India is very rich in forest resources, with a large area under forest. All kinds of trees are found here varying from the deciduous, tropical hardwood trees to the evergreen and coniferous trees.
Trees provide one with a wide range of products. From paper to paints, chemicals, housing and furniture, they are a source of many materials. India's forest industry basically can be divided into two major areas: the paper and pulp industry and the wood industry.
Pulp and Paper Industry:
The saw dust and chips left over after obtaining plywood are used to prepare paper and other related products. Many units are engaged for the production of paperboards, different varieties of paper, and newsprint. India is self-sufficient in producing most varieties of paperboards and papers. About 40% of the total yield depends on wood. Exports in this field are growing, especially to the bordering areas.
Improvements in the literacy and overall growth of the nation bode well for this industry.
Also, the demand for paper-based products, such as tissue paper, is growing. There is also a rise seen in the demand of filter paper, tea bags, and medical grade papers. All these factors are bound to improve the viability of this sector.
There is also a market for machinery and equipment in this field. Also, advanced technological input can be provided to Indian companies.
This industry can have 100% FDI via the automatic route. The government also gives incentives to paper-based industries operating on unconventional raw materials. The government has also initiated various policies to facilitate more availability of raw materials. The duties on the imports of pulp and wood have been lowered.
All these factors are a boon for foreign investors looking to foray into this field.
Different types of trees are found in India. Some of the finest plywood, such as teak and rosewood, are found here and are renown worldwide. Gurjan, Hollock, and Vellapine are some of Indian timbers used to create commercial plywood.
Wood is of great demand in the areas of furniture and laminates. Wood is also required in the fields of railways, defense, and construction. Bamboo products, which are similar to wood, are also in demand.
To protect the forests in India, the government has taken some steps. So in order to make your way into this field, an approval needs to be sought from the Environment and Forests ministry.
Landscaping artists use tree barks. Tree barks are also used to generate electricity for lumber and paper industries.
Trees contain natural glue. When the wood is burnt to produce pulp, the lignin is dissolved, and cellulose fibers are released. By-products are then used in paints, chewing gums, detergents, and asphalt.
The cellulose from trees is useful for producing dinnerware, helmets, toothbrushes, and electrical outlets. Wood pulp is also used to create deodorants, hair sprays, cleaning compounds, cosmetics, and also medicines.
So the Indian forest industry caters to a variety of industries and helps in the production of an array of products. Hence, the investment possibilities are plentiful, and foreign businessmen can look at this field for their investments.