Present study attempts to examine the growth and prospects of agro-processing industries in Punjab in the post liberalization period. Punjab that used to perform reasonably well in terms of industrialization, few years back, is today facing the industrial crunch owing to obvious reasons. Keeping present trends in mind, the state needs to emulate the growth path adopted by China, explicitly, wherein thrust to development had been on the manufacturing sector. With availability of food grain production round the year, it seems viable also in the state to develop the agro processing industries. In fact, researchers have pointed out that Punjab’s agriculture has reached a stage where its sustainability is in doubt. If such apprehensions turn out to be true, then future of masses will also land in darkness. Development of agro-processing industries at this juncture, are perceived to be the stimulator that can revamp the vanished glory of the state. The study is an attempt made through empirical framework to find out the conditions for the development of agro-processing industries in the state.