Forests As Economic Infrastructure

March 25, 2026

C R Pani

We have arrived at a critical juncture where the global community must reconcile economic development with ecological sustainability. Forests offer multifaceted contributions to economic growth and livelihoods, both in India and in other countries. Sustainable forest management represents not a trade-off but a synergistic pathway to economic resilience, climate stability, and inclusive growth.

Forests have long been recognised as the lungs of our planet, but their role as engines of economic prosperity remains systematically undervalued in national accounts and policy frameworks. As the world observed the International Day of Forests recently, the theme Forests and Economies invited a fundamental reassessment of how forests contribute to growth, employment, and resilience across scales—from local forest-dependent communities to global supply chains.

The urgency of this reassessment cannot be overstated. Recent research from the International Union of Forest Research Organizations (IUFRO) warns of “The Humpty Dumpty Effect”—the irreversible collapse of forest socio-ecological systems when pushed beyond recovery thresholds. As Craig Allen, Resilience Scientist at the University of Nebraska–Lincoln in the United States, cautions: “It’s not just the trees that fall—it’s a whole web of relationships between species, soil, water, and people that unravels. Once disrupted, these relationships can’t simply be ‘replanted’.”

We are trying to examines the economic dimensions of forests through a dual lens: the international context where forests contribute trillions to global GDP, and the Indian context where forest-based livelihoods sustain hundreds of millions of people.
The economic contribution of forests extends far beyond timber extraction. According to CITES Secretary-General Ivonne Higuero’s 2026 World Forest Day message, over half of the world’s GDP depends on nature, including forests. This staggering figure reflects the foundational role forests play across multiple economic sectors: agriculture relies on forest-mediated rainfall, water systems depend on forest watersheds, and industries utilise forest-derived raw materials.

A ground-breaking study from the University of Leeds, published in February 2026, has quantified one of forests’ least recognised economic services: rainfall generation. The research reveals that each hectare of tropical forest generates 2.4 million litres of rainfall annually—enough to fill an Olympic-sized swimming pool. In the Brazilian Amazon alone, this rainfall generation service is valued at roughly $20 billion annually to regional agriculture. As lead author Jess Baker notes, “Demonstrating the financial benefits that tropical forests provide will unlock investment and strengthen arguments for forest protection.”

Forests support the livelihoods of more than 1.6 billion people globally, providing subsistence resources, employment, and income. In Indonesia, one of the world’s largest tropical forest nations, recent analysis published in Trees, Forests and People shows that the agriculture, forestry, and fisheries sector absorbs approximately 28 per cent of the national workforce—the largest share of any economic sector. However, the study reveals critical vulnerabilities: over 65 per cent of forestry workers in Indonesia are informal workers, lacking access to financial services and facing heightened food insecurity.

The global forestry workforce faces additional challenges. The International Labor Organization notes that most forestry workers are in informal or subsistence-based jobs, making them highly vulnerable to production shocks and policy changes.
India’s forests are not merely environmental assets; they are the economic backbone for millions of rural households, particularly tribal communities. According to data from TRIFED (Tribal Cooperative Marketing Development Federation of India), an estimated 100 million people derive their livelihood directly from the collection and marketing of Minor Forest Produce (MFP). A World Bank estimate cited in TRIFED’s documentation suggests that the MFP economy supports close to 275 million people in rural India. (Courtesy: DTE)