For decades, thousands of farmers in Upper Assam’s Golaghat, Sivasagar, and Jorhat lived a strange economic paradox. They were cultivating one of the world’s most valuable aromatic resources—the agarwood tree—in their backyards, yet legally accessing the international market was nearly impossible. Crippled by strict government restrictions and the lack of a direct export customs hub in Guwahati, Assam’s indigenous agarwood traders were forced to either rely on middlemen in distant port cities or fall victim to illegal smuggling networks, losing out on their rightful income.
On October 30, 2026, this long-standing bottleneck was cleared. The Directorate General of Foreign Trade (DGFT) officially approved Lokpriya Gopinath Bordoloi International Airport in Guwahati as an export hub for agarwood oil, chips, and related products. Announced by Union Commerce and Industry Minister Piyush Goyal at the request of Assam Chief Minister Dr. Himanta Biswa Sarma, this decision amends Chapter 12 of Schedule II of the ITC (HS) Export Policy, 2022. It effectively opens the doors for direct foreign trade from the Northeast.
The Science and Legal Background: Why is Agarwood so Heavily Regulated?
The agarwood tree (scientific name: Aquilaria malaccensis) is not naturally fragrant. When the tree is infected by a specific type of mould, it secretes a dark, aromatic resin as a defense mechanism. This infected heartwood is the highly prized ‘agar’, which is processed into chips, powder, and, through distillation, the exceptionally valuable agarwood oil (commonly known as Oud).
Because the species was rapidly declining in the wild, it was listed in Appendix II of CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora). This listing means that while international trade is not completely banned, it is strictly controlled to ensure the species’ survival. Before November 2021, India had an almost complete ban on agarwood exports. To curb the black market and provide a legal avenue for farmers, the government shifted its policy to establish annual export quotas strictly for artificially propagated (plantation-grown) agarwood. The export quota for wild-sourced agarwood remains absolutely zero.
National Quotas vs. Assam’s Share: What the Numbers Say
When discussing India’s agarwood trade, we are essentially talking about Assam. The state alone accounts for approximately 81% of India’s total agarwood production. With an estimated 12 crore agarwood trees, the sector provides direct livelihoods to over 50,000 farmers and workers in Assam. Recognizing this near-monopoly, the DGFT’s notification issued in January 2025 allocated the lion’s share of India’s annual export quota to Assam:
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Agarwood Chips and Powder (HS Code 12119080): Out of India’s total annual national quota of 1,51,080 kg, a massive 1,19,400 kg (nearly 79%) is exclusively allocated to Assam.
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Agarwood Oil (HS Code 33013010): Out of the national quota of 7,050 kg, Assam’s share is 5,560 kg (roughly 78.8%).
Why the Guwahati Airport Approval Matters
Previously, even if Assam’s exporters secured the highly restricted legal licenses, they had to route their shipments through approved ports like Kolkata or Mumbai. This drastically inflated both transport costs and transit time. The approval of Guwahati airport introduces three direct benefits:
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Direct Middle East Connectivity: The primary markets for Indian agarwood are Middle Eastern nations like the UAE, Saudi Arabia, Kuwait, Oman, and Qatar. In May 2026, Assam successfully exported its first legal batch of chips worth ₹2.35 crore to Saudi Arabia and the UAE, followed by a 123 kg shipment of premium chips from Guwahati to Dubai on October 26, 2026. The new approval standardizes and streamlines this direct route.
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Boosting the Golaghat ODOP Sector: Golaghat district has been specifically identified for agarwood products under the government’s ‘One District One Product’ (ODOP) initiative. By integrating farming, processing, and direct exports, economic estimates suggest this sector could eventually capture a ₹50,000 crore market share.
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A Gateway for the Entire Northeast: Legal agarwood traders from neighboring states like Manipur or Tripura can now utilize Guwahati airport as their primary export terminal, provided they have valid documentation and CITES permits.
The Bigger Picture: Digital Certificates and GI Tags
Simply authorizing an airport is not enough to command premium prices in the international market; quality assurance is critical. To address this, the Central Government and the Ministry of Development of North Eastern Region (DoNER) have drafted a specialized roadmap. This framework focuses on issuing Digital Certificates of Origin to verify tree sources, mapping resources, standardizing artificial inoculum suppliers, and ultimately securing a Geographical Indication (GI) Tag for Assam’s agarwood oil to brand it globally.