Agarbatti is a smoke-releasing substance. It is made of natural ingredients that can be burned to create a fragrant, aromatic smoke.
Different kinds of incense sticks have a different aromatic smell. It depends on the fragrance used in, resins, while others are made with powders.
Agarbatti is used to freshen up the scent of indoor areas, Pooja rooms, for health, and more.

A long history of use


The word incense derived from Latin incendere meaning "to burn". And also Agarbatti from Sanskrit agar: "aroma", Vatti: "wound" or "grief".  It is a larger part of the Indian economy because India has many cultures and religions.
Basic ingredients are required to produce incense sticks are bamboo sticks, a paste made of charcoal or sawdust and joss or jiggit or gum or tabu, and the perfume ingredients – which traditionally would be a masala.  
As Hinduism developed &  Buddhism was founded in India, incense became an integral part of Buddhism as well. Around 200 CE, Buddhists started using Incense sticks and making them taught to China.
Egyptian started using at the 7th century BC.
Ref: https://en.wikipedia.org/wiki/Incense_in_India#History
Ref: https://en.wikipedia.org/wiki/Incense#History


What is an incense made of?


“Incense sticks or Agarbathi” made up of  Charcoal powder, Sawdust, Jiggit powder (acts as an adhesive), and bamboo sticks. These are called Raw Incense Sticks. Raw sticks are then bundled up and dipped in fragrance oil and left for drying for 12 hours. After this process packed the goods and sent them for sale.