The Centre has announced targeted support for agar (agarwood) tree cultivation in Assam and the wider Northeastern region, aiming to diversify farm output, raise agricultural productivity, increase farmers’ incomes, and generate new employment opportunities.

Making the announcement during her Union Budget speech on Sunday, February 1, Finance Minister Nirmala Sitharaman said the government would extend support to high-value crops across different regions of the country. “We will support high value crops such as coconut, sandalwood, cocoa and cashew in our coastal areas. Agar trees in North East and nuts such as almonds, walnuts and pine nuts in our hilly regions will also be supported,” she stated.

Agarwood is a rare, fragrant, and resinous wood formed in the heartwood of Aquilaria species when the tree develops a fungal infection and produces resin as a natural defence mechanism. This resin is among the world’s most valuable natural products—used as incense in the Middle East, distilled into oud for luxury perfumery and wellness products in Western markets, and prized for traditional medicinal uses across Southeast Asia. Depending on quality, agarwood can command prices comparable to, or even exceeding, that of gold.

In India, the Northeastern Region (NER) accounts for more than 96 per cent of the country’s agarwood trees. The resource base is currently concentrated in Assam (around 81 per cent) and Tripura (about 11 per cent), which together form the backbone of India’s agarwood plantations and production. Other Northeastern states—including Manipur, Nagaland, Meghalaya, Arunachal Pradesh, Mizoram, and Sikkim—are also emerging as important contributors, supported by expanding plantations and focused state-level initiatives.

Despite the region’s dominance in agarwood resources, the sector has largely remained informal, relying heavily on traditional cultivation and extraction practices. Industry observers believe that structured government support could help formalise the sector, improve value addition, ensure sustainable harvesting, and strengthen India’s position in the global agarwood trade.

The Budget announcement has been welcomed by farmers and stakeholders in the Northeast, who see agarwood cultivation as a high-potential avenue for income generation and rural employment. With policy backing now in place, the move is expected to unlock the economic potential of one of the region’s most valuable natural assets.