Assam Economy & GDP Insights

Assam Economy & GDP

Assam has emerged as one of India's fastest-growing states, positioning itself as the third fastest-growing state with a remarkable 7.94% GDP growth rate at constant prices as of 2024-25. The state's economic transformation is reflected in its impressive Gross State Domestic Product (GSDP) trajectory, which reached ₹6.43 lakh crore in 2024-25 and is projected to surge to ₹7.42 lakh crore by 2025-26. This stellar performance significantly outpaces the national average, with Assam's nominal economic growth of 12.74% in 2024-25 surpassing India's 9.9% growth rate. The state has successfully increased its contribution to India's GDP from 1.65% in 2016-17 to 1.99% in 2024-25, while the per capita income has grown from ₹1,39,783 in 2023-24 to ₹1,54,222 in 2024-25.

Assam's GSDP Growth Trajectory: Demonstrating remarkable economic resilience and growth from 2016-2026

Economic Growth and GDP Trajectory

Remarkable Recovery and Sustained Growth

Assam's economic journey over the past decade demonstrates exceptional resilience and sustained growth momentum. The state's GSDP at current prices has nearly tripled from ₹2.54 lakh crore in 2016-17 to ₹6.43 lakh crore in 2024-25. Even during the challenging COVID-19 pandemic period in 2020-21, when the state experienced a -2.0% contraction, Assam demonstrated remarkable recovery with a spectacular 20.9% growth in 2021-22, followed by consistent double-digit growth rates of 16.7% in 2022-23 and 19.1% in 2023-24.

The state's real GSDP at constant prices has shown equally impressive performance, growing from ₹2.02 lakh crore in 2016-17 to ₹3.38 lakh crore in 2024-25, reflecting sustained economic expansion beyond inflationary effects. This consistent growth trajectory has positioned Assam among the top five fastest-growing states in India, with economic performance consistently outpacing the national average.

Per Capita Income Growth

Assam's per capita income growth reflects improving living standards and economic prosperity. The per capita income at current prices has increased by 10.3% from ₹1,39,783 in 2023-24 to ₹1,54,222 in 2024-25. At constant prices, the per capita income reached ₹81,127 in 2024-25, showing a growth of 6.8% over the previous year. While Assam's per capita income remains below the national average of ₹2,00,162, the growth rate demonstrates the state's commitment to reducing income disparities and improving economic welfare.

Sectoral Analysis and Economic Structure

Diversified Economic Base

Assam's economy exhibits a well-balanced sectoral composition that has evolved significantly over the years. In 2023-24, the services sector emerged as the dominant contributor, accounting for 46% of the state's GSDP, followed by the primary sector (agriculture and allied activities) at 35%, and the secondary sector (industry) at 19%.

Assam's Economic Structure: Sectoral distribution of GSDP in 2023-24 showing the dominance of services sector

The services sector has shown remarkable dynamism with a growth rate of 24.3% in 2023-24, making it the fastest-growing sector in the state economy. This growth has been driven by expansion in information technology, financial services, tourism, and transport sectors. The agriculture and allied sector, despite its traditional importance, registered a robust growth of 17% in 2023-24, significantly higher than the national agriculture sector growth. The industrial sector, while contributing 19% to GSDP, achieved a respectable growth rate of 10.2%.

Agriculture and Allied Sector Performance

Agriculture continues to play a vital role in Assam's economy, employing a significant portion of the population and contributing substantially to the state's food security. The sector's contribution of 35% to GSDP in 2023-24 far exceeds the national average contribution of agriculture to India's GDP, which stands at approximately 19%. This highlights Assam's strong agricultural base and the sector's continued importance in the state's economic structure.

The livestock sector has emerged as a significant contributor within the primary sector, with its contribution to the state's GSDP at current prices reaching ₹11,222 crore in 2022-23, showing a growth rate of 16.18% over the previous year. The forestry sector also plays a crucial role, with Assam's recorded forest area covering 26,836 square kilometers, which represents 34.21% of the total geographical area.

Key Industries and Emerging Sectors

Tea Industry: Global Leadership and Economic Impact

Assam maintains its position as the world's largest tea-producing region, contributing approximately 50.6% of India's total tea output. In 2024, Assam produced 649.84 million kilograms of tea, despite facing challenges from adverse weather conditions including heatwaves and flooding. The production represents a decline from 688.33 million kg in 2023, primarily attributed to climate change impacts and extreme weather events.

Tea pickers harvesting leaves in an Assam tea garden highlighting the region's prominent tea production industry

The tea industry contributes nearly 5% of Assam's GSDP and plays a crucial role in both the state's and national economy. The industry encompasses 783 big tea gardens and 1.18 lakh small tea gardens, employing over 7.33 lakh workers in big tea gardens and approximately 3 lakh workers in small tea gardens. The sector has shown significant transformation over the past decades, with tea production increasing by 78.24% since 1990, while the area under tea cultivation expanded by 46.19%.

The average yield per hectare has improved to 1,884 kg in 2024, though it remains below the peak levels achieved in previous years. The industry's export significance is substantial, with Assam tea holding a Geographical Indication (GI) tag and commanding premium prices in international markets including Russia, Iran, United Arab Emirates, UK, and USA.

Oil and Natural Gas Sector: Strategic Energy Hub

Assam's petroleum sector stands as a cornerstone of the state's industrial economy, with the state contributing 15% of India's crude oil production and 14% of the country's natural gas output. The state produced 4,361 thousand metric tonnes (TMT) of crude oil in 2023-24, ranking as the third-largest crude oil producing state in India after Rajasthan and Gujarat.

Industrial view of a petroleum refinery complex, representing Assam's oil sector infrastructure

The historic Digboi oil refinery, known as Asia's first oil refinery, symbolizes Assam's pioneering role in India's petroleum industry. Over the past three financial years (2021-22 to 2023-24), Assam contributed 12,518 TMT to India's total crude oil output of 88,223 TMT. The royalty contributions from crude oil production for the period 2019-20 to 2022-23 amounted to ₹19,291.17 crore, while royalties from natural gas totaled ₹1,851.12 crore.

Recent developments in the sector include significant investments in expansion projects such as the Numaligarh Refinery Expansion Project, the North East Gas Grid, and the Paradip-Numaligarh Crude Pipeline. Vedanta Ltd's Cairn Oil & Gas has commenced test production from its Hazarigaon field, becoming the first company in northeast India to start gas flow from a Discovered Small Field (DSF) block.

Handicrafts and Traditional Industries

Assam's handicrafts sector represents a unique blend of cultural heritage and economic opportunity, with immense potential for employment generation and rural development. The sector encompasses traditional crafts including bamboo and cane work, silk weaving, pottery, bell metal and brass work, woodcarving, and mask making.

Artisan weaving traditional bamboo and cane handicrafts, showcasing Assam's rich craft industry 

The Assam Handicraft Policy 2022 outlines a comprehensive framework for sector development, with objectives including improving artisan socio-economic conditions, facilitating craft-based business growth, and providing market linkages. The policy emphasizes the creation of Raw Material Banks, design development programs, and export villages to enhance the sector's competitiveness.

Sericulture, particularly Muga silk production, represents Assam's monopoly in the global market, with the state producing approximately two-thirds of India's total non-mulberry silk output. The traditional silk industry has been practiced for centuries and continues to provide substantial employment opportunities, particularly for rural women.

Investment Climate and Policy Framework

Advantage Assam 2.0: Gateway to Northeast

The Advantage Assam 2.0 Investment and Infrastructure Summit 2025, held on February 25-26, 2025, represents the largest investment promotion initiative by the Government of Assam. The summit showcased Assam's strategic location as a gateway to Northeast India and Southeast Asia, highlighting investment opportunities across diverse sectors including infrastructure, energy, digital economy, IT, defense, aerospace, automobile manufacturing, healthcare, agriculture, and financial services.

PM Modi launches Advantage Assam 2.0 Summit 2025 focusing on investment and infrastructure development in Assam's key economic sector

The event attracted significant attention with the participation of Prime Minister Narendra Modi, who emphasized Assam's transformation into a leading investment destination. The summit demonstrated Assam's ability to attract high-value investments, exemplified by the ₹27,000 crore OSAT project by TATA in Jagiroad, showcasing the state's capability to secure big-ticket investments.

Industrial and Investment Policy Framework

The Industrial and Investment Policy of Assam 2019 provides a comprehensive framework for attracting investments and promoting industrial growth. The policy offers substantial fiscal incentives including: 

• Capital Investment Subsidy: Up to 30% subsidy on plant and machinery value

• Interest Subsidy: 3-5% interest reimbursement on term loans for capital expenditure

• GST Reimbursement: SGST reimbursement for eligible units for 7 years

• Power Subsidy: Subsidies on power tariffs and electricity duty reimbursement

• Employment Generation Incentive: Up to ₹20,000 per employee for hiring local youth.

The Customized Industrial Investment Policy (Amendment) 2023 specifically targets mega investments (minimum ₹100 crores) with additional incentives including production-linked subsidies, land subsidies, and comprehensive government assistance for infrastructure development.

Startup Ecosystem Development

Assam's startup ecosystem has experienced significant growth through the Assam Startup initiative and the flagship incubation center Assam Startup – The Nest. The ecosystem has successfully incubated 50 startups in its first cohort, with top-performing startups recording more than 4x revenue growth during the incubation period.

The startup ecosystem has generated substantial economic impact, with incubated startups from Cohort 1.0 impacting approximately 3.2 lakh lives, employing 1,690 people, and generating indirect employment of 40,078. The total revenue generated by the startups reached ₹11 crore, demonstrating the sector's growing contribution to the state's economy.

The Hub & Spoke model initiated by Assam Startup has established collaborations with 18 universities and colleges across the state, creating a comprehensive network for identifying and nurturing entrepreneurial talent. The launch of the Assam Angels Network provides crucial funding support and mentorship for early-stage startups.

Infrastructure Development and Connectivity

Transportation and Logistics

Assam's strategic location as the gateway to Northeast India and Southeast Asia positions it as a crucial logistics hub. The state government has prioritized infrastructure development with capital expenditure surging from ₹2,951 crore in 2015-16 to a projected ₹24,964 crore in 2024-25. This massive expansion in developmental spending has positioned Assam as one of the top states in capital investment.

The development of industrial parks and logistics infrastructure includes the Bodoland Industrial Park, Bongaigaon Integrated Infrastructure Development Centre (IIDC), North East Mega Food Park (NEMFP) at Nalbari, and the Tea Park in Chaygaon, Kamrup. These facilities provide ready-to-use industrial infrastructure with comprehensive connectivity to highways, railways, and airports.

Digital Infrastructure and IT Sector

The digital economy sector has emerged as a significant growth driver, with the state government's emphasis on creating a robust digital infrastructure ecosystem. The Assam Startup Policy focuses on developing a Digital Startup Ecosystem through dedicated portals, apps, and online learning platforms. The establishment of Electronic Systems and Design Manufacturing (ESDM) innovation centers in key cities demonstrates the state's commitment to technology-driven growth.

Financial Performance and Fiscal Health

Revenue Growth and Management

Assam's financial performance reflects strong revenue growth and prudent fiscal management. The state's revenue receipts for 2024-25 are expected to reach approximately ₹1.11 trillion, though showing a decrease of 4.35% from the previous year. The state has demonstrated significant improvement in tax revenue collection from 2012-22 to 2023-24 due to various measures taken to augment tax resources.

The state has maintained a healthy debt-to-GDP ratio of 25%, well below concerning levels, while 17 profitable public sector undertakings (PSUs) contribute a collective net wealth of ₹40,000 crore. Additionally, the state holds ₹58,000 crore worth of assets that can be liquidated if necessary, providing financial flexibility for future investments.

Capital Expenditure and Investment

The dramatic increase in capital expenditure demonstrates Assam's commitment to infrastructure development and economic growth. The state has benefited significantly from the Scheme for Special Assistance to States for Capital Investment (SASCI), receiving ₹11,154.57 crore as 50-year interest-free loans specifically for capital sector investments. This funding has enabled the state to increase both absolute capital expenditure and the percentage of capital expenditure in total state expenditure.

Future Prospects and Challenges

Growth Projections and Targets

Assam's economic trajectory shows promising prospects with the state GSDP projected to reach ₹7.42 lakh crore by 2025-26, representing a growth of 15.2%. The real GSDP at constant prices is expected to reach ₹3.70 lakh crore by 2025-26. These projections reflect the state's confidence in maintaining high growth rates through continued policy reforms and strategic investments.

The state government has set ambitious targets for industrial development, aiming to transform Assam into a globally competitive investment destination. The focus on sectors such as agro-processing, textiles, IT & electronics, tourism, pharmaceuticals, and renewable energy provides a diversified foundation for sustainable growth.

Climate Change and Sustainability Challenges

Assam faces significant challenges from climate change, particularly affecting its key agricultural and tea sectors. The tea industry experienced production declines in 2024 due to adverse weather conditions, heatwaves, and flooding during crucial harvesting periods. Climate adaptation and resilience building have become critical priorities for sustaining long-term economic growth.

The state government has emphasized green industries, sustainable manufacturing, and environmental compliance through its industrial policies. Additional incentives are provided for units adopting renewable energy sources and eco-friendly technologies, promoting environmentally sustainable industrial development.

Skills Development and Human Capital

The development of skilled human capital remains crucial for Assam's continued economic growth. The government has initiated comprehensive skill development programs through the Assam Skill Development Mission (ASDM) and established public-private partnerships for industrial training institutes and polytechnics. The focus on creating a skilled workforce aligns with the state's industrial diversification objectives and investment attraction strategies.

Conclusion

Assam's remarkable economic transformation from a primarily agricultural economy to a diversified, high-growth state demonstrates the effectiveness of strategic policy interventions and investment promotion initiatives. With its impressive 7.94% GDP growth rate positioning it as India's third fastest-growing state, Assam has successfully established itself as a major economic hub in Northeast India.

The state's strategic advantages, including its position as a gateway to Southeast Asia, abundant natural resources, growing industrial base, and supportive policy environment, provide a strong foundation for sustained economic growth. The success of initiatives like Advantage Assam 2.0 and the thriving startup ecosystem indicates the state's readiness to embrace modern economic opportunities while preserving its traditional industries.

Moving forward, Assam's focus on infrastructure development, digital transformation, sustainable industrial practices, and human capital development positions it well to achieve its vision of becoming a globally competitive investment destination. The state's ability to maintain high growth rates while managing fiscal health and environmental sustainability will be crucial for long-term economic prosperity and inclusive development.

The convergence of traditional industries like tea and handicrafts with emerging sectors such as technology, renewable energy, and advanced manufacturing creates a unique economic ecosystem that leverages both heritage and innovation. As Assam continues its economic journey, the state's commitment to balanced regional development, environmental stewardship, and inclusive growth will determine its success in achieving sustainable prosperity for all its citizens.