Agroforestry is a multidisciplinary field that offers various outputs with multiple functions. While the market for crop components in agroforestry is well established, there is a lack of organized and dedicated supply chains for other outputs such as forage, timber, fuel wood, various nuts and minor fruits. This presents an opportunity to streamline and develop entrepreneurship in this sector. At present in India, only two incubation centres are working, one is at ICAR-CAFRI and another is at Tamil Nadu state agricultural university, and these centres are focusing on the development of entrepreneurship in rural India. The wood industry in India is experiencing rapid growth, positioning itself as one of the fastest-growing sectors. According to the World Bank, the organized wood market in the country is projected to expand by approximately 20 per cent annually in the coming years. To meet the demands of this industry, India has been importing wood and wood products, with the total value of imports in this sector exceeding 457 billion Indian rupees by the end of the fiscal year 2022. Currently, agroforestry plays a significant role in fulfilling of requirements of fuel wood (~50%), small-timber needs (~ 66%), plywood (70–80%), wood for paper production (60%) and fodder for livestock (9–11%). Additionally, agroforestry provides sustainable resources for getting households, including food, fibre, fruit, medicinal plants and various ecosystem services. Considering the potential capacity of agroforestry sector, it is appropriate to tap into the market potential. Here we elucidate the process of identifying the value-chain development and opportunities associated with this agroforestry sector while delving into the advantages and disadvantages of agroforestry in detail.