The central government announcing increased minimum support prices (MSP) of raw jute for the marketing season 2026-27 brings an opportunity for Assam to fully unlock the economic potential of the golden fibre. Increasing the productivity of jute grown in the state to raise it at least to the national average is critical for the desired transformation. The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, approved an MSP of raw jute at Rs. 5925 per quintal for 2026-27, which is an increase of Rs. 275 per quintal over the previous marketing season 2025-26. The substantial increase in MSP amount paid to jute-growing farmers during the past decade is indicative of the growth in the sector. Under the Jute Packaging Material (Compulsory Use in Packing Commodities) Act 1987, the government extends support to the jute industry through the procurement of jute bags for the packaging of food grains. As this constitutes 80% of total production of the jute industry in the country, commercial sustainability of jute mills calls for rapid diversification of products to absorb shocks of any policy change in mandatory jute packaging or reduction of quantity of subsidised rice under various food security measures. For farmers to benefit from the MSP, it is important that the demand of the mills for raw jute either remains steady or increases. Due to the overdependence of the mills on government purchases of jute bags, the mills can go for higher procurement of jute at MSP when farmers grow more, only if the demand for bags also remains steady or increases proportionately. Business management of the mills plays a crucial role in the growth of the industry, and mismanagement leads to the closure of mills, which ultimately affects jute farmers. The Prime Minister Garib Kalyan Anna Yojana, under which free rice is distributed to over 80 crore beneficiaries, is the single biggest driver of jute production and procurement of raw jute at MSP. This implies that if this flagship scheme is discontinued or significantly scaled down when the government finds that the support is no longer necessary to certain sections of beneficiaries due to improved economic conditions, the demand for jute bags placed by the government will drastically reduce. The fall in demand for jute bags will also affect the commercial viability of weaker mills unless they build capacity to tap into alternative markets of diversified jute products. It is in this context that the Market Development & Promotion Scheme and the Jute Diversification Scheme under the National Jute Development Program (NJDP) for the promotion of jute-diversified products remain critical for the overall sustainability of the jute industry in the country and major jute-producing states like Assam, West Bengal and Bihar. Apart from the NJDP scheme, the Capital Subsidy for Acquisition of Plant & Machinery Scheme, Jute Resource cum Production Centre, Jute Raw Material Bank & Production Linked Incentive schemes support jute artisans, manufacturers, and exporters to enhance production and competitiveness. Improving the quality of raw jute is pivotal for farmers to tap the commercial market of diversified products and reduce dependency on subsidised food grain schemes. Due to non-scientific farming practices and the non-availability of suitable retting facilities, the quality of jute grown in the traditional cultivation practice is mostly of middle grade. The traditional jute growers adopting modern agronomic practices, including quality seeds, improved sowing, weeding and retting, can ensure the production of high-quality fibre and also boost production. It has been scientifically demonstrated under the Jute-Improved Cultivation and Advanced Retting Exercise (Jute-ICARE) scheme that interventions like mechanised jute farming, such as the use of seed drills for line sowing instead of the traditional broadcasting method, enhance germination uniformity, increase yield by about 10-15% and reduce labour cost for thinning and weeding. Another important component of the ICARE scheme is the distribution of certified seeds to ensure genetic purity, improving fibre quality and crop resilience to withstand climate change impact. The The Jute Corporation of India claims that mechanised jute farming can reduce production costs by at least Rs 8,000 to Rs 10,000 per hectare, while improved fibre quality and higher yields augment the farmer’s income. Even though Assam is the second largest jute-producing state in the country after West Bengal, the adoption of mechanised farming and modern agronomic practices to replace traditional cultivation methods is a challenging task, as the majority of jute growers are small and marginal farmers. Assam prioritising ICARE scheme implementation among traditional jute growers and the central government increasing fund allocation is essential for upscaling production through distribution of seed drills, weeder machines, increased distribution of high-quality certified seeds, and construction of retting ponds. The state producing a higher yield of quality jute fibre is of paramount importance for the diversification of jute products, such as textiles, eco-friendly shopping bags, and home décor items. The market of diversified products is steadily growing in Assam, and tapping this opportunity through MSMEs can fully unlock its jute economy.