In recent years, the woodworking industry in India has emerged as one of the most rapidly expanding sectors, contributing significantly to the country's economic growth. The organized furniture market has been projected to experience an annual growth rate of approximately 20%, and the import of wood and wood products has played a pivotal role in sustaining this momentum. With imports valued at over 5 billion USD by the end of the fiscal year 2022, as per Statista data, the significance of the timber trade in India cannot be underestimated.
India's Timber Boom & Finnish Sawmills' Prospects
In the year 2021, India imported 3 million m3 total volume worth 500 million USD value of softwood logs and timber, out of this $137m was sawn wood. In the grand tapestry of global trade, India holds a distinct position as an emerging economic powerhouse, with a notable GDP growth rate of 6.1% in the first quarter of 2023. Propelled by its participation in international forums such as the G20 and various bilateral trade agreements, India is poised to ascend to a 5 trillion dollar economy by 2025/6 and 7 trillion by 2030.
The burgeoning demand for wood in India is underscored by statistics indicating annual log imports of 3.3 million cubic meters and timber imports of 1.5 million cubic meters, as per ITTO (International Tropical Timber Organisation). Fueling this demand is India's construction industry, a vital contributor to the nation's GDP. A report by ITTO highlights that India's wood consumption is anticipated to surge by 70% in the coming decade, primarily driven by the construction sector. Furthermore, the meteoric rise of the Indian furniture industry is predicted to reach a market value of USD 37 billion by 2026, thus perpetuating the need for a steady supply of timber.
“India is already huge but at the same time a growing market. Finnish sawmills export sawn timber to over 70 countries but export to India hasn’t opened yet. We’re excited to explore the opportunities in India and to be able to establish connections and partnerships with local industry representatives.” - Johanna Autio, Business Manager, WOOD FROM FINLAND LTD
Reflecting on the past two decades, the data reveals an intriguing trend in timber imports from Finland to India. While there was a notable spike in 2018, the years 2020 and 2021 stand out as prosperous periods. Recognizing the potential to sustain and enhance this upward trajectory, a delegation tour between India and Finland is on the horizon. India has shown keen interest in engaging in discussions, potentially with Sweden. This favourable context makes it readily opportune for Finland to initiate a business conversation as well.
Fostering Timber Ties- The Delegation Trip
The delegation tour, an intricately planned program, presents a unique opportunity for Finnish sawmillers to establish connections with Indian timber importers and policymakers. The paramount objective is to foster collaboration between timber federations and their respective members in Finland and India, thus catalyzing the growth of Finland's timber exports to India.
Central to the itinerary is engagement with the National Timber Federation of India, and Wood from Finland Association, both are pivotal players in the timber sector. By aligning with this influential body, trade barriers, risks and opportunities faced by Indian timber importers, including quality assurance, trade remedies, and payment concerns, can be collectively addressed. The ensuing partnership will serve to fortify bonds between Finnish sawmillers and Indian importers, ushering in an era of harmonious trade relations.
Johanna goes on to state, “We want to learn more about the end uses of sawn softwood in India and also talk about the superiority of Finnish wood raw-material and sawn timber compared to other soft wood types.”
A highlight of the tour is the anticipated round-table discussion. With representatives from the Federation and top Indian importers in attendance, this discourse offers fertile ground for networking and potentially exploring the prospect of a Free Trade Agreement (FTA) on timber trade between India and Finland.
The delegation's B2B matchmaking endeavor, holds promise for generating business opportunities that can elevate trade relations between Indian importers and Finnish delegates.
An expedition to the Gandhidham Timber Hub in Kandla, Gujarat, marks a significant juncture in the tour. This hub is the epicenter of India's international timber trade, housing the headquarters or branches of numerous leading timber trading companies. Meeting with these industry leaders has the potential to expedite timber export opportunities, contributing to the expedition's overarching goal.
Johanna adds on, “The use of sawn softwood compared to the size of India market is still quite modest, but we believe that the wood industry sector will grow in India in nearby future, hand in hand with the economic growth. That’ll increase the demand of sawn timber rapidly. We realize that the market entry is essential to do now, so Wood from Finland will already be a known name when the growth in demand starts.”
The Finland-India Timber Delegation Trip is poised to spark the timber trade between these two nations. Through engagement with key stakeholders, participation in trade events, and strategic networking, this tour holds the promise of reinforcing an enduring partnership and propelling both nations toward mutually beneficial economic growth. The tour is not merely an event but a stepping stone for success.
