Guwahati: The Assam Cabinet has formed a three-member ministerial committee to streamline the Agar business in the state. This move aims to ensure better returns for those involved in the sector, thereby positively impacting livelihoods and employment across Assam.
The committee, comprising Ministers Pijush Hazarika, Bimal Borah, and Jayanta Mallabaruah, will engage with various stakeholders and the Government of India. Their mandate is to submit a comprehensive report with recommendations to enhance the profitability and sustainability of the Agar industry, which holds significant economic potential for the state.
What was announced
The Assam Cabinet, during a meeting held on July 5, 2026, approved the formation of a dedicated ministerial committee for the Agar business. Chief Minister Himanta Biswa Sarma announced the decision, highlighting the government’s commitment to supporting the crucial agro-forest sector.
The newly constituted committee includes Minister for Agriculture, Irrigation, and Parliamentary Affairs, Pijush Hazarika; Minister for Cultural Affairs, Industries, Commerce & Public Enterprises, and Act East Policy Affairs, Bimal Borah; and Minister for Finance, Environment & Forest, and Mines & Minerals, Jayanta Mallabaruah. The Industries, Agriculture, and Forest departments are expected to collaborate under this committee’s guidance to maximise benefits for local farmers and entrepreneurs.
Why it matters
The formation of this committee is a significant step towards formalising and optimising Assam’s Agarwood industry, often referred to as “liquid gold” due to its high value. Agarwood, locally known as ‘Xasi’ or ‘Sanchi’, is a highly sought-after aromatic resinous wood used in luxury perfumes, incense, cosmetics, and traditional medicine, particularly in the Middle East, Europe, and Southeast Asia.
Assam-grown agarwood is prized for its superior quality, rich aroma, and high oil content, giving the state a competitive edge in international markets. Industry stakeholders believe that an organised sector could generate substantial opportunities for farmers, nursery owners, distillation units, traders, and small enterprises across Assam and the wider Northeast. Experts suggest the agarwood industry has the potential to generate up to Rs 50,000 crore in annual revenue for Assam if cultivation, processing, and exports are scaled up in an organised manner.
The sector is a vital source of livelihood, with more than 50,000 workers directly involved in the business and another 1.5 lakh benefiting indirectly. A study conducted in 2022 revealed that an initial investment of INR 100 in agarwood cultivation yields a net benefit of INR 623, indicating high returns for cultivators. This initiative aims to address existing challenges such as over-exploitation, illegal trading, and market access restrictions, ensuring fair returns for growers.
Background
Agarwood has a rich history in Assam, believed to be its origin point in India. The Aquilaria malaccensis species, native to Assam and parts of Northeast India, has been cultivated in home gardens for generations. Historically, agarwood was used in religious rituals, medicinal purposes, and as a fragrant paste.
However, unsustainable harvesting practices led to the depletion of natural agarwood populations, classifying Aquilaria malaccensis as critically endangered by the IUCN and listed under Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) since 1995. This listing imposed restrictions on its international trade to ensure sustainable utilisation.
Recognising the economic potential and the need for sustainable practices, the Assam government notified “The Assam Agarwood Promotion Policy 2020”. This policy aimed to legalise and regulate cultivation, processing, and export of agarwood, creating a transparent and farmer-friendly ecosystem. It also sought to promote research on sustainable harvesting and cultivation practices, including artificial inoculation to stimulate resin production.
The Central Government has also taken steps to promote sustainable agarwood plantation and trade. In January 2025, the Directorate General of Foreign Trade (DGFT) amended the export policy for agarwood chips, powder, and oil, increasing annual export limits for artificially propagated sources. The annual limit for agarwood chips and powder was raised to 1,51,080 kg per annum and for agar oil to 7,050 kg per annum for the financial years 2024-25 to 2026-27. These exports require a certificate of origin from the state forest department, confirming the plantation is registered.
In May 2026, Assam achieved a significant milestone by making its first legal export of agarwood chips to Saudi Arabia and the UAE, valued at Rs 2.35 crore. This consignment, comprising 100 kg of chips to Saudi Arabia and 12 kg to the UAE, was dispatched with all statutory clearances, including a CITES permit and a restricted export licence from DGFT.
Key details
The three-member ministerial committee is tasked with engaging directly with agar farmers, businessmen, and other stakeholders within the state. Furthermore, the committee will interact with the Government of India to align state policies with national regulations and facilitate smoother trade and export. The collaboration between the Industries, Agriculture, and Forest departments is crucial for a holistic approach to the sector’s development.
The committee’s primary objective is to submit a report to the Assam government, outlining recommendations to streamline the agar business. This report is expected to cover aspects such as improving market access, ensuring fair pricing for growers, promoting value addition, and addressing regulatory hurdles that currently impact the sector.
What’s next
The ministerial committee is expected to commence its stakeholder interactions promptly to gather insights and formulate its recommendations. The submission of their report to the Assam government will be the next key milestone. Based on this report, the state government is likely to introduce further policy reforms and initiatives aimed at boosting the agarwood industry, ensuring its sustainable growth, and enhancing the economic well-being of thousands of families dependent on it.