Free Trade: Australia Placed to Meet India’s Timber Demand

Wed 05 Jul 23


Australian Agriculture and Forestry Minister Murray Watt is leading a trade delegation to India as both countries push for greater trade ties. 

The delegation, which includes 12 agribusiness representatives, will spend three days in Delhi and Mumbai, meeting with the Indian government, business and industry leaders.

Minister Watt will be holding several high-level meetings with Indian Government Ministers across the week.

“It’s no secret that Australia and India share a wonderful relationship,” Minister Watt said.

“And we are seeing that relationship develops into better agricultural trade relationships.

In December 2022, the Australian and Indian governments entered a Free Trade Agreement known as the Australia-India Economic Cooperation and Trade Agreement (AI-ETCA), a stepping-stone towards a full Australia-India Comprehensive Economic Cooperation Agreement (CECA). 

Footage courtesy of @SansadTV
All tariffs on forest and wood products to be eliminated over six years

Under the AI-ETCA, both countries will eliminate 20% of tariffs on forest and wood products and 15% on sandalwood chips over six years.

“In the first six months of Australia’s Free Trade Agreement with India, Australian businesses have benefitted from lower tariffs on more than $12 billion in exports,” Minister Watt said.

Last month, Wood Central reported that India has emerged as a booming market for Australian softwoods. 

Data obtained from IndustryEdge, identified that 91% of the 144 thousand cubic meters (k m3) total exports for April 2023 ended up in India.

According to data obtained by IndustryEdge, Australian exports of softwoods spiked to a 23-month high on the back of a surge in Indian softwood exports.

Wood Central has previously reported that India’s demand for roundwood to increase by 70% over the next decade, from 57 million cubic meters in 2020 to 98 million cubic meters in 2030 – primarily driven by the surge in the Indian construction sector.

An industry authority in South Australia says the export of domestic logs has been going on for some time, with volumes arriving at Victoria’s Port of Portland at 2000 tonnes a week.

“The magnet for this resource is surely India,” he said.

In April, Wood Central exclusively reported on the 2000 tonnes a cubic metre of timber leaving Australian ports per week.
In April, Wood Central exclusively reported on the 2000 tonnes of cubic metres of timber leaving Australian ports per week.

According to Minister Watt, the CECA aims to go beyond AI-ECTA, further improving market access for Australian agricultural commodities under AI-ECTA and securing positive outcomes for products not covered under the initial agreement. 

The visit will help build momentum for the next CECA negotiating round this month.

“India is a rapidly rising economic power,” Minister Watt said.

“The size and scale of this market mean it is a key diversification opportunity for Australian agriculture and food commodity exports as we respond to global trade challenges.”

“Through the Agricultural Trade and Market Access Cooperation grants program, the government is also supporting industry-driven projects aimed at expanding and diversifying markets for sectors impacted by global trade disruptions.”

Surging Indian demand provides opportunities for exporters

The opportunities for the Australian and New Zealand forest and wood product industries are endless.

Although India’s forest cover has increased steadily for nearly two decades, timber production is substantially less than consumption, and imports are meeting an increasingly large proportion of demand.

The substantial increase in wood consumption in India by 2030 is exacerbated by an existing shortfall between wood production and demand and increasing the country’s reliance on wood imports, according to the ITTO.

Demand for housing drives India’s skyrocketing real estate market in the post-pandemic world. Footage courtesy of @livemint

As reported by Wood Central last month, the Indian housing market has emerged as a highly lucrative investment market, with Indian investors capitalising on the push for larger dwellings.

“We have seen an exponential rise in the demand for bigger homes (2, 2.5, or 3 bedrooms), with clear demarcation between work and living areas. Work-from-home became a norm during the pandemic, and this trend is likely to continue as millennials explore possibilities to work remotely, either part or full-time,” according to Keki Mistry, chief executive of India’s Housing Development Finance Corporation.

Beyond housing, the market for wooden pallets could provide a lucrative market for exporters. 

According to the 2022 imarc report, the pallet market is expected to grow from 194 million units in 2022 to 293 million units in 2038 – representing a growth rate of 6.9% per annum.


  • Wood Central

    Wood Central is Australia’s first and only dedicated platform covering wood-based media across all digital platforms. Our vision is to develop an integrated platform for media, events, education, and products that connect, inform, and inspire the people and organisations who work in and promote forestry, timber, and fibre.


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