India’s plywood market size reached INR 222.3 Billion in FY 2023-24. The market to reach INR 372.5 Billion by FY 2032-33, exhibiting a growth rate (CAGR) of 5.7% during FY 2024-25 to FY 2032-33. The growing number of distribution networks and exclusive outlets of premium furniture, increasing demand for easy-to-assemble and light weight furniture, and rising number of government housing schemes and infrastructural projects represent some of the key factors driving the market.

At present, the increasing demand for plywood due to the growing number of distribution networks and exclusive outlets of premium furniture manufacturers represents one of the primary factors influencing the market positively in India. Besides this, the rising integration of technologically advanced production methods to manufacture plywood with improved features, such as flexible plywood, is propelling the growth of the market. In addition, the growing utilization of plywood for making partitions and false ceilings in houses and office spaces is offering a favorable market outlook in the country. Apart from this, the increasing employment of plywood in manufacturing various easy-to-assemble and lightweight furniture is contributing to the growth of the market. Additionally, the rising production of various do-it-yourself (DIY) projects from plywood, which can be easily drilled, shaped, and cut according to specific requirements, is supporting the growth of the market in India. Moreover, the increasing number of government housing schemes and infrastructural projects, coupled with rising urban settlements in the country, is bolstering the growth of the market. Furthermore, the increasing renovation and infrastructure development activities among homeowners, along with the growing preferences of individuals to incorporate unique accents in their interior designs, are catalyzing the demand for plywood in India.

Saharanpur, Uttar Pradesh

Saharanpur’s artisans have upheld the legacy of creating intricate, handcrafted wooden furniture that has earned acclaim both nationally and internationally. Saharanpur’s wooden furniture is characterized by its exquisite designs, meticulous carvings, and the skilled use of materials. The furniture often boasts elaborate floral motifs, geometric patterns, and fine inlays that showcase the mastery of the artisans. The craftsmanship reflects a blend of traditional Indian designs infused with a touch of Mughal and Persian influences, resulting in pieces that exude opulence and elegance.

One of the standout features of Saharanpur’s furniture is its craftsmanship in woodcarving, particularly its emphasis on intricate lattice work, known as ‘Jaali’ or ‘Jali.’ The delicate designs create a play of light and shadows, adding a unique charm to the furniture pieces. Tables, chairs, cabinets, and decorative items exhibit this signature style, making them sought after for their exquisite beauty.

Saharanpur is home to a multitude of skilled artisans and workshops that have sustained the city’s reputation for fine woodworking. Families and communities dedicated to this craft have preserved the traditional techniques and passed them down through apprenticeships and training within their ateliers.

Artisans such as the Mohammadi Art Wood have gained recognition for their intricate carvings and inlay work. Similarly, workshops like the Khushal Handicrafts have been instrumental in keeping the legacy alive, creating a wide array of furniture items that blend traditional designs with modern utility.

The intricate craftsmanship and distinctive styles of furniture produced in Saharanpur continue to captivate admirers and collectors worldwide, showcasing the timeless beauty and expertise of Indian woodworking. The city stands as a testament to the enduring artistry and dedication of artisans committed to preserving and evolving their craft.

Tamil Nadu

Tamil Nadu is well-positioned to become a hub for furniture production and exports as global companies seek alternatives to China. The state has skilled manpower and access to ports, along with a rising domestic demand. The Indian furniture market is valued at $32 billion, with a growth rate of 20%-25%. The government is reaching out to both domestic and overseas furniture manufacturers to establish facilities, with a priority for the international furniture park at Tuticorin. The park aims to create a better ecosystem, reduce production costs, and increase competitiveness in the sector.

Tamil Nadu can transform into a hub for furniture production and exports as global companies are aggressively pursuing the ‘China plus one policy’, exploring alternatives to China. Government and industry sources are upbeat about the state’s prospects given its skilled manpower and access to ports.

• India’s total trade for Plywood and Allied Products have reached to US$ 3363.64 million during 2022-23. India’s exports of Plywood and Allied Products are US$ 1440.02 million during 2022-23.  An Imports of Plywood and Allied Products into India have reached to US$ 1923.62 Million in 2022-23.

• India’s total trade for Wooden Furniture have reached to US$ 1024.7 million during 2022-23. India’s exports of Wooden Furniture are US$ 772.01 million during 2022-23.  An Imports of Wooden Furniture into India have reached to US$ 252.69 Million in 2022-23.
• The major markets for India to export Furniture are U S A, Netherland, Germany, U K, France etc.

Kind of support would be needed by the industry to become a self reliant country on Wooden Furniture products which we import and able to provide the product at competitive rates as offered by other countries.

Wood products are environmentally superior to other variants made from metals, plastics and cement as these are recyclable, energy efficient and reduce greenhouse gases. Existing forest policies, laws and national forestry programmes in India are to promote sustainable forest management, biodiversity conservation, and to restrict uncontrolled wood logging.  India’s annual import of logs (HS Codes 4403) reached to US$ 909.18 million during 2019-29.  Limited domestic and overseas supplies, coupled with booming retail furniture, rapid urbanisation, increase in exports, handicraft and hospitality sectors is driving demand for newer species.

Agro – forestry wood raised by the farmers  is available in substantial quantity but mostly used  by plywood and other composite products manufacturing industries such as MDF, particle boards etc These agro forestry wood are harvested  at 4-5 years rotations and are not suitable as furniture wood.

In India current readymade furniture industry is very small in terms of domestic market share   and exports due to limitations in easy and affordable availability of raw material (wood).  Unless the raw material availability is made easy and affordable, the market cannot grow.  Lot of furniture that is in demand in export markets is made using  imported hardwoods and soft wood like oak, ash, sapeli, Teaks. The biggest furniture exporting countries in the world are importing woods from and exporting furniture back to western countries.

In order to protect the domestic MSME industries, the government should allow only the duty free import of woods which are not available domestically and are used in manufacturing panel products, furniture components for manufacturing wood products for domestic and export purposes. 

It is not correct to presume that MSMEs cannot import logs due to associated costs. Lot of MSMEs are quite organised and would already be importing few other things required by them. Adding one more products – wooden logs, would not be difficult for them. If their costs reduce significantly by importing, they will definitely go for it or find out a way for doing so. And if import of wooden logs is in OGL, then some traders would be importing it in any case. They will continue to do so, and the benefit of zero duty will reduce the landed cost of wooden logs, to the importer trader and consequently to the MSMEs who can buy wooden logs from such importer traders. So assuming that MSMEs will not be benefited due to Zero Duty on import of wooden logs, is misplaced.

Yes, there is substantial manufacturing of Engineered Wood including MDF Board, Particle Board, etc. in the country. However, Round Logs & Rough Square Logs of Wood are not competing products for this industry. In fact, Logs are the basic raw material of this industry. Logs have to be chipped and processed to convert it in to Fibre / Chips for mfg. MDF and PB. So reduction in BCD on Wood logs will reduce the cost of raw material for the Engineered Wood industry in the country and making them more competitive. It would be beneficial and not adverse for Engineered Wood Industry.

You may be aware that as part of Atma Nirbhar Bharat, the government has identified furniture to make India a self-reliant country and a global supplier. A self-reliant India will ensure production of quality products on a large scale, fulfill India’s requirements and boost export of surplus production. Furniture is a Rs 20-lakh crore global market and out of this, the Indian industry can look at tapping Rs 3-4 lakh crore market as it can help generate employment for about 20-25 lakh people. This will be possible only India get sufficient and regular logs at 0% duty.  

Currently, import of logs into India attracts 5% import duty and this should be reduced to 0% to make the Indian wood industry competitive.

Scheme Requirement for Furniture Wood Sector in line with Indian Footwear, Leather & Accessories Development Programme (IFLADP)

In view of Furniture Wood Sector immense potential for growth prospects and employment generation capabilities, the Govt. of India need to identify this sector as one of the focus sectors under the Make in India initiative. The sector being an employment intensive sector is providing employment opportunities to about 3 million people mostly in the weaker sections of the society.

The Government of India has approved special package of Rs. 2600 Crores for Leather Sector for 3-year period 2017-2020. 

The Capexil hereby request the Government to extend similar package to the Furniture Wood Sector also as it is extremely critical and vital for expanding & modernizing the production capacities in the sector, environment management in the furniture industry, and establishment of Greenfield mega clusters besides human resources development. Most importantly, the package would generate more employment opportunities in the sector. 

One of the most important scheme under IFLADP is IDLS Scheme, which provide investment grant to manufacturing units in all segments of the leather industry to build up capacities, technology up-gradation/ modernization and/or expansion and setting up of new units.   The financial assistance under the Scheme will be to the extent of 30% of cost of plant and machinery for Micro, Small and Medium enterprises and 20% of cost of plant and machinery for other units like in the XII Plan, but the ceiling amount to Rs.3 Crore for each product line. This will be highly beneficial to the Furniture sector, and it is expected that this will motivate and encourage the industry to go in for aggressive modernization and expansion of production units, which is very vital for increasing the production and turnover of the industry.

Another proposal to establish a Mega Furniture Cluster. These are very important activities to boost the manufacturing capacities in the country and funding support under IFLADP @ 50% of the project cost subject to ceilings based on land size, maximum of Rs.125 Crores for land area more than 151 acres, is very much essential and would help creation of new greenfield clusters. The mega clusters will assist the entrepreneurs to set up world-class units with modern infrastructure, latest technology, and adequate training and HRD inputs. Establishment of Mega Furniture Clusters would help in creating additional employment opportunities, particularly for the weaker sections of society.

Another important scheme announced is for promotion of Indian Brands, for which funding support would be provided for creation of 10 Indian Brands in the international market during the next 3 years with maximum assistance of Rs.3 Crore per brand per year. India need to definitely move up in branding and create brands and effectively promote the same in the International market. The special package also includes measures for simplification of labour laws and incentives for employment generation.

Incentivize Agro forestry in India  

It is time to include farmers into the national growth story and accelerate our efforts towards doubling their income. Agro forestry produces food, fuel and fiber, contributes to nutritional security, sustains livelihoods, helps prevent deforestation, increases biodiversity, protects water resources and reduces erosion.

Agro forestry is currently practiced in India, but its potential is far greater. Already an estimated 80 per cent of the country’s timber and almost half of its fuel wood come from trees grown on farms.  It makes economic – and ecologic – sense for the Indian farmer to tap into this market.

Why do we want to import timber in large quantity every year when we can simply allow our farmers to grow them on their farms and buy from them? It will have a huge positive impact on the foreign exchange. These trees will act as insurance during exigencies for the farmer, reducing dependence on high-interest loans that he is unable to repay driving him into debt and death.  By planting high-value trees on a portion of their farmland along with their existing crop, farmers will have a lucrative additional source of income. They’ll also put back the trees in the right place at the right time.

Further, legislation that is currently unfavourable to agro forestry has to amend through the policy.  Also regulations that relate to agro forestry should be simplified such as those relating to land revenue & felling and transportation of trees.  Also provide incentives to farmers, insurance schemes and great access to markets for agro forestry products. Unless farmers can earn from such an activity, why would they want to plant trees?  Therefore, promote agro forestry as AN economic plan with a profound ecological impact addressing soil health, water sequestration, farmer economics & biodiversity revival all in one go.

Agro forestry is also viewed as a means to reduce rural unemployment.  The climate change mitigation and adaptation benefits of agro forestry are also a significant driving force behind the policy.  Therefore, we must encourage participation of industries in agro forestry.  As land-holding size is shrinking, combining tree farming with agriculture is the only way to optimize farm productivity.  Agro forestry intervention can be a potent instrument to help to achieve sustained growth in agriculture.

Reduction of value addition in Sawn Timber exports should be reduced from 30% to 15% in line with Advance Authorisation Scheme/DEEC Scheme

Reduction of value addition in Sawn Timber exports should be reduced from 30% to 15% in line with Advance Authorisation Scheme/DEEC Scheme.  This 30% was fixed, when then the DEEC scheme carried the VA @ 30%. Now at present the DEEC or say AA scheme carries VA @ 15%. Therefore, the VA needs to be revised to 15% in par with the AA scheme. Further, this causes the diversion of business to competing countries like Singapore or China. Though these countries do not grow the logs, but still compete with India in global market as these countries do not have such restrictions.

To face this competition strongly, the Value addition needs to be in par with the other products, i.e. at the rate of 15%. This will surely increase the export volume for the country. Please note that this industry is mainly located in the rural area & has been providing the much need employment to skilled & semi-skilled persons at rural & semi urban areas. With the increase in the export, the level of the employment generation too is going to go up.

Re-export of the imported sawn timbers should be allowed freely

Re-export of the imported sawn timbers should be allowed freely. More and more countries globally are resorting to export of value added products, due to this; it is not possible to get the quality raw logs for the export productions.

To maintain the continuity of the export & to maintain the continuous export with the existing buyers, imported Sawn timbers should be allowed to be freely exported. The sawn timbers at present are allowed to be imported freely.

The reconstituted veneer blocks used for producing veneer and decorative Veneer should also be allowed to be imported duty free.

The reconstituted veneer blocks used for producing veneer and decorative Veneer should also be allowed to be imported duty free. This falls under head 4408. The Veneer from these blocks is used extensively in furniture manufacturing the world over due to easy, cheap and environment friendliness of this kind of wood.

Alternative fumigation methods other than Methyl Bromide and abolish the penalty levied in India

As a signatory to Montreal protocol, the government should encourage and accept the use of alternative fumigation methods other than methyl bromide for treating logs which are imported into country.  In order to become competitive by the wood working industry, abolish the penalty levied in India when logs are imported with phyto sanitary fumigation treatment other than with methyl bromide. According to current government mandate, these   logs are again need to be treated with methyl bromide in India on arrival. Hence the importer pays dual charges for fumigation at origin as well as destination along with heavy penalty due to this law. Methyl bromide treatment is being discouraged the world over now. Most of the European countries have banned it due to environmental concerns.