India's Forests Valued at $2.5 Trillion Annually, Yet Uncounted in National Accounts
A new peer-reviewed study has for the first time placed a comprehensive monetary value on the ecosystem services provided by India's forests. The research, published in the journal Environmental and Sustainability Indicators, estimates that India's forests deliver benefits worth approximately $2.5 trillion every year — equivalent to nearly two-thirds of the country's formal GDP in 2023 ($3.7 trillion).
The study, led by M Balasubramanian of the Institute for Social and Economic Change (ISEC) in collaboration with the Indian Council of Forestry Research and Charles Darwin University in Australia, analyzed 45 valuation studies conducted between 2000 and 2024. Using meta-regression analysis, the researchers standardized all estimates to 2023 US dollar prices and controlled for factors such as GDP per capita, population density, forest cover, ecosystem service type, and valuation method. The model explained 74% of the variation in reported values.
According to the study, India's forests deliver ecosystem services worth an average of $31,001 per hectare per year. Across the country's roughly 827,000 square kilometers of forest and tree cover, this amounts to about $2.5 trillion annually. These services include clean water, pollination, flood control, carbon storage, soil conservation, and medicinal plants — yet none of this value is captured in national economic accounts.
The valuation varies significantly by forest type. Tropical dry deciduous forests, which cover extensive areas of central and peninsular India (nearly 281,000 sq km), contribute the most in absolute terms at approximately $703 billion per year. Their per-hectare value has risen from $22,400 in 2019 to $25,045 in 2023, even as their area has shrunk.
Tropical thorn forests in Rajasthan and the Deccan region have a per-hectare value exceeding $158,000, reflecting their critical role in preventing soil erosion and desertification in arid areas where no alternative vegetation exists. Alpine forests and pastures in the Himalayas are valued at $111,539 per hectare due to their importance in regulating water flows that sustain northern India's agriculture. Mangrove forests, despite being under threat from coastal development, provide services worth $58.5 billion per year, including cyclone buffering and fishery nurseries — as demonstrated by the catastrophic damage of Cyclone Amphan in 2020 when natural defenses were compromised.
The study highlights a paradox: India's forests generate immense invisible wealth, yet they remain undervalued in policy decisions. The government frequently approves the conversion of forest land for mining and infrastructure projects without accounting for the loss of ecosystem services. The researchers argue that integrating natural capital into national accounts could lead to more sustainable land-use decisions.
This research provides a robust framework for valuing forests and underscores the need to recognize their economic significance beyond timber and land value. As India continues to balance development with environmental conservation, such valuations could inform better policymaking and help preserve the natural assets that underpin the nation's long-term prosperity.
