New Forest Land Lease Policy A Game Changer Policy for Wood Based Industries

Amendment in Guidelines for Assign Forest Land on Lease allow Short Rotation Tree Crops (SRTC) is a game-changer, boosting wood availability for WBI while easing pressure on agricultural land.

The amendment to the guidelines notified on 29 November 2023(Notified on 29.11.2023 and Incorporated at Para 7.2 of the Consolidated Guidelines), now incorporated at Paragraph 7.2 of the Consolidated Guidelines, marks a significant policy intervention towards sustainable forest management and resource security in India.

In revised provisions Ministry of Environment, Forests and Climate Change (MoEFCC) is all set to open up forests for commercial plantations by private and government entities without the requirement of a one-time monetary compensation, called net present value (NPV), and compensatory afforestation.

Such plantations will now come under forestry activity. This has been done through an amendment passed by the ministry on January 2, 2026, to the 2023 guidelines issued under the Van (Sanrakshan Evam Samvardhan) Adhiniyam, earlier known as the Forest Conservation Act (FCA), Specify the terms and conditions for assignment of forest land on lease for raising Short Rotation Tree Crops (SRTC), with the dual objective of enhancing forest cover and productively utilizing unused or underutilized forest land.

Assignment of forest land on lease for raising Short Rotation Tree Crops (SRTC) reflects the Government’s commitment to sustainable forest management, resource security, and Atmanirbhar Bharat in wood and timber production.

India’s growing demand for wood and wood-based products has resulted in increased dependence on imports and mounting pressure on agricultural land. The amended guideline addresses these challenges by enabling the planned and regulated utilization of suitable forest land for SRTC plantations, while ensuring compliance with environmental safeguards.

Forest advisory committee (FAC) under the ministry that met on December 2, 2025 discussed on “increased dependence on imported pulp, paper, and paperboard” In 2024-25, paper and paperboard imports had reached 2.05 million tons – a nearly two-fold jump from 1.08 million tons imported in 2020-21 (Data said by IPMA in May 2025 and Ministry of Commerce).

The MoEFCC remove restrictions on plantations – including low-rotation crops such as popular and eucalyptus on requests received from several government and private entities to establish plantations in degraded forest areas.

Key benefits from this amendment:

• Enhancement of Forest and Tree Cover through scientific plantation of short rotation species.
• Reduction in Import Dependency by strengthening domestic wood production capacity.
• Optimal Utilization of Degraded / Underutilized Forest Land without diversion for non-forestry purposes.
• Protection of Agricultural Land by shifting industrial wood production away from food-producing areas.

Addressing Raw Material Constraints

Wood-based industries in India have historically faced:

• Inadequate domestic raw material availability
• Heavy reliance on imports wood
• Competition with agricultural land use

The amended guideline directly addresses these constraints by enabling domestic, long-term, and predictable wood supply from scientifically managed SRTC plantations on forest land.

Supporting Industry Growth, without Competing With Agriculture

By shifting industrial wood production from agricultural land to designated forest land, the policy:

• Prevents conflict with food security
• Reduces land-use competition
• Enables scale expansion without social backlash

The amendment under Para 7.2 is a landmark reform for India’s wood-based industry, providing policy certainty, raw material security, and sustainability alignment. It lays the foundation for a resilient, cost-effective, and environmentally responsible industrial growth model.

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