Timber and Wood Products Trade in India

Abstract

India's efforts to reduce deforestation have resulted in a gap between timber supply and demand, leading to increased imports of wood products, which can exhaust foreign exchange. However, trees outside of forests, such as those in agroforestry and farm forestry, can fulfill increasing demand for wood products. To meet demand with domestic supply, India passed the 2014 National Agroforestry Policy aimed to encourage the growth of forest cover and the use of agroforestry, however, the uptake of agroforestry has been slow. To investigate the reasons for this, we have developed a four-part approach aimed at understanding the interplay between domestic wood product policies, markets, and international trade dynamics. Our first step involves a data analysis to provide an overview of the primary import and export trends in India's wood product industry. In the second step, we use econometric analysis to identify the historical drivers of the trade imbalance for major forest products in India. Our third step involves a literature review to understand how markets and industries in India are driving farm forestry and agroforestry to provide wood products. Lastly, we conduct a value chain analysis in three states to examine whether India's comparative advantage lies in wood production. Our overall goal is to gain insights into the factors that hinder or facilitate the adoption of agroforestry in India and to identify potential solutions to increase its uptake.