The formation of agar within the agar tree (Aquilaria agallocha Roxb.) is associated with some external injury to the plant and is never produced in sound tree where no injury occurs. Agar is of various grades & prices depending on the proportion and concentration of black substance present in the wood, darker the colour of the wood, higher is the grade and price. For extracting attar the wood which is prepared by a special process is distilled by an apparatus. Agar making is an important industry. It is facing difficulties because of limited supply of agar from India. It is suggested that in order to save the industry, the raw material should be produced in the country itself.