Siddharth Roy
(siddharth001.roy@gmail.com)
Assam deserves attention beyond the state for its decision to treat agarwood as a potential economic engine, comparable in ambition to tea. Agar, or Aquilaria malaccensis, is not merely an aromatic tree. It anchors a value chain spanning cultivation, harvesting, distillation, perfumery, incense, cosmetics, exports and rural employment. If Assam can move this sector from opaque, middlemen-dominated trade to a transparent and globally compliant industry, it could create a model of green, high-value rural industrialisation.
The scale of the opportunity is substantial. A recent assessment by the Botanical Survey of India estimated about 11.44 crore agarwood plants above two years of age in Assam’s non-forest areas, concentrated in Golaghat, Jorhat, Sivasagar, Karimganj and Cachar. The state government has now said nearly two lakh hectares outside forests are under agar. Even allowing for differences in methodology, the message is clear: Assam possesses a resource base far larger than the formal export system currently captures.
The export figures highlight the potential that has not yet been fully realised. In January 2025, the Directorate General of Foreign Trade increased India’s annual export limit for plantation-grown agarwood chips, powder and sawdust from 25,000 kg to 151,080 kg, while the limit for agar oil rose from 1,500 kg to 7,050 kg. Assam received the overwhelming share: 119,400 kg of agarwood products and 5,560 kg of oil. Such quotas show the space for a legitimate export industry.
The breakthrough has already begun. In May of this year, Assam sent its first legally approved agarwood consignment to Saudi Arabia and the United Arab Emirates. Just 112 kg of chips fetched Rs 2.35 crore. The value should not be extrapolated to the sector, since quality and product form vary. The shipment nevertheless showed that legal, traceable agarwood can command extraordinary value.
Yet Assam’s challenge is not production. It is organisation. For decades, complicated regulations, weak market information and dependence on intermediaries encouraged informal trade. A recent national non-detriment A finding study noted that growers often struggled with certificates, CITES procedures and other formalities and therefore sold to informal traders. The study also recorded seizures of more than 1.25 tonnes of agarwood chips and six litres of oil or derivatives in India between 2017 and 2021. A market pushing cultivators towards illegality The market design is pushing cultivators towards illegality.
This is why the state’s promise to curb middlemen must be interpreted carefully. Middlemen are not inherently the problem. Aggregators, traders and processors provide finance, transport, grading and access to buyers. The problem arises when growers lack bargaining power and price discovery. The answer is not to eliminate intermediaries but to make the chain competitive and transparent. Farmer producer organisations, cooperatives, digital marketplaces, standardised grading and public price information can ensure that producers capture a larger share of final value.
Assam should now build an agarwood ecosystem rather than merely expand cultivation. The first priority should be traceability. Every plantation should be geo-referenced, registered and linked to a digital chain of custody. Certificates of origin and legal procurement should become faster, predictable and largely online. The Centre’s decision in 2026 to introduce an online Certificate of Origin module for agarwood exports on the Trade Connect platform is a useful step. Assam should integrate its plantation and forest-department systems with this architecture.
The second priority is value addition. Exporting raw chips will leave much of the value elsewhere. Assam should develop clusters for inoculation technology, oil extraction, distillation, perfume formulation, incense, cosmetics and laboratory testing. The difference between selling a commodity and selling a branded product is the difference between participating in a value chain and owning one. An Assam-origin “oud” brand, supported by geographical storytelling and rigorous quality certification, could carry the state’s name into Gulf, Southeast Asian and European markets.
Third, research must become central. Agarwood is formed when Aquilaria responds to injury and microbial attack, producing resin in its wood. Natural formation is unpredictable; artificial inoculation can make production more reliable. Research institutions, including the Rain Forest Research Institute in Jorhat, should work with farmers and industry on safer inoculants, yield prediction, disease management, genetic resources and quality testing. The objective must be higher productivity without compromising sustainability.
Sustainability cannot be an afterthought. Aquilaria malaccensis is listed in Appendix II of CITES, and international trade is therefore subject to controls. Assam’s opportunity rests principally on cultivated, legally traceable trees, not exploitation of remaining wild populations. Every expansion programme must protect wild genetic resources, prevent laundering of illegally sourced wood and maintain credible inventories. Otherwise, commercial success could undermine the ecological asset on which the industry depends.
The social dividend could be considerable. Agar cultivation is compatible with homesteads, farm boundaries and mixed land-use systems, allowing smallholders to diversify income without abandoning existing crops. Processing units can create jobs closer to villages, while nurseries, inoculation services, transport, packaging, testing and marketing can generate an extended rural enterprise network. For young people in Assam, agarwood cultivation could create opportunities in agriculture, biotechnology, manufacturing and international trade.
Tea transformed Assam by eventually connecting cultivation to processing, infrastructure, markets, branding, and global commerce. Agarwood need not imitate tea’s history; it should learn from its value-chain logic. The State should measure success not by trees planted but by farmer incomes, legal exports, processing capacity, product quality, jobs and the share of value retained in Assam.
The agarwood opportunity is larger than a new export commodity. Done well, it can become a bridge between Assam’s biological wealth and a modern rural economy. Assam has trees, traditional knowledge and a growing international market. What it now needs is institutional trust, transparent trade and investment. Assam should seek an agarwood boom. But the real test will be whether the farmer who grows the tree shares in the wealth that its fragrance creates.