Agarwood: India’s "Liquid Gold" Initiative

Agarwood: India’s "Liquid Gold" Initiative

Context

In early 2026, the Government of India intensified its push for the Agarwood Mission, allocating ₹80 Crore to boost the Agarwood value chain in Northeast India. The project specifically focuses on Tripura, which aims to become a global hub for agar-oil processing, leveraging the state's ideal agro-climatic conditions.

About the News

• The "Wood of the Gods": Agarwood (also known as Oudh) is one of the most expensive natural raw materials in the world, primarily used in high-end perfumery, traditional medicine, and religious ceremonies.
• Economic Shift: Historically, the trade was largely unorganized and faced legal hurdles. The new policy aims to formalize the industry, supporting the "Act East" policy and doubling farmers' income in the region.

Biological Process: From Infection to Resin

The formation of Agarwood is a unique biological phenomenon where "stress leads to value."

• The Host: Derived from the Aquilaria tree (Aquilaria malaccensis).
• The Catalyst: A healthy Aquilaria tree is odorless and pale. Agarwood only forms when the heartwood is infected by a specific fungal mold (Aspergillus or Fusarium species) or suffers physical injury (e.g., boring by insects or human-induced "wounding").
• Defense Mechanism: In response to the infection, the tree produces a dark, aromatic, and highly dense oleoresin to protect itself. This resin-embedded wood is what we call Agarwood.
• Extraction: The fragrant oil is typically extracted through steam distillation, often requiring hundreds of kilograms of wood to produce a few milliliters of oil.

Conservation and Legal Status

Due to over-exploitation in the wild, the species is strictly monitored under international and domestic laws.

Distribution and Ecology

• Primary Range: Native to the rainforests of Northeast India (Assam, Tripura, Arunachal Pradesh) and parts of Southeast Asia (Vietnam, Cambodia, Indonesia).
• Environment: Thrives in hilly, well-drained terrain with high humidity.

Way Forward

• Artificial Inoculation: Promoting the use of "fungal inoculants" to induce resin formation in plantation trees, reducing the need to fell wild trees.
• Geographical Indication (GI): Efforts are underway to secure a GI tag for Tripura Agarwood to ensure premium pricing in Middle Eastern and European markets.
• Ethical Sourcing: Establishing testing and certification labs in Agartala to verify the purity of agar-oil for international buyers.

Conclusion

The Agarwood initiative represents a perfect blend of environmental conservation and high-value commerce. By shifting from wild harvesting to sustainable plantation-based inoculation, India is poised to recapture its historical dominance in the global luxury perfume market.