India has emerged as one of the United States’ most important export markets, with 116,000 cubic metres of softwoods shipped from the US’s West Coast to India last year alone.
Already its fastest-growing hardwood market, the US is now capitalising on India’s booming construction industry, growing more than 13% last quarter (from 7% the quarter before) – making up for a drop in Chinese demand.
Last year, Wood Central reported that Indian demand for Roundwood will grow 70%, from 57 million cubic metres in 2020 to 98 million cubic metres in 2030, driven to a large degree by a surge in construction activity.
According to the Indian Centre for Science and Environment, the country’s 2022 demand for timber was 63 million cubic metres – 30 million cubic metres for domestic production and 33 million cubic metres from imported sources.
The race to make up the shortfall has seen India compete with China to become the world’s largest consumer market for structural timbers, with the Modi Government grappling with a 19 million unit shortage in housing, which will double over the next five years.
Turning to Australia, New Zealand, Canada, the United States, Brazil and even Uruguay, Indian importers are now dominating export orders, with Wood Central reporting that more than 91% of softwood leaving Australian shores arrived in India in April.
And that demand is expected to stay strong for years, with India’s increasingly confident developers speculating that the country is in the initial stages of a housing growth cycle.
“The housing market will perform well for another three to four years (at least),” according to Sanjeev Jain, the managing director at Parsvnath Developers, adding that property sales in India’s seven largest cities, including Mumbai, New Delhi and Bangalore, rocked 36% in the July-September quarter to 112,000 units.
“First-time buyers drive the home sales, and nearly 80% of the houses have been bought by end users,” according to Prashant Thakur, head of research at Anarock, who revealed to Reuters that there was also strong demand from existing homeowners to move to larger apartments.
“Demand has been (especially) strong in Mumbai despite surging interest rates,” according to Jayesh Rathod, director of Mumbai-based Guardians Real Estate Advisory. Before adding that his company has sold over 5,500 flats in Mumbai and on its outskirts in Thane this year, a jump of more than 50% compared to the same period a year ago.
Also fuelling India’s demand for roundwood is a decision made in 2020 to reverse a 27-year ban on using timber in public buildings.
Last year, Wood Central reported that India’s Ministry of Environment, Forestry and Climate Change (MoEFCC) drove the 2020 decision to lift the ban, citing “a boost for the economy, opportunities to generate jobs and encourage farmers to plant more trees” to make up for a timber and forest deficit.
In the long run, India is investing in a new streamlined transit system for timber and bamboo products, which, along with a new government-backed national standard, is a vital part of Modi’s “Wood is Good: Grow More, Use More” policy.
