Andaman Nicobar Islands Economy

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Agriculture, industry and tourism are the main sources of the economy of the islands of Andaman and Nicobar. The Union Territory of Andaman and Nicobar are a part of the Bay of Bengal islands. The territory compromises of two groups of islands, the Andaman and Nicobar islands. Port Blair is the capital of the territory. As of the census of 2001, the population accounts to 379,944.

Economy of Andaman and Nicobar Islands

The economy of the Union Territory is mainly centred on agriculture, which depends on the cultivation of various fruits and crops, few industries mostly of them are small scale and handicrafts and to some extent the tourism. Also fishing and farming contribute to an extent to Andaman and Nicobar's economy.


The natives of the island mainly depend on agriculture as much as the whole of India does. Land occupying an area of 48,675 hectares of the territory of Andaman and Nicobar is used for agricultural purpose. The major food crop of the Andaman region is paddy while cash crops like coconut and areca nut are the main crops cultivated in Nicobar Islands. Oilseed, pulses and vegetables are the major field crops cultivated in Andaman & Nicobar Islands.

A variety of fruit types as sapota, banana, mango, orange, pineapple, papaya and root crops are cultivated in the region. Clove, cinnamon, pepper, nutmeg etc are grown under the multi-tier cropping system and red oil, cashew, rubber and palm are also cultivated in a limited manner in the islands.

Industries in the region

The Andaman and Nicobar Islands are industrially classified into the category "A" backward area. The administration's policy stresses on developing industries which are based on the raw materials available from local resources and thus generate higher employment opportunities.

Several small scale industries have a major share in the trade and economy of the Union Territory of Andaman and Nicobar. Over the last two decades, the growth in the industry sector has been pretty poor due to problems in logistics division, poor availability of raw materials and non-availability of local markets. There are approximately 1,531 small scale units and handicraft industries in the region with remarkable development in the agro-processing sectors where there are various upcoming units in the export arena. The small scale industries in the region account mainly for the production of paints and varnishes, polythene bags, fibre glass, PVC conduit pipes and fittings, soft drinks, beverages etc. The handicraft industries mainly manufacture wood and shell based handicrafts.

For growth of the civil supplies, tourism, and other industries, a body named Andaman and Nicobar Integrated Development Corporation (ANIIDCO) is responsible. The Oil and Natural Gas Commission is working in the region of oil and gas exploration.

Current Status of the industry in Andaman & Nicobar Islands

  • Currently there are no large scale industries in the region.

  • Presently twelve 100% EOU and nine IEMS have filed their application with SIA, New Delhi. Two 100% EOUs namely. M/s Islander Marine Products which is in the private sector and the other which is a joint venture with the Government namely M/s Andaman Fisheries are currently functioning. M/S Andaman Fisheries is involved in the export of fish, as frozen fish, shrimps or prawns etc.

  • Another private industry in the power sector is M/s Surya Chakra Power Corporation which amounts to 20MW power generation

Areas for Industrial Development in Region

The sectors that have been recognized for Industrial Development in the territory of Andaman and Nicobar are enlisted below:
  • Tourism
  • I.T.
  • Handicrafts
  • High value added products
  • Fisheries
  • Coir
  • Hydro Carbon Energy
  • Shipping sectors including transhipment ports
  • Service industry

Tourism Industry

This industry plays a significant role for developing the economy of the region as the territory has emerged as a prime tourism destination. Beautiful beaches, incredible islands and facilities to enjoy adventure sports make the islands a favourite spot among the tourists.

One of the most popular places in the town of Port Blair, the capital of the Union Territory, is the Aberdeen Bazaar, which has been constructed entirely of wood. The most popular places to visit are Cellular Jail, Gandhi Park, Anthropological Museum, and Fisheries Museum etc. The beautiful sandy beaches and the coral reef are a must see.

Eco- Tourism

92% of the area of the region is covered with forests. The territory has as many as 96 wildlife sanctuaries and 6 national parks. 110 species of wild orchids, 120 species of fish, 179 species of corals and 246 types of birds can be found in the islands.

Another major attraction in the islands of Andaman and Nicobar islands are the wide options for adventure water sports as snorkelling, scuba diving, game fishing, and many other water sports.

Macro-economic trend

Figures (in millions of Indian Rupees) of the gross state domestic product of the Union Territory show an increasing trend since the last two to three decades. For instance, the gross state domestic product for the year 2000 cane out to be 6,750 while figures of the year 2005 accounted to 13,130.

Last Updated on 6/29/2011