Arunachal Pradesh’s gross state domestic product was estimated at US$706 million at current prices in 2004 and USD 1.75 billion at current prices in 2012. Agriculture primarily drives the economy. Jhum, the local word for a shifting cultivation widely practised among the tribal groups, is now less practised. Arunachal Pradesh has close to 61,000 square kilometres of forests, and forest products are the next most significant sector of the economy.
Among the crops grown here are rice, maize, millet, wheat, pulses, sugarcane, ginger, and oilseeds. Arunachal is also ideal for horticulture and fruit orchards. Its major industries are rice mills, fruit preservation units, and handloom handicrafts. Sawmills and plywood trades are prohibited under law.
Arunachal Pradesh accounts for a large percentage of India’s untapped potential of producing hydroelectric power. In 2008, the government of Arunachal Pradesh state signed deals with various companies planning some 42 hydroelectric schemes that will produce electricity in excess of 27,000 MW. Construction of the Upper Siang Hydroelectric Project, which is expected to generate between 10,000 to 12,000 MW, began in April 2009.