Why this is important to Wisconsin businesses: Wisconsin’s forest products industry could benefit from increased imports of wood to India.
According to the American Hardwood Export Council, 2019 was a record year for U.S. hardwood exports to India, with the value of hardwood lumber and veneer exports totaling $6.5 million USD. The statistics were compiled from the latest data released by the U.S. Department of Agriculture and announced during the India Wood trade show in February 2020. However, the wood and furniture industry in India has been hit hard by the COVID-19 pandemic since then.
The nationwide lockdown in April-May 2020 disrupted the supply chain. There were shortages of raw materials, reduced demand due to a slowdown in the real estate and construction sector, and a sharp decline in export orders from Europe and other Western markets for India’s handicraft and wood furniture. All of this has affected the Indian wood industry.
India has a centuries-old tradition of wood use, particularly for interior design and furniture. Most wood used in India is hardwood, particularly teak, which accounts for approximately 50% of domestic consumption. There are limited supplies of other species such as sal, eucalyptus and deodar.
India is a timber-deficient country. There is a growing pressure on forestland in India due to the ever-increasing population. The forest continues to decrease while the demand for timber increases.
India is traditionally a tropical hardwood market; however, log export restrictions in Myanmar, Malaysia and other tropical countries have forced Indian manufacturers to look for alternate wood supply sources.
Logs used to dominate Indian imports, but the share of log imports has come down from 83% in 2007 to 48% in 2018. The share of U.S. lumber in total exports to India has risen from 3% in 2007 to 42% in 2018. There is a shift taking place in imported hardwoods from logs to lumber.
India imports small quantities of temperate hardwoods such as ash, maple, cherry, oak, walnut and beech for commercial and home interiors and furniture, some of which is made for export. Major imported wood species are meranti, teak and pine.
India’s domestic furniture sector is valued at nearly $10 billion USD. Wood accounts for nearly 65% of all furniture made in India.
The popularity of traditional furniture has strengthened the demand for wood in the manufacturing of furniture in India. In addition, the demand for engineered wood furniture is rising with the increasing popularity of ready-to-assemble home furniture. The availability of engineered wood furniture through various distribution channels makes it easy for customers to buy these products.
According to a GAIN (Global Agricultural Information Network) research report, India remains a key potential market for imported hardwood and softwood logs, lumber and veneer, including American species, but progress in market development is slow, and that trend is likely to continue due to the ongoing pandemic.
