In recent years, the process of rural industrialization has become a significant way for achieving balanced regional development, job creation, poverty reduction and economic diversification in rural regions. Rural industrialisation is an important component in rural transformation in Arunachal Pradesh, a mainly agrarian and tribal state in which the traditional occupation of people is agriculture and the lack of non-farm jobs is a serious concern. The state has rich natural resources of bamboo, cane, forests products, medicinal plants, horticulture and traditional handicrafts which can build a solid foundation for rural industry. This article aims to explore the trends, growth pattern, opportunity and challenges in the process of rural industrialization in Arunachal Pradesh. Secondary data gathered from government reports, research articles and policy documents were used for the study. The results show that the rate of industrialisation is rather low, but the growth of Micro, Small and Medium Enterprises (MSMEs), agro-based industries, handicrafts, handloom activities and village enterprises has played a significant role in the economic development of rural areas. Nevertheless, infrastructural limitations, market constraints, lack of adequate finance and technological constraints are still a major constraint in growth of the sector. The study finds that if enabled by proper policy, institutional, technological and market integration measures, sustainable rural industrialization can be a game-changer in the economic development of Arunachal Pradesh.