New Policy Risks Forest Clearing Being Counted as a Green Activity

From the Editor’s Desk

January 10, 2026

The Union environment ministry has issued a directive allowing both private and government entities to lease forest land for afforestation and timber projects without paying the environmental compensation charges that were meant to discourage ecological loss. While afforestation can help restore damaged ecosystems when done with native species, it can also involve commercial plantations that offer little ecological value. The new policy risks treating forest clearing as an environmental contribution, even when it replaces complex ecosystems with single-species plantations.

Under the directive, commercial plantations have been classified as “forestry activities,” which means they are now exempt from environmental compensation charges, as long as the project follows an approved plan and is supervised by the state forest department, as reported by Hindustan Times.

There are reason to be seriously concerned about this move for several reasons.

First, exempting these projects from compensatory payments removes a key disincentive for diverting forest land. Net Present Value (NPV) fees, which form part of these payments, are meant to offset the loss of environmental services such as clean air, water, carbon storage and soil conservation when forests are cleared for other uses. These losses are not easy to fix. Assuming that commercial plantations can make up for them ignores a basic fact. Natural forests support a wide range of plants, animals and environmental processes that commercial plantations cannot replace. For example, a teak or eucalyptus plantation may grow quickly and provide timber, but it does not support the same insects, birds or water systems that a native mixed forest does.

A recent India State of Forest Report (ISFR) has underlined this concern. Between 2021 and 2023, India lost 3,656 square kilometres of dense forests, even though the report showed a net gain in overall forest and tree cover. Forest cover includes areas of at least one hectare with tree growth, while tree cover refers to smaller fragments. Combining the two can hide the disappearance of ecologically valuable forests behind what looks like an overall increase.

Second, calling commercial timber and afforestation projects “forestry activities” is misleading and confusing for anyone who assumes that more trees automatically means more forest. Many of these projects involve fast-growing, single-species plantations like eucalyptus, acacia or teak. These trees are chosen because they grow quickly and are useful for timber, pulp or oil. But a real forest is much more than a cluster of tall trees. It includes many kinds of plants, birds, insects and animals that live in balance with each other and with the land. The soil in a natural forest is rich and alive, holding water, storing carbon and supporting growth across seasons. In contrast, a plantation of eucalyptus trees may draw large amounts of water from the ground, support little life under its canopy and leave the soil poorer over time.

The result may look green from a distance, but it does not act like a forest. It is more like a farm of trees, meant for harvesting. By calling such projects “forestry,” the policy creates the impression that forest cover is growing, when in fact these projects can replace diverse ecosystems with lifeless monocultures. 

It’s like replacing a local wetland with a golf course and claiming that water systems have been protected, simply because grass still grows there.

Third, this decision removes a key layer of protection that was meant to prevent careless or hasty use of forest land. Until now, any project that involved commercial plantations was treated as a non-forest activity. That meant it needed separate approval from the central government, which served as a checkpoint to ensure the land was not being diverted without serious review. This was especially important in cases where the forest might be home to wildlife, used by local communities, or play a role in maintaining rivers and rainfall patterns.

Now, with that layer removed, state governments can approve these projects on their own, based on internal plans and guidelines. In a country like India, where land is contested, political influence is strong and regulatory enforcement is uneven, this gives powerful actors easier access to forest land. Companies that want timber or land for plantations can now strike deals with state authorities more easily, without having to pass through stricter national scrutiny.

It’s like unlocking the back door to public forests, allowing private profits to take priority over public interest, with very little oversight.

The move is part of a larger shift in how forest land is being treated, especially through schemes like the Green Credit Programme, a government initiative that awards tradable credits (which can be bought or sold in a market by individuals or companies to meet environmental goals or regulatory requirements) to individuals or entities for undertaking approved environmental activities, such as tree planting or water conservation, as a way to promote market-based incentives for ecological restoration. In theory, they can encourage restoration. But in practice, as critics of the Green Credit Programme have noted, these schemes are increasingly being used to give private companies easier access to public forest land under the label of afforestation.

What looks like an environmental project on paper can end up being a timber or pulpwood business in reality. For instance, a company may receive credit for planting trees on degraded forest land, but the species planted might be chosen only for fast growth and commercial value, not for restoring local ecology. Once planted, these trees are harvested in a few years, and the cycle repeats. The forest does not recover. Communities that depend on the land for fuel, fodder or water have no role in the process and no say in how the land is used.

Instead of restoring forests based on ecological knowledge and participation from local people, the land becomes a resource bank for industries that want cheap access to plantation space. The forest, which must be seen as a shared and living system, becomes a tradable asset.

Further, there is little clarity on how these projects will affect the rights of forest-dwelling communities. The Forest Rights Act, 2006, recognises the historical claims and custodianship of tribal, or Adivasi, and other traditional forest users. Leasing forest land to external actors without a proper process of free, prior and informed consent could lead to violations of these rights, conflict on the ground and further marginalisation of forest-dependent populations.

The policy reduces forests to timber-yielding plots rather than recognising them as complex ecological and social systems. That should worry anyone concerned with environmental integrity and justice.

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