Fallout of India’s bold move to privatise investment on degraded forests

Early this month, in 2026, the Ministry of Environment, Forest and Climate Change (MoEFCC), Government of India had issued a significant amendment in its guidelines under the Forest Conservation Act 1980 on January 2, 2026, allowing private and government entities to undertake afforestation and plantations on forest land. It means that afforestation and plantation activities undertaken by the private entities are now classified as 'forestry activities' within the purview of the Forest Conservation Act which earlier were recognised as 'non-forestry' activities. This action is part of the implementation of the 2023 amendments to the Van (Sanrakshan Evam Samvardhan) Adhiniyam, formerly the Forest Conservation Act (FCA).  The guidelines interalia states that the plantations must be carried out in association with State Governments or Union Territories, typically on a revenue-sharing basis, and must align with an approved Working Plan or Management Plan. All activities shall be done under the supervision of the State Forest Department. State governments can now lease degraded forest land to private players based on a Detailed Project Report (DPR) without the previously mandatory approval under Forest Conservation Act.

The guidelines stipulate for the involvement of non-government entities, including private companies and NGOs, in the restoration of degraded forest lands. This question of involvement of inviting investments from the private sector on rehabilitation of degraded forests has been in discussions for the last three to four decades in various forums both within and outside the government. The proponents of the proposal argue that unless private investment is forthcoming, it will be difficult to achieve the target of 33 per cent of the land mass under forest and tree cover. The government thus desires to leverage private capital for afforestation that the public exchequer cannot afford alone. A proposal to have a tripartite agreement with government, industry and local people through JFM committees did not find favour in past as the government opted out of it due to livelihood interests of forest-dependent communities and opposition from a large section of civil society for the fear that commercial interests of industry will dominate the people's livelihood interests.

 

However, environmentalists argue that this move may lead to rampant commercialisation of forest land and promote monoculture plantations at the cost of natural forests, which could threaten biodiversity, water recharge and undermine the rights of forest-dependent communities. Already, the Forest Survey of India in its State of Forest report of 2023 had highlighted the glaringly poor condition of natural forests. One of the main reasons of criticism is the fact that if these activities are considered now as “forestry,” they will automatically be exempted from paying the Net Present Value (NPV) and would not be required to undertake Compensatory Afforestation (CA). These were previously mandatory requirements for utilising forest land. Let us examine it from the perspective of a resource manager.

The supporters of this decision argue that India is a major importer of timber and pulp. By facilitating commercial “tree crops” on degraded forest land, the policy aims to boost domestic wood production, supporting the “Aatmanirbhar Bharat” (Self-Reliant India) mission and reducing the carbon footprint associated with international shipping. It further tries to incentivise “Green Credits”. The order thus aligns with the Green Credit Program as the companies can now generate credits by restoring degraded lands, which can later be traded or used to offset their own environmental obligations, creating a market-driven incentive for ecological restoration.

However, this writer, based on his around 40 years of experience in various capacities and his knowledge of India's ecology, believes, along with several other that the guidelines should have been framed with far more diligence. The past experience leasing out forests to paper mills before the enactment of the Forest Conservation Act 1980 had proved disastrous, and the order may effectively “privatise” public forests and prioritise profit over biodiversity through greed and lack of vision among many powerful people who make decisions in states.

Degraded forests have their own ecological value with native species but a “plantation” is not a “forest.” Natural forests are complex ecosystems with diverse species, layered canopies, and rich soil microbiomes. The private bodies would focus on commercial plantations of fast-growing, high-value monocultures like eucalyptus, teak, or acacia. This will lead to native Biodiversity Loss as plantations do not support the same variety of birds, insects, and wildlife as native forests. The lack of water-holding capacity of monoculture depletes local groundwater tables, harming nearby agriculture. And the biggest casualty if local people are not taken on board would be the depletion or decimation of non-timber forest products, which form the bedrock of livelihoods in tribal and rural areas specially of the poor.  The lurking fear in the mind of people is about the end of NPV and Compensatory afforestation (CA) if the plantations raised are allowed to offset these two fundamental requirements before diversion of forestland.

NPV was designed to capture the value of oxygen production, carbon sequestration, maintaining the hydrological cycle and soil conservation and help people to be compensated for many things. Waiving these fees allows companies to profit from public land without compensating the public for the loss of these natural services. Apart from this, a significant point of contention is how “degraded forest” is defined. In many states, lands that are ecologically vibrant but have low canopy density (like scrublands or grasslands) are labelled “degraded.” This order could lead to the conversion of these unique ecosystems, which are vital for species like the Great Indian Bustard or various medicinal herbs available in dry and semi-dry forests, into industrial wood lots.

Having said that about the inaccuracies in approach, this writer is not opposed to enlisting support for the rehabilitation of some identified refractory forest lands with less than 10 per cent density over the 4 million ha of scrub forests, provided the industry brings in superior technologies and through a tripartite agreement with local stakeholders and the government agencies. DPRs should mandate a high percentage of indigenous trees rather than 100 per cent monocultures.

No commercial lease should be granted without the explicit, informed consent of local communities. Periodic third-party audit and monitoring to ensure that “restoration” is actually happening, rather than just timber mining. The NPV must not be exempted and the requirement of CA can be assessed on a case-by-case basis depending on the actual situation on the ground. Otherwise, the best approach is to pool up funds through the corporate social responsibility route to enrich the natural forests of the country and save our biodiversity. For the industries, the government should instead incentivise the farmer-industry relationship rather than eyeing forestlands. Let us see what is in store for forests if this relaxation results in a “Greener India” or a “Greener Balance Sheet” for corporations as also for or at the cost of the locals, remains to be seen.

The writer is former IFS officer and Chairman of Centre for resource Management and Environment; views are personal