Editorial

Tapping Arunachal’s export potential

The Arunachal Pradesh government’s vision to transform the state from a producer state to an export-orientated economy is a strategic initiative and timely step in the right direction.

Sentinel Digital Desk

The Arunachal Pradesh government’s vision to transform the state from a producer state to an export-orientated economy is a strategic initiative and timely step in the right direction. The confidence of the Pema Khandu-led government to pursue this strategic shift appears rooted in substantial and spectacular development in infrastructure and connectivity – road, rail, air and digital – in the state. Participation of producers, exporters, investors and buyers from across the country and abroad in a two-day Arunachal Pradesh Reverse Buyer-Seller Meet held under the aegis of the Indian Chamber of Commerce (ICC) in collaboration with the state’s Trade and Commerce department has signalled increasing visibility of the infrastructure developments and business potential of the border state in domestic and international trade and commerce circles. The challenge, however, lies in ensuring that the government departments and agencies follow up on the suggestions and recommendations from such meetings so that the intent is converted to achievable outcomes. Unlike traditional buyer-seller meets in which the approach adopted by the seller is to travel to international markets to showcase their product, the reverse buyer-seller meet facilitates international buyers travelling to India and meeting producers directly to explore trade and commerce potential. ICC promoting Arunachal Pradesh as a new hub of organic, natural, and value-driven products, as acknowledged by Chief Minister Khandu in his inaugural address at the meet, acted as a catalyst for the interest among domestic and global investors. An International Conclave-cum-Buyer Seller Meet held earlier in Tawang connected over 350 farmers and 50 Farmer Producer Organizations (FPOs) in the state with global buyers and led to opening export channels for oranges and pumpkins to Gulf nations. The “Arunachal Pradesh Industrial Development and Investment Policy, 2025” underscores the importance of infrastructure in building the required ecosystem for increased investment inflow. The policy emphasises that the availability of quality infrastructure enables industries to establish operations with lower capital investment and function efficiently without disruptions. The Government of Arunachal Pradesh aims to prioritise the development of essential infrastructure to create a favourable investment climate, it adds. The policy has also spelt out incentives for export industrial units (new units and existing units irrespective of substantial expansion) for the export of finished goods from Arunachal Pradesh to a destination anywhere outside of India. It allows registered export units to seek 60% reimbursement of transportation cost up to the international port (air or sea) within the country, subject to a maximum amount of Rs. 5 Lakh per year per unit for a maximum period of five years. Besides, reimbursement of costs incurred for shipment of export samples to an overseas buyer (outside of India), capped at Rs. 50,000 per enterprise per year for two years, is an additional policy incentive to industrial units registered as export units in reflection of the policy push for export promotion in the state and facilitates global market access to local industries. The institutional purchases of local products by the Indo-Tibetan Border Police (ITBP) and the Indian Army have created institutional markets for farmers and strengthened the rural economy in the state, which, as noted by the Chief Minister, is a strong foundational base to scale up export-orientated production. The Arunachal Pradesh government strongly believes that diverse organic produce, from kiwis and mandarin oranges to large cardamom, ginger, and pineapple, can make the state a key contributor to India’s export basket. The transition from a producer state to an export-orientated economy, however, hinges on securing consistent return orders from global buyers. The euphoria over the initial export market breakthrough often evaporates in the Northeast region, as overlooking important factors like quality control, packaging, clear labelling, etc., poses hurdles in securing a repeat order and building a sustained trade relationship with international buyers. Availability of power in Arunachal Pradesh at the most competitive rates in the region provides it an edge in attracting investors, but mega hydropower projects posing a threat to the fragile ecology of the state are a critical challenge in sustainable hydropower production that cannot be overlooked. Incentivising export-orientated production in the industrial policy and buyer-seller meetings alone cannot guarantee an export boost in the state if the primary stakeholders – the producers – are not empowered through adequate training, infrastructure support and market access. Unless the producers are motivated to transform subsistence production to commercial-scale production to tap domestic and export markets, the targets will remain on paper, limiting the state’s export ambition at the aspirational level. Nevertheless, the state exploring the possibility of opening of trade routes with Bhutan and Myanmar indicates the priorities laid for export-orientated growth and a focused effort to leverage the Act East policy to achieve regional economic integration. Improving connectivity in the border state, particularly in rural areas endowed with rich biodiversity and beautiful natural landscapes, has a double advantage – it also unlocks the tourism potential of the state, with improved infrastructure beckoning both investors and tourists.