This paper describes the development of a compact design torque sensor using optical technique and its fabrication for wearable robot. The torque generated can only be measured by placing a torque sensor on each joint, which makes the joint bulky and heavy adding extra load to be carried by robot. In this paper, we propose a compact and light weight design for the torque sensor. This sensor can measure torque of robot's links by detecting torsion. The optical technique is used to detect angular displacement in the joints. As optical technique is immune to electromagnetic interference, light weight, and it also required simple electronics. The torque can be calculated by using torque and twist-angle relation. The proposed design is simulated by FEM software (ANSYS), and it shows successful measurements of the torque with a load capacity of 100 Nm, which is sufficient for the torque generated in wearable robot's joints. The designed optical torque sensor is manufactured by EDM (Electrical Discharge Machining). The optical torque sensor is calibrated and several experiments (linearity, repeatability, accuracy and time response) are conducted to ensure its feasibility with the wearable robot. In the end, the optical torque sensor is compared with the commercially available high cost torque sensor of the wearable robot.