Agarwood (oud) from Aquilaria malaccensis realistically works only in the warm, humid Northeast, mainly Assam, Tripura and neighbouring hill states, and it takes 8 or more years, a working inoculation method and legal paperwork before any income. It is a specialist, high-risk crop: the fragrant resin forms only when the tree is wounded and infected, and how much resin you get is not predictable.

Prices quoted in the news for top-grade chips are very high, but the first legal Assam export in May 2026 shows what ordinary shipments fetch. Read the market section before you plant anything.

Where it grows in India

  • A. malaccensis is native to eight Northeast states: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. India's other species, A. khasiana, occurs mainly in the Khasi Hills of Meghalaya.
  • In Assam, reports say Golaghat, Jorhat, Sivasagar and Hojai districts hold over 90 percent of the state's agarwood trees (Sentinel Assam).
  • Most trees stand on private land. Harvesting from the wild is not permitted in India.
  • The tree wants warm, humid, high-rainfall country with well-drained soil and no waterlogging. No verified ICAR or ICFRE figure for rainfall, temperature or soil pH was found, so none is given here. Ask the Rain Forest Research Institute (RFRI), Jorhat, before planting outside the Northeast.

Planting material and spacing

  • Plant seedlings from a reliable nursery. RFRI has worked on vegetative propagation, but seedlings remain the common material.
  • Spacing is a choice you make, not a fixed rule. For arithmetic: 8 ft x 8 ft gives about 680 plants per acre (1,680 per hectare); 10 ft x 10 ft gives about 435 per acre (1,075 per hectare). Assam press reports mention up to 4,320 trees per hectare (about 1,750 per acre), a very dense planting. Not all trees respond equally to inoculation, which is why growers plant more than they expect to harvest.
  • No verified fertiliser schedule for agarwood from a state university or ICAR source was found, so none is given. Young plants need weeding and shade; avoid standing water.

Inoculation: the step that decides everything

  • Natural resin formation is rare. The usual advice in published reviews is to inoculate trees artificially at about 6 to 8 years of age.
  • RFRI Jorhat has done research on standardising inoculation in A. malaccensis and ran a three-day training on cultivation and artificial inoculation in April 2024. This is the proper first call for a new grower.
  • Methods range from drilling and wounding to fungal or microbial inoculants. Many private "inoculation kit" sellers make big claims; ask for results on trees of your own age and site, and ask to see oil or chip grades from earlier clients.
  • One review says wood should be cut about three years after inoculation, otherwise the resin content falls. Other growers wait longer. Treat the timing as unsettled and test on a few trees first.
  • Harvest season: Assam reports say October to April gives the best oil extraction.

Timeline

StageApproximate time
Plant and establishYear 0 to 6 or 8, no income
Artificial inoculationAbout year 6 to 8
Resin builds upAbout 1 to 3 or more years
First saleRealistically year 9 to 12

Pests and diseases

No verified pest schedule for Indian agarwood plantations was found. General advice: keep drainage good to avoid root rot, watch for leaf-eating caterpillars and stem borers, and take any problem to your local KVK or RFRI rather than spraying on guesswork. Follow the label of any pesticide. Note that wounds from borers are not a substitute for controlled inoculation.

Cost and returns: what can and cannot be said

  • No ICAR, NABARD or NHB model project with audited per-tree yield for Indian agarwood was found. Any figure below is a claim or simple arithmetic, not a verified average.
  • Claim: Assam press reports project about Rs 4.32 crore per hectare after 15 to 16 years at 4,320 trees, which works out to Rs 10,000 per tree. This is a promotional projection, not an observed average.
  • Observed: the first legal Assam shipment in May 2026 was 100 kg to Saudi Arabia and 12 kg to the UAE, valued at Rs 2.35 crore in total. That is about Rs 2,100 per kg of material across the 112 kg (worked out here). Grade determines this number; the shipment's grade breakdown was not reported.
  • Headlines quote chip prices up to Rs 2,50,000 per kg. That applies to the very top grade only, and most plantation wood is not that grade.
  • Plan a base case where only part of your trees yield sellable resin wood and the rest sell as low-grade wood or fail. Costs of land, nursery plants, upkeep for 8+ years and inoculation come first with no income.

Market and selling

  • Buyers are oud-oil distillers, incense and perfume makers, and exporters to West Asia and East Asia. Assam has a planters and traders association, and an international trade centre has been announced for Golaghat (reported as expected in 2025; check status).
  • Agarwood is listed in CITES Appendix II. Exports need a CITES permit; the May 2026 Assam shipment also needed a restricted export licence from the DGFT. Domestic and export rules reference the Indian Forest Act, the Wild Life (Protection) Act and the 2023 international trade rules. One review notes few properly permitted exports so far, so legal channels are still thin.
  • Assam's Agarwood Promotion Policy 2020 (in force from 1 January 2021, reported extended to June 2026) eased felling and transit for planted trees and removed agarwood from forest produce on private land, according to press reports. Confirm the current status with the Assam forest department; rules in other states differ.
  • Be careful with buy-back offers, "guaranteed oud returns" and sapling sellers who also sell the inoculation service. Check the buyer's licence and get any contract reviewed.
💡 Tip: Before spending on plants, visit a planter whose trees are already inoculated, ask for the year of inoculation, what was sold and at what grade, and contact RFRI Jorhat for the current inoculation method.

Subsidy

Assam's policy promises nursery, sapling and cultivation support, but current rates are not verified. Ask the state forest department. For general schemes see subsidy finder and KCC.

Sources