Assam accounts for 9% of jute production in the country but is yet to fully unlock its potential as a cash crop. The approval of the increased amount of Minimum Support Prices (MSP) of raw jute for marketing season 2025-26 by the Union Cabinet will provide the growers with a price cushion. Diversification of jute products in the state requires a stronger policy push to tap its potential optimally for generating a livelihood and reducing the dependence of jute growers on MSP for sustainability. The MSP of raw jute for the new marketing season has increased by Rs 315 per quintal over the previous marketing season and is fixed at Rs 5,650 per quintal. The government states that this increase would ensure a return of 66.8 percent over India’s weighted average cost of production. Under the MSP policy, the Jute Corporation of India (JCI) procures raw jute from registered growers without any quantitative limit. The central government reimburses any losses the JCI may incur during procurement. The central government continues its policy of making it mandatory to use 100% jute bags in foodgrain packaging and 20% in sugar packing under the Jute Packaging Materials Act (JPMA), 1987, which has helped jute mills to survive. The Department of Food and Public Distribution of the Central Government plans the procurement of jute bags for all the states before every procurement season after receipt of the requirement of jute bags from all the state procurement agencies, and the Food Corporation of India (FCI) and jute mills are issued orders for the supply of state-wise quantities. However, in case of any shortage or disruption in the supply of jute bags, the government may allow the dilution of packaging material up to a maximum of thirty percent. The FCI and state agencies together procure more than 80% of the total jute produced in the country. Official data also shows that while the total turnover of the jute is about Rs. 18,000 crore, the turnover for the jute sacking is to the tune of Rs. 12,000 crore, which is procured by the JCI. This, however, also speaks volumes about the vulnerability of the sector and growers as well, as they are primarily dependent on government procurement for sustainability, and withdrawal of the price support will have a cascading impact on jute growers and jute mills. The opportunity for large-scale commercial production of jute bags to replace plastic carry bags created by the ban on single-use plastic is yet to be realised, primarily because of the failure on the part of the government to enforce the ban. Jute, being a biodegradable natural fibre, is eco-friendly and easily renewable, while plastic is non-biodegradable and has given rise to serious environmental problems. Ironically, neither the government nor society has cared to prioritise jute bag use to replace plastic bags. Apart from its traditional and widespread use as packaging material, diversification of jute fibre in the modern textile industry, handloom products, upholstery, food packaging industry, soil conservation as geotextile, etc. A key challenge in diversification is growers being small and marginal, depending on market prices to decide on investment in expanding the area under the crop. When prices remain low, they are not keen to expand, resulting in the fluctuation of production. Any industrial unit requiring raw jute for processing to make diversified products faces this uncertainty in the availability of required stock. Besides, higher prices of raw jute also offset the financial calculations of a commercial processing unit, affecting its profitability. Such challenges can be overcome by increasing productivity, assured remunerative prices, and guaranteed procurement. Diversification of jute goods into fine yarns, and decorative fabrics requires superior-quality jute. The import of raw jute of superior quality from Bangladesh for manufacturing value-added jute products in India is a pointer to the tendency of jute growers and jute mills to primarily depend on government procurement and not realise the commercial potential of the crop in tapping the enlarged market of diversified jute products. Improving the implementation of the Jute ICARE (Improved Cultivation and Advanced Retting Exercise) scheme is crucial for improving the quality and productivity of raw jute cultivation in the state and the country and reducing the dependence of jute growers and traders on government MSP. The superior quality of jute produced in Bangladesh is attributed to improved washing of jute in flowing water, contrasted to the practice of washing in blocked waters in India. Traditional jute cultivation being a rain-fed cultivation, changing rainfall patterns and vanishing water bodies have brought new challenges in sustainability on account of climate change impact. Without assured irrigation ensuring steady commercial production of superior-quality jute, entrepreneurs will be reluctant to invest in diversified jute products due to uncertainty in the profitability of their business venture. The diversification of jute products can generate new avenues of livelihood in the state but can become a reality only through a stronger policy push.