India’s Forests Are Worth ₹2.5 Trillion — But Plantations Have Been Hiding It

Why It Matters

The findings expose a massive undervaluation of natural capital, urging policymakers to adopt aggregate forest valuation to safeguard livelihoods, biodiversity and climate benefits amid mounting development pressure.

Key Takeaways

• Indian forests generate ~US$30 bn in ecosystem services annually
• Non‑timber products contribute about US$21 bn, supporting 300 m rural people
• Single‑service valuations underestimate forests, favoring industrial plantations
• 96,000 ha lost to non‑forest uses in past five years
• Aggregate valuation needed to protect 275 m forest‑dependent livelihoods

Pulse Analysis

India’s forest sector is at a crossroads as a groundbreaking meta‑regression quantifies the full suite of ecosystem services it provides. By aggregating carbon storage, water regulation, non‑timber products and cultural benefits, the study reveals a total annual value of roughly US$30 billion—far higher than estimates derived from single‑service approaches that have historically guided policy. This methodological shift underscores how fragmented valuations can mislead investors and regulators, making industrial plantations appear more economically attractive than diverse, multi‑use forests that underpin rural economies and biodiversity.

The valuation breakdown highlights that non‑timber forest products—medicinal plants, bamboo, honey, and more—account for about US$21 billion, directly supporting close to 300 million rural residents. Water regulation services add another US$2.4 billion, a critical input for agriculture across the subcontinent. Replacing these natural functions with engineered infrastructure would entail prohibitive costs, emphasizing the hidden economic dependency on forest ecosystems. Moreover, the study links forest degradation to tangible livelihood risks for the 275 million people whose incomes are tied to forest resources, reinforcing the social dimension of natural capital.

Policy implications are profound. The authors call for an aggregate valuation framework that can be integrated into India’s environmental accounting and land‑use planning, aligning with emerging global standards such as Australia’s AASB S1 and S2 climate reporting rules. By placing the full economic contribution of forests on balance sheets, decision‑makers can better weigh development projects against the long‑term costs of ecosystem loss. This approach could shift financing toward conservation, incentivize sustainable forest management, and ultimately preserve the natural capital that fuels India’s economy and climate resilience.