Can private companies establish plantations on forest land in India?

What changed

On 2 January 2026 the Ministry of Environment, Forest and Climate Change amended the 2023 guidelines issued under the Van (Sanrakshan Evam Samvardhan) Adhiniyam, the law formerly known as the Forest Conservation Act.

The amendment reclassifies certain plantation and afforestation activities on forest land as forestry activities, including when they are undertaken by government or non government entities, provided the activity aligns with an approved working or management plan and remains under the supervision of the state forest department. Where that classification applies, the guidelines state that the requirements of compensatory afforestation and net present value payment shall not apply.

Those two requirements were the principal financial obligations attached to using forest land. Compensatory afforestation requires equivalent land to be afforested elsewhere. Net present value is a payment intended to compensate for ecological services lost over time. Removing both for plantation activity is a substantial change in the economics of forest land, which is why the amendment attracted immediate attention.

Why it is contested

The criticism is not procedural and it deserves to be stated properly rather than dismissed.

A plantation is not the forest it replaces. A stand of one or a few commercially useful species carries a fraction of the biodiversity of a natural forest, supports different soil biology, and holds carbon differently. Treating plantation as a forestry activity on forest land means the two can be exchanged administratively in a way they cannot be exchanged ecologically.

Compensatory afforestation and net present value were the mechanisms that made this exchange expensive, and expense was doing protective work. Remove the cost and the volume of conversion is likely to rise. Critics have argued that this opens natural forest to commercial planting with the financial and ecological safeguards removed, and that concern follows directly from the structure of the change rather than from its politics.

There is a second concern about how it interacts with the rights of forest dwelling communities, whose claims and use of forest land are governed by separate law and are not extinguished by a reclassification of activity.

Why we are not building on it

This amendment appears to open exactly the door a company like ours would want. We are choosing not to walk through it, and the reasoning is worth setting out because it explains how we assess opportunity generally.

It is new and likely to be litigated. Indian forest law carries decades of judicial supervision, and changes of this significance are routinely challenged. A twenty to thirty year lease is only worth what remains enforceable in year fifteen. Building a business on a rule that is eight months old and actively contested means accepting that the ground under the asset may move.

The criticism is substantially correct. We restore degraded land. Converting natural forest to plantation is a different activity, and one where our presence would make things worse rather than better. A company that says degradation is the problem should not solve its land supply problem by planting over forest.

Degraded land is the larger opportunity anyway. India has an enormous area of degraded, barren and wasteland with clearer title, fewer competing claims and far less litigation risk. Restoring it adds ecological value where there is currently very little, rather than substituting one ecosystem for another. It is also cheaper to lease, which matters when a block must be held for two decades.

So our position is that forest land is an option we are aware of and are not exercising. If the rules settle and a specific case arises where planting genuinely restores rather than replaces, that can be revisited on its merits. It is not the foundation of anything we are building.

What this means if you are assessing a proposal

If someone presents you a land based project that depends on this amendment, three questions are worth asking.

Is the land degraded or is it standing forest. The amendment covers forest land, and the ecological case is completely different depending on which one is actually involved.

What happens to the project if the guidelines are amended again or stayed. A project whose economics collapse without this specific provision is carrying regulatory risk that should be priced rather than ignored.

What does the working or management plan actually permit, and who supervises it. The supervision requirement did not disappear, and a proposal that does not mention it has either not read the guidelines or is not planning to comply with them.

Our own approach to which land we take, and the terms we require in a lease, is set out on the land restoration page.

Forest law and its guidelines change, and this amendment is recent and contested. Confirm the current position and any judicial developments before relying on this page.

Related questions

What is net present value in forest clearance?

Net present value is a payment charged when forest land is diverted to non forest use, intended to compensate for the ecological services the forest would have provided over time. Along with compensatory afforestation, which requires equivalent land to be afforested elsewhere, it has been the main financial obligation attached to using forest land.

Does this mean anyone can plant on forest land now?

No. The activity has to align with an approved working or management plan and remain under state forest department supervision. What changed is the classification of the activity and the financial obligations attached to it, not the removal of state control over forest land.

Why is the amendment controversial?

Because compensatory afforestation and net present value were the two mechanisms that made using forest land financially costly, and removing them for plantation activity lowers the barrier to converting natural forest into planted stands. Critics argue a plantation is not ecologically equivalent to the forest it replaces, and that the safeguards removed were the ones doing the protective work.