In India's northeastern forests, agarwood—known as oud or eaglewood—is emerging as a high-value commodity with transformative potential for the nation's economy and rural farmers. Drawing from the National Development Framework (NDF) in the Agarwood India book, a key resource on sustainable cultivation, and projections for India's Budget 2026, this analysis explores how the sector could drive growth, while highlighting farmer empowerment and economic opportunities.
Agarwood, derived from fungus-infected Aquilaria trees, is prized for its aromatic resin used in perfumes, incense, and medicine. It estimates India's current output at ₹500 crore annually, with potential to reach ₹5,000 crore by 2030 through 10,000 hectares of plantations in states like Assam, Tripura, Sikkim, West Bengal and Meghalaya. It emphasizes ethical farming techniques, such as artificial inoculation, to boost production without harming biodiversity, positioning India as a global leader in sustainable sourcing.
For farmers, agarwood offers lucrative prospects. The NDF details how the crop, with a 10-15 year maturation period, can yield over ₹1 lakh per hectare yearly, far surpassing traditional crops. Pilot projects in Assam have shown 200-300% income increases via integrated farming with tea or bamboo, enhancing resilience against climate risks. This aligns with India's inclusive development goals, potentially reducing poverty in high-migration regions and supporting food security through agroforestry.
Budget 2026 projections, building on prior agricultural allocations like the ₹2.5 lakh crore in 2023, could accelerate this growth. It advocates for ₹100-200 crore in subsidies, tax breaks for exporters, and research funding for processing hubs. Such measures might elevate India's share in the $12 billion global market, adding 0.5-1% to GDP and creating green jobs. However, challenges include regulatory barriers under the Forest Conservation Act and competition from synthetics or illegal harvesting.
Analytically, agarwood's success depends on policy execution and sustainability. While the NDF's data-driven strategies promise scalability, past budgets have seen fund underutilization. If realized, India's agarwood push could redefine rural prosperity, blending economic gains with environmental stewardship in a bioeconomy era.
