The economy of Arunachal Pradesh is mainly sourced by Agriculture. The state's agrarian economy is sponsored by cultivation of rice, maize, millet, wheat, pulses, sugarcane, ginger, and oilseeds. The soil of Arunachal Pradesh is also appropriate for horticulture and fruit orchards. Amongst fruits grown here, the major ones are pineapple, orange, lemon, plum, pear, cherries, and peaches. Jhum, the local term for shifting cultivation, which was extensively practiced by tribal groups, is now less practiced.
The forest-products are the second most important source of economy. Since Arunachal Pradesh is densely covered with forests; wood, teak & ply play a major role in state's proceeds. Its main industries are sawmills, plywood mills (though stated illegal by the state government), rice mills, fruit preservation units, and handloom handicrafts. Tourism is another considerable source of business in Arunachal Pradesh owing to its picturesque locales. Since 1980, the gross state domestic product of Arunachal Pradesh has been steadily increasing and in 2004, it crossed the mark of $706 million.