This paper highlights the results of an action research to upgrade mountain collectors of medicinal and aromatic plants (MAPs) like Indian bay leaves (Cinnamomum tamala Nees and Eberm) in Chamoli district of Uttrakhand, India. Collectors were vulnerable to state regulations that constrained their access to bay leaves in reserve forests and to MAPs markets that were established by the Government in the lowlands. To address these constraints, policy readjustments through three independent but interlinked value chain (VC) upgrading strategies comprising of VC coordination upgrading, horizontal coordination and streamlined marketing were implemented together with stakeholders. Information was collected from focus group discussions with collectors, traders and facilitators in bay leaf VC and a questionnaire was used to collect pre- and post-intervention data (n = 139) to analyse the impact on resource management and household incomes. Findings show horizontal coordination that increased awareness and ownership of collectors led to adoption of improved harvesting and management practices. Streamlined marketing through local auctions reduced collectors' risks and led to a three-fold increase in price at the village, which increased household income. VC coordination strategies enabled piloting a pro-poor VC governance system. Local auctions are a crucial but missing function in the MAPs VC in Uttarakhand that should be incorporated in MAPs marketing polices. The study's findings and approach can be upscaled to other MAPs for benefiting a large number of people and ecosystems in Uttarakhand and beyond and contribute to the debate on green economy in mountains.