum wages per day) Skilled: US$ 5.8 to US$ 6.8 Government of India

Water (per 1,000 litres) Commercial and industrial: US 20 cents Industry sources

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STATE ACTS AND POLICIES … (1/2)

Public Private Partnership Policy 2011

Objectives • Leverage State and Central Government funds to support private investment. • Prepare a shelf of projects to be offered for PPP and take them forward with the assistance of the owner departments through a transparent selection process. Read more

State Industrial Policy 2008

Objectives • Facilitate and promote growth of the industry, employment and investment in the state. • To attract investments from domestic and foreign companies. Read more

Hydro Power Policy 2008

Objectives • Harness hydropower potential of the state in a manner that is consistent with the provisions of the Electricity Act, 2003, and the National Electricity Policy and other policies formulated in the Act. • Accelerate the speed of hydropower development through participation of both the central public sector undertakings and private power developers, and also by formulating public private partnerships. • Help creation of social and development infrastructure through hydropower development. Read more

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STATE ACTS AND POLICIES … (2/2)

Small Hydro Power (SHP) Policy 2007

Objective • Facilitate and promote growth of small hydropower plants through private participation, thereby increasing employment opportunities in the state.

Read more

North East Industrial and Investment Promotion Policy (NEIIPP) 2007

Objective • Promote the Northeast as an attractive investment region through concessions and incentives promoting growth in the region.

Read more

Agriculture Policy 2001

Objective • To promote advancement and high economic growth in the state and provide various job opportunities to the unemployed in rural regions by the means of agriculture as well as allied sectors. • To deal with various problems related with agriculture and provide some effective ways to repair them. Read more

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EXCHANGE RATES

Exchange rates (Fiscal Year)

Year INR equivalent of one US$

2004-05 44.81

2005-06 44.14

2006-07 45.14

2007-08 40.27

2008-09 46.14

2009-10 47.42

2010-11 45.62

2011-12 46.88

2012-13 54.31

2013-14 60.28

2014-15 60.28

2015-16 65.46

Source: Reserve Bank of India

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