Agarwood cultivation profit per acre India | agarwood farming project report pdf

Agarwood farming is another hidden cultivation from most of the farmers and through this post we will try to put some light on agarwood farming profit in India and we would like to say that agarwood plantation investment in India can certainly change the life of any farmer if it is practiced in correct way. Agarwood tree needs 8-10 year to grow mature whereas mahogany tree needs 10-15 years to grow mature but both tree provides good investment opportunities in tree farming zone.

Agarwood farming in India

Agarwood is also known as liquid gold. Agarwood is mainly cultivated in Assam. Moreover, Orissa, Maharashtra, Karnataka and Gujarat farmers are also aware of agarwood plantation investment and benefit hence started agarwood farming in Karnataka, Gujarat, Maharashtra and Orissa. Agartala, containing the name Agar due to Agarwood.

While talking agarwood global market agarwood farming in the Philippines is quite popular same as mahogany farming in Philippines moreover, agarwood cultivation in USA and Cambodia is also very popular. India still need to push this precious farming because farmers are yet (2021) not aware of this precious tree farming moreover, government need to make a clear platform to promote some important tree farming and that should contain easy permission area.

 The agarwood tree in hindi name is ‘Agar’. The scientific name of Agarwood is Aquilaria and it is believed that the name agar came from Sanskrit name ‘Aguru’. It is listed as an endangered plant. First grade agarwood is one of the most precious and expensive natural raw materials in the entire world. Global market of agarwood was estimated above 8 billion dollar way back in 2013 and it is growing rapidly. Agarwood farming profit in India is much more than any other crop or tree farming but you need to check whether the cultivation of agarwood is permitted in your region or not.  

It is also called Aguru and the name of agarwood is being used in incense sticks. Due to high class fragrance and aroma it is mainly used in aromatic products like incense and  it has a huge demand in the perfume industry. The wood left after extracting the oil of Agarwood is used to make incense sticks (agarbatti). 

Agarwood plant information

Agarwood grows on an average, upto 40 meter height. After getting injured it releases a dark color sap that is called resin. Resin is released by the tree to recover the cut or damaged area and this resin is being collected by farmers because it has huge global demand as it is majorly used to making incense, high quality aromatic products and has huge demand in the medicinal as well perfume industry.

Agarwood plant profile

  • Agarwood tree family - Thymelaeaceae 
  • Agarwood scientific name - Aquilaria 
  • Ayurvedic agarwood name - Agaru 
  • Agarwood hindi name - Agarwood tree hindi name is Agar 
  • Agarwood tree english name - Eaglewood, Aloewood, Agarwood 
  • Agarwood trade name - Agar
  • Agarwood uses - Fragrant resinous wood and oil are used in medicinal, ayurvedic and perfume sectors. 

What is agarwood

Agar is a forest tree that usually grows at the height of 40 meters. It is also known as aloeswood, eaglewood or gharuwood. Agarwood is fragrant dark resinous wood used in making incense, perfumes and engraving. Resin is a highly clingy substance of plants. 

Resin is embedded in the heartwood of agarwood trees and it is formed after getting infected due to any cut, wound or snip the tree gets infected with a type of mold and that mold is called phialophora parasitica, it is a type of fungi. After getting infected the tree releases resin to recover the damaged part.

It is the same process when the human body gets any cut and to stop the blood flow our body releases white blood cells and some other function is processed by our body. Like this plant also releases sap to overcome the injury and in agarwood this sap is called resin. As the infection spreads it releases dark black color resin and this resin contains all the price and value. These products are used in making perfume and after oil extraction the wood of agarwood is used in making incense. The price of 1 kg resin is nearly

Agarwood farming project report

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Agarwood farming cost per acre

Plants cost

1 plant = Rs 30, Rs 45 to Rs 100 

700 plants per acre

Rs 30 x 700 plants = 21,000

Planting material cost = Rs 21,000 


Other cost

Land preparation cost = Rs 15,000

Fertilizer cost = Rs 8,000

Irrigation cost = Rs 15,000

Drip irrigation cost = Rs 60,000

Plant protection charges = Rs 6000

Labor cost = Rs 20,000

Miscellaneous cost = Rs 5000

Total cost (1year) = Rs 150,000 (including plant cost)


Total cost for 8 years

Reduce plant cost from 1st year cost -  Rs 150,000 - Rs 21,000 = 129,000 

cost for 8 years = Rs 129,000 x 8 years = Rs10,32,000

Total cost = Rs 10,32,000 + plant cost i.e 21,000 = 10,53,000

Total cost for 8 years = Rs 10,53,000  



Agarwood yield per tree

1 Agarwood tree can produce approximately 4 kg yield

agarwood price per kg 2021 = Rs 2 lakh to Rs 5 lakh (depends on quality)

If 700 plants are planted and after 8-10 years only 500 trees are in good condition.

500 trees x Rs 2 lakh = 10 crore 

Net profit = agarwood profit per acre - agarwood tree cost per acre

Net profit = 10 crore - 10,53,000

Net profit = Rs 9,89,47,000


Note - Price may differ according to the market and time. There are lots of duplicate variety in the market so be careful while purchasing it. Agarwood farming is not permitted in every state by the government so you need to check the agarwood cultivation permission at your region before starting agarwood plantation in India. 

How to start agarwood farming

How to grow agarwood tree - To start agarwood cultivation you need to follow the basic steps including agarwood variety, planting time, temperature, soil, agarwood plants per acre, plant spacing, fertilizer, harvesting, agarwood inoculation process etc. All these steps are given below with appropriate information.

First grade agarwood falls under most expensive agarwood variety  

Agarwood varieties  

  • Aquilaria baillonii 
  • Aquilaria banaensis 
  • Aquilaria hirta
  • Aquilaria khasiana - India
  • Aquilaria malaccensis
  • Aquilaria microcarpa 
  • Aquilaria parvifolia 
  • Aquilaria rostrate 
  • Aquilaria rugose
  • Aquilaria subintegra 
  • Aquilaria urdanetensis
  • Aquilaria beccariana
  • Aquilaria brachyantha 
  • Aquilaria citrincarpa 
  • Aquilaria crassna 
  • Aquilaria cumingiana 
  • Aquilaria decemcostata 
  • Aquilaria filarial

Types of Agarwood

In India mainly two varieties of agarwood are cultivated and both are given below:

  • Agarwood aquilaria malaccensis - aquilaria malaccensis is cultivated in North India due to more cold tolerance capacity in comparison to khasiana. 
  • Aquilaria khasiana - Aquilaria khasiana is suitable for the south region of India due to the climate and soil support.

Agarwood tree planting time

  • July, August and September are the most preferable agarwood seed germination time. These months consist of good rainfall therefore it is advised to plant agarwood during these months. 
  • However, you can plant agarwood plants throughout the year but during July to Sep the seedlings adjust well with the soil due to the weather and rain. This tree is mostly grown in the north east jungles of India. It is a forest tree mostly cultivated in Assam. 

Agarwood tree how long to grow 

Agarwood growing period - Agarwood tree growing time is upto 10 years. Yes, growing agarwood tree needs at least 10 years to mature. However, it can produce decent agar resin after 8 years.

Agarwood tree temperature

  • Agarwood temperature should be between 20° C to 30° C 
  • Humidity ranging from 75 - 85 % is good for growing agarwood in Australia, India or any other region. 
  • Light 56 % - 75 % needed for agarwood cultivation in India.

Agarwood water requirements

Rainfall - 2000 mm and 4000 mm per year. 

Agarwood plantation soil

Soil agarwood - agarwood in sandy soil, Agarwood grows well in red, yellow podzolic and clay sandy soil, loamy soil. Agarwood usually grows well in hill areas i.e greater than 750 meters above sea level. 

Agarwood plantation distance

  • Agarwood plantation spacing for 700-900 trees 2m x 2 m 
  • Agarwood plant spacing for 500-700 trees 2.5 m x 2.5 m

How many agarwood trees per acre

Agarwood plants per acre - Approximately 700 to 900 plants per acre can be planted with a distance of 2.5 m x 2.5 m and 2 m x 2 m.

Land preparation for agarwood plantation

  • Ploughing is necessary before agarwood plantation. 
  • After a couple of ploughing weed removal process is done along with cleaning of the field.
  • Dig the pits of 45 x 45 x 45 cm and feed them with FYM then expose these pits to the sunlight to kill insects.  
  • 15 % cow dung and 20 gram furadan can be added to these pits to prevent insect attack. 
  • Don’t allow stagnant water at your agarwood farm.
  • It causes plant mortality so be careful and be prepared for water logging problems. 
  • Select healthy agar seedlings at least 60-90 cm height. However, healthy seedlings should be preferred over height. 
  • Avoid older seedlings to rescue the root coiling problem.

Agarwood fertilizer and manure

  • Cow dung fertilizer for plants - cow dung is one of the most important organic fertilizer that is used for soil fertility. 15 % cow dung in each pit can be added.
  • Furadan fertilizer - 20 gram furadan can be used to kill insects. 
  • Coco peat - It has oxygenated properties and it is also useful to loosen the tight soil. 
  • TSP and DAP - Triple super phosphate and Di- ammonium phosphate release enough phosphate to the plant. 
  • Organic farming - Organic fertilizer is advisable especially in long run farming because organic fertilizer is a bit slower but at the same time they deliver the result from the root of the problem which results in better agarwood yield per tree for a long time. However, you can do the mix of chemical and organic in the beginning but you should move to the organic during the time it will give you better agarwood oil yield per tree. Moreover, agarwood is used in aromatic substances and ayurvedic medicines therefore you will not get a good price for any low quality product. 

Agarwood propagation method

It can be propagated by two methods - agarwood seed and agarwood seedlings

Agarwood seeds for plantation - It is necessary to plant agarwood seeds within 25-30 days otherwise they may damage. Before sowing the seed, dry them out in the sunlight for 8-10 hours. This should be done for 1-2 days. 

Agarwood cutting - Select the healthy cutting of agarwood of 60-90 cm height.

Agarwood harvesting 

Agarwood harvest time - After 8 - 10 years the tree can be harvested. Agarwood is not permitted to harvest in many states so first you need to take permission from the forest department officer of your district. It is advised to start the agarwood cultivation after taking permission from the forestry department of your region.  

Agarwood inoculation suppliers in India 

Agarwood inoculation process

Artificial inoculation technique is being used in agarwood cultivation. Through this technique agar is achieved in less time in comparison to agarwood forest trees. 

Fungal inoculation is process

  • In this process after 8-9 years the tree is being wound or cut intentionally from a few parts. Drill machine is used to aperture the tree part. 
  • Then fungi is being induced in the xylem of Aquilaria. 
  • Medicine is transmitted through the wound to get fungal infection on the tree wound area. 
  • This process is necessary because after getting infected the tree releases sap in the form of resin to overcome the wound and this resin is collected because it is very precious and sells at a very high price. 
  • Through the wounds of the tree, the inducer gets transported to other wounded parts of the tree.
  • After few months resinous wood forms 
  • Resin is the saliva released by the tree to recover the damaged parts
  • Resin is dark in color and it is formed around the wound in the various parts of the tree including branches, roots and trunk.
  • It takes between 4 to 9 months to form resinous wood in the tree. 
  • Agarwood's soft scent can be taken after the baking process of wood on fire.  
  • After resin formation it is being collected by the farmers. 
  • Sing agarwood - When agarwood sink in water it means it is the wound part of an agarwood tree. The Wounded part of the tree that produces resin becomes heavy and sinks in water. 

Suggestion - By promoting the cultivation of forest tree government can made common man to participate in environment development. If farmers will cultivate these trees at their farm they can contribute in carbon credit and this will directly impact countries environment policy in good way. By promoting these precious tree cultivation government can also create large number of self employment and new agriculture material related startups. Uttarakhand government can surely overcome the problem of mountain migration but for that government need to permit these or some other precious tree cultivation in their states. 

Conclusion - We are not saying to cut the jungles we are only saying every state government should permit their people to cultivate tree farming in their farm and government can get direct benefit of carbon credit which will produce good environment results. Today India is one of the youngest country in the world moreover, India is known for farming and 60 % population is depended on agriculture but when it comes to economy they are at the lowest side instead banking and other sector are economically more settled but very less people are doing job in these sectors. So, government need to think about agriculture sector as well, and if they will not permit and promote such expensive tree farming how farmers can compete with other sectors.

Agarwood farming related FAQ

What is resin?

Resin is a clingy (gummy) substance of a plant which is convertible into polymers. Resin is a mixture of organic compounds. Resin is used to make aromatic products such as incense. It is majorly used in the medicinal industry, Ayurvedic medicines and in the perfume industry. 

How long agarwood trees need to produce resin?

In jungle resin used to come naturally after any damage through animals but in the cultivation of agarwood this process is performed intentionally to collect the resin and agarwood trees can produce resin after 8-10 years so this process is applied after 8 - 10 years. 

What is the price of 1 agarwood plant?

1 agarwood plant price is between Rs 30 to Rs 100 accordingly. 

How much yield per agarwood tree?

The average yield produced by 1 agarwood tree is 4 kg.

Agarwood price per kg Philippines?

Agarwood 1 kg price in the Philippines is nearly P160,000 per kg.

Agarwood price per kg in USA?

Agarwood price per kg in USA is nearly US $10,000

Agarwood price per kg in India?

1 kg agarwood price in India is between Rs 2 lakh to 5 lakh

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