Arunachal Pradesh which translates to the “land of dawn-lit mountains”, is also known as the orchid state of India or the paradise of the botanists. The state is blessed with over 500 species of medicinal plants, which has a huge potential for enhancing the economy of the state. Due to its wide range of agro climate condition from sub-tropical to temperate and alpine, the state is endowed with various sorts of fruits, vegetables and other agro-products, and has the potential to be the sunrise zone for food processing industry and other agri-businesses.The present paper deals with enormous potential in food processing in the region. The region enjoyed a unique advantage of growing temperate fruits and horticultural crops. Temperate fruits viz. Apple, kiwi, plum, pear, banana ,pineapple, orange ,kennow, mandarin etc. which are grown on small scale semi commercially but it has the vast potential in term of its favorable climate condition, which gives it, a great scope for expansion of area for temperate fruits production. And with simple value addition of cleaning, sorting and packaging, can increase the income of the farmers to a great extent. But due to lack of infrastructure facilities like poor connectivity with national and international market, inadequate supply chain and poor power supply, is hindering the development of food processing sector in the state, this is where we need to introduce cluster processing industry to utilize the natural resources efficiently and to address the problem of small and marginal farmers of the state. Cluster processing industry is a concept in which an agriculture produce processing unit will be established in the centre of the cluster of villages. It may be based on cotton, groundnut, wheat, paddy, castor, sugarcane, etc. This will bring the processing to the doorstep of the farmers, which will help farmers realize better income for their product and it will also keep a check on the price of perishables and reduce the wastage and in this process simultaneously common infrastructure are also created along with the processing units.

KEYWORDS: Cluster, Agriculture Processing Units, Temperate Fruits, Prospect in Arunachal Pradesh.