Agarwal was rescued in a healthy condition from the jungle at Maldang late last night after the encounter between a joint police team and NDFB rebels in which four police personnel were injured.
Among the injured was Sonitpur Superintendent of Police P Kalita, who sustained minor injuries when splinters of a grenade hurled by the rebels hit him, the police said.
A joint police team from Assam and Arunachal Pradesh under the supervision of Assam ADGP A P Rawat had launched the operation at Maldang area near Bhalukpong in the Assam-Arunachal boundary last night, the police said.
Agarwal, who was the project head of Twang hydro power project, was kidnapped on September 21 last by militants of the Sangbojit faction of NDFB, when he was on way to Guwahati.
Four motorcycle-borne insurgents had intercepted his vehicle at Charduar in Sonitpur district of Assam and took him away leaving his vehicle and the driver.
A rescue operation was launched immediately after his abduction and his driver was arrested.
The rebel outfit had demanded Rs 20 crore as ransom, the police said.