Agarwood, also known as Oud or Aquilaria, is one of the most valuable woods in the world. In India, its cultivation is legal with certain government permissions. This detailed guide explains what Agarwood is, its history, how it forms, where it grows, how to cultivate it, legal requirements, uses in perfumes and medicine, and market potential. Learn step-by-step how to start Agarwood farming in India, required permits, cost, returns, and tips for success. Perfect for farmers, agri-entrepreneurs, and investors looking for high-value cash crops.
Introduction
Agarwood, also known as Oud, Aloeswood, or Eaglewood, is one of the most precious aromatic woods in the world. Extracted from the Aquilaria tree, Agarwood is widely used in luxury perfumes, incense, traditional medicine, and spiritual rituals. It is highly prized in the Middle East, Europe, and Asia, often fetching prices higher than gold.
In India, the demand for Agarwood and Oud oil has been growing rapidly, making it an attractive commercial crop. However, due to its endangered status, its cultivation and trade are regulated by law. This article will give you a step-by-step, SEO-optimized, and detailed guide to understanding and starting Agarwood farming in India.
What is Agarwood?
Agarwood is the resin-impregnated heartwood of the Aquilaria malaccensis tree. Normally, Aquilaria wood is pale, light, and without any aroma. But when the tree is naturally infected by a specific type of fungus (Phialophora parasitica) or is artificially induced, it produces a dark, aromatic resin as a defense mechanism. This resin turns the heartwood into Agarwood, which is heavily scented and valuable.
History and Cultural Importance of Agarwood
Ancient Use: Agarwood has been used for thousands of years in Buddhist, Hindu, Islamic, and Chinese traditions for religious ceremonies.
In Ayurveda: Used for treating digestive disorders, asthma, and stress.
In Middle Eastern Culture: Oud oil is a symbol of prestige and luxury.
In Japan and China: Used in incense ceremonies (Kōdō).
How Agarwood Forms – Natural vs. Artificial
Natural Infection – Rare and can take decades; happens when the tree gets injured or attacked by fungus.
Artificial Induction – Farmers drill small holes and inject fungal cultures or chemical inducers to trigger resin formation within 1–3 years.
Varieties of Agarwood
Aquilaria malaccensis – Native to Northeast India; most valuable.
Aquilaria crassna – Found in Vietnam, Cambodia, Laos.
Aquilaria agallocha – Common in Assam and Tripura.
Agarwood Cultivation in India
Climatic & Soil Requirements
Climate: Tropical and subtropical; 20–35°C temperature.
Rainfall: 2000–4000 mm annually.
Soil: Well-drained sandy loam with pH 4.5–6.0.
Propagation
Seeds: Fresh seeds have 80–90% germination rate.
Nursery: Seedlings grown for 6–8 months before field planting.
Planting
Spacing: 2m × 2m or 3m × 3m (1100–2500 plants per acre).
Pit Size: 45 × 45 × 45 cm, filled with organic manure.
Maintenance
Regular watering during dry seasons.
Weed control and mulching.
Artificial infection after 5–7 years to induce resin production.
Legal Status of Agarwood in India
Listed under CITES Appendix II and Indian Forest Act.
Cultivation is legal on private land.
Cutting, transporting, and selling requires Transit Permit from the state forest department.
Export requires CITES Export Permit.
Processing & Products
Agarwood Chips – Burned for incense.
Agarwood Oil (Oud) – Extracted via steam distillation.
Powder – Used in cosmetics and medicine.
Market Price of Agarwood
Raw wood: ₹50,000 – ₹5,00,000 per kg (depending on quality).
Oud oil: ₹8,00,000 – ₹15,00,000 per liter.
Middle Eastern countries like UAE, Saudi Arabia, and Qatar are the biggest buyers.
Profit Potential from Agarwood Farming
Plant Density: 1000 trees/acre.
Induction after: 6 years.
Harvest after: 10–12 years.
Estimated Yield: 20–25 kg high-grade agarwood per acre.
Estimated Income: ₹1.5 crore+ per acre in long term.
Challenges in Agarwood Farming
Long gestation period.
Risk of low resin yield.
Government regulations for trade.
Tips for Successful Agarwood Farming
Buy seedlings from certified nurseries.
Keep proper records for permits.
Use artificial induction for faster results.
Target Middle East markets for high profit.
Conclusion
Agarwood farming can be one of the most profitable agroforestry ventures in India, but it requires patience, legal compliance, and careful management. With rising global demand for Oud oil and Agarwood products, farmers and agri-entrepreneurs can earn huge returns while contributing to the conservation of this valuable species.
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