Bhubaneswar: The Centre has announced targeted support for agarwood cultivation in Assam and other North Eastern states, aiming to diversify farm outputs, enhance productivity, increase farmers’ incomes, and generate new employment opportunities in the region.
Making the announcement in her Union Budget speech on Sunday, February 1, Finance Minister Nirmala Sitharaman said the government would promote high-value crops across different geographies.
“We will support high value crops such as coconut, sandalwood, cocoa and cashew in our coastal areas. Agar trees in the North East and nuts such as almonds, walnuts and pine nuts in our hilly regions will also be supported,” she said.
High-Value Agarwood Sector
Agarwood is a fragrant, resinous wood produced in Aquilaria species when the tree undergoes fungal infection and secretes resin as a natural defence mechanism. The resin is among the most valuable natural products globally, used as incense in the Middle East, distilled into oud for luxury perfumery and wellness markets in the West, and valued for traditional medicinal applications in South-East Asia. Depending on quality, agarwood can command prices comparable to or even exceeding gold.
North East’s Strategic Dominance
India’s North Eastern Region (NER) accounts for over 96 per cent of the country’s agarwood trees. Assam alone holds around 81 per cent of the resource base, followed by Tripura with 11 per cent, making the two states the core of India’s agarwood production ecosystem.
Other states including Manipur, Nagaland, Meghalaya, Arunachal Pradesh, Mizoram, and Sikkim are also emerging as significant contributors, with expanding plantations driven by state-level initiatives and policy support.
Informal Sector, Untapped Potential
Despite India’s dominance in agarwood resources, the sector has largely remained informal, characterised by traditional cultivation and processing practices, limited value addition, and weak market linkages. Experts say formal support through policy intervention, quality certification, scientific cultivation methods, and organised marketing could significantly increase farmer earnings and export potential.
The Budget announcement is expected to pave the way for structured development of the agarwood value chain, integrating farmers, processors, and global markets, while positioning the North East as a hub for high-value agro-forestry products.
-OdishaAge
