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Sweet flag has a very long history of medicinal use in Chinese and Indian herbal traditions.It is widely employed in modern herbal medicine as an aromatic stimulant and mild tonic. In Ayurveda it is highly valued as for its ability to bring clarity to the consciousness. It is the best remedy for the ill effects of alcohol, particularly on the brain and liver, and is used in Ayurveda to counter the side effects of all hallucinogens. This root has been used as a rejuvenator for the brain and nervous system and as a remedy for digestive disorders. It is used internally in the treatment of digestive complaints, bronchitis, sinusitis etc.

It is said to have wonderfully tonic powers[citation needed] of stimulating and normalizing the appetite. In small doses it reduces stomach acidity whilst larger doses increase stomach secretions and it is, therefore, recommended in the treatment of anorexia nervosa. Sweet flag is also used externally to treat skin eruptions, rheumatic pains and neuralgia. . A homeopathic remedy is made from the roots to be used in the treatment of flatulence, dyspepsia, anorexia and disorders of the gall bladder.

It is also used in incense sticks and dhup and is widely used as insecticide for lice, bedbugs, worms etc.