Agriculture is the primary driver of the economy. Jhum, the local word for shifting cultivation, which was widely practised among the tribal groups has come to be less practiced.

The 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 sawmills, plywood (these two trades however have been stopped by law), rice mills, fruit preservation units and handloom handicrafts.