Cutting Forests, Cutting Corners: India’s forest policy is sabotaging its own climate goals

India has nearly 140 million hectares of potential for forest protection and landscape restoration.

The central government’s moves to dilute environmental safeguards, especially those governing forest land, may accelerate industrial growth in the short term, but it deeply undermines the country’s long-term climate commitments.

This paradox is rooted in a dangerous false equivalence. A key concern is the increasing policy reliance on monoculture plantations as substitutes for natural forests. While plantations may provide fast economic and forestry outputs, scientific analyses consistently show that they fall far short of the carbon storage, biodiversity and ecosystem resilience provided by intact natural forests. This shift threatens the integrity of India’s carbon strategy and risks a major carbon sink shortfall—estimated at over 1 billion tonnes carbon dioxide equivalent by 2030—if current trends continue unchecked.

Legislative changes weakening forest protection framework 

India’s forest protection framework has been weakened by major changes in laws and rules, chiefly through the Forest (Conservation) Amendment Act, 2023, and the Forest Conservation Rules of 2022. The amendment narrows the legal definition of “forest” to only areas officially notified or recorded as forest after October 25, 1980, and exempts lands converted to other uses before December 12, 1996. This excludes vast areas, including substantial “deemed forests,” from protection. It also introduces broad exemptions for strategic projects near borders, public infrastructure in security-affected districts, and certain linear projects, making large tracts of forest legally available for non-forest use.

Simultaneously, the Forest Conservation Rules, 2022, erode community rights by removing gram sabha (village council) consent as a mandatory prerequisite for forest land diversion, instead allowing state governments and the Centre to approve projects without direct community consultation at the early stages. The new rules and the amendment Act further expand the list of permitted activities in forests, such as zoos, eco-tourism, and various infrastructure projects—even within ecologically sensitive areas—with most oversight shifted from local communities to central authorities.

Fundamental shift

These policy shifts represent a fundamental move toward prioritizing industrial, infrastructure and security interests over ecological and community safeguards. The dilution of definitions, removal of early-stage community consultation, and broadened exemptions collectively open up vast areas of forest to commercial and non-forest use, raising serious concerns among conservationists, policy analysts and rights advocates regarding the long-term impacts on biodiversity, local livelihoods, and India's climate commitments.

The danger lies in a policy architecture that systematically undermines the carbon sequestration infrastructure upon which India’s climate commitments depend. By treating monoculture plantations as equivalent substitutes for natural forests while weakening the scientific rigor essential for credible climate action, these changes threaten to isolate Indian businesses from the climate-conscious global economy.

At the heart of this miscalculation lies a misunderstanding of how carbon sequestration actually works. Research by The Energy and Resources Institute (TERI) on India’s carbon strategy demonstrates that achieving the committed 2.5-3 billion tonnes CO2 equivalent by 2030 requires genuine forest restoration, not plantation substitutes that masquerade as climate solutions. The distinction isn’t academic. It’s the difference between meeting India’s net zero commitments and falling catastrophically short.

Erosion of carbon sequestration infrastructure

An analysis by the Observer Research Foundation reveals the stark mathematics behind India’s forest challenge. While policy frameworks celebrate tree cover increases, 96 percent of tree cover loss from 2013 to 2019 occurred in natural forests, with intact forests accounting for only 6.7 percent of India’s total tree cover. This isn’t merely an ecological concern. It represents a systematic erosion of India’s carbon sequestration infrastructure when the country needs it most.

Forest degradation already costs India 1.4 percent of GDP annually, according to a TERI analysis, a haemorrhaging that hastens as climate impacts intensify. Rather than stemming this loss, current policies appear designed to amplify it through weakened protections and scientifically questionable compensatory mechanisms that prioritize industrial access over economic stability.

The global business community has grown increasingly explicit about the risks such policies create. KPMG’s Climate Risk Report emphasizes that ESG (environmental, social, and governance) considerations have become “virtually certain” regulatory requirements, with financial and reputational impacts for non-compliance now integrated as principal risks in enterprise risk management frameworks.

The carbon credit market offers perhaps the most telling illustration of how diluted forest policies translate into commercial disadvantage. Nine renewable energy projects from India were among 47 projects worldwide producing “problematic credits” in 2024, with 80 percent of carbon credits from these major projects unable to reliably deliver promised emissions reductions due to lack of additionality, according to a study by Corporate Accountability, a civil society organisation.

Quality deficit has commercial consequences

When there is a demand for high-quality, verified carbon credits, India’s plantation-heavy approach fails to meet international quality standards. This is exemplified by PwC’s approach to carbon credit quality, with 87 percent of the consultancy’s portfolio coming from projects protecting natural environments.  This quality deficit has immediate commercial consequences that extend beyond environmental compliance.

In such a scenario, India’s compensatory afforestation programmes would struggle to meet “robust additionality, baseline, and monitoring, reporting, and verification frameworks,” according to a carbon market study by EY, which could potentially exclude Indian businesses from premium carbon markets and the substantial revenues they represent.

There is a systematic shift toward “industry-centric, technocratic approaches” that weaken community participation and scientific rigor in forest conservation, according to an earlier governance review by the Centre for Science and Environment, an advocacy group. This trajectory contradicts global trends toward stakeholder engagement and transparency that international investors increasingly demand, signalling institutional weakness rather than business-friendly reform.

India has nearly 140 million hectares of potential for forest protection and landscape restoration that could sequester 3-4.3 billion tonnes of above-ground carbon by 2040, found a restoration analysis by the World Resources Institute, a think tank. However, realizing this opportunity requires policy frameworks that recognize the fundamental distinction between genuine restoration and industrial plantation, the distinction that current policies systematically blur.

High stakes for net zero ambitions

India could potentially provide over 50 percent of total climate mitigation potential through agricultural and forestry interventions, but the integrity of these solutions depends critically on maintaining scientific rigor in distinguishing between natural ecosystems and commercial plantations, said an analysis of nature-based solutions by PwC. The consultancy’s emphasis on verifiable emissions reductions directly contradicts the plantation-as-forest substitution that underlies current policy thinking.

India needs to invest $1.5 trillion by 2030 for climate action at scale, according to estimates by a climate investment analysis by Deloitte. Weak forest policies that generate questionable offsets rather than genuine carbon sequestration will exclude Indian businesses from this massive financing opportunity while undermining the country's credibility in international climate negotiations.

India’s current forest policy trajectory represents more than an environmental misstep. It’s a strategic blunder that threatens to strand the country’s businesses in an increasingly unforgiving global marketplace where climate credibility determines access to capital, markets and partnerships.

India’s forests represent more than carbon sinks. They constitute strategic infrastructure whose protection determines whether the country can honour its climate commitments while preserving economic competitiveness. The current policy trajectory jeopardizes both objectives simultaneously, creating vulnerabilities that extend well beyond environmental concerns to the fundamental architecture of India’s economic future.