In a recent felicitation ceremony organised by the Bamboo Society of India (BSI) and Vidarbha Bamboo Development and Promotion Committee (VBDPC), Union Minister of Road, Transport and Highways, Mr. Nitin Gadkari, made a compelling offer to farmers: “You (farmers) grow Bamboo, I will give you a market” [Times of India, 2023]. The statement serves as an acknowledgement by the government about the policy shortcomings being faced by the Indian bamboo industry for the last two decades. The piece will try to position these shortcomings through a central problem and provide direct and indirect policy measures to address and actively engage with the solutions.
Approximately two decades ago, the planning commission envisioned the Indian bamboo industry as a potential 25,000-30,000 crore industry (estimated in the year 2004). This figure has also been reiterated by the central cabinet minister in a bamboo virtual conference in 2021, while providing assurance to the farmers for the support in product development and promotion from the Ministry of MSME [Economic Times, 2021]. The National Bamboo Mission (NBM), initiated in 2006, was meant to be a catalyst for the industry’s growth. It is a central institution embedded as a sub scheme under the Mission for Integrated Development of Horticulture (MIDH) to allocate financial resources, set priorities & goals, and formalise the national institutional structure for the development of the bamboo value chain. Fast forward to the present, the industry is still striving to develop and stands at a curious crossroad. Despite undertaking dedicated reforms in 2018 by the central government to address potential policy gaps by restructuring NBM, India’s bamboo industry has still failed to match the growth witnessed by its Chinese and global counterparts [NBM Revised Guidelines] [UNCTAD]. For context, the Restructured National Bamboo Mission (RNBM) refocused its strategy on product development, market creation, and waste utilisation, extending well beyond the existing priorities of cultivation and plantation of bamboo.
So, how effective has the NBM been for the growth (or not) of the bamboo industry over the past two decades? Examining international trade provides a uniquely troubling scenario. India, despite having the world’s largest bamboo cover [ISFR 2021] and being the second-largest bamboo producer with nearly 14.6 million MT of harvest in 2019 [NBM Operational Guidelines 2019], still imported 88% of its bamboo raw materials in 2021 [INBAR 2021]. This glaring dichotomy highlights the industry’s dismal condition on both the supply and demand fronts domestically as well as globally. Due to lower productivity and gaps in the supply of raw materials, imported bamboo is being used to cater to the domestic demand as well as manufacture exportable goods. In addition to that, India’s integration in the global value chain of bamboo is also very minimal indicating a vivid supply-demand gap. After a detailed and careful assessment, it is theorised that the domestic bamboo industry grapples with four intertwined challenges, each one hampering its growth potential and needs to be addressed holistically.
First, the bamboo productivity in India is extremely low, indicating low yield cultivation, compared to China which stands at 30-40 tons/ha, in India, it ranges between 1-3 tons/ha with figures only as high as 6-9 tons/ha [NBM Concept Note] [NEDFI Action Plan 2020]. One among many issues are the legal ambiguities on the governance of upstream segments of bamboo across states that have yielded inefficiencies [CCS n.d] [CCS 2013]. These regulatory inconsistencies between states and between states and the central government have further hindered progress. These discrepancies are bamboo species specific and range from transit tariff collection to imposing royalties [MoEFCC 2017].
Second, a significant portion of funds, amounting to more than 50%, allocated to state bamboo missions goes unutilised, within which 55% of the funds are directed solely towards planting and cultivation related activities [NBM Annual Action Plan 2021]. Ironically, despite increased investment in bamboo cultivation, the average annual plantation area has decreased significantly and has gone down from 10,417 (before 2018) to 5,939 (after the restructuring of NBM) [MoA&FW Annual Report].
Third, as the value chain ends up becoming a low policy and funding priority over the years, the development of midstream and endstream segments received limited support and focus, with a majority of sectors still involved in manual labour work for product development [NBM Annual Action Plan]. The industry has primarily focused on low-value-added products with labour-intensive work, resulting in limited profitability, and lower interests from farmers. Additionally, there is a distinct supply-demand gap in the domestic bamboo economy. Estimates suggest that domestic bamboo supply is half the demand in the finished product market. The production figure for bamboo was 14.6 million metric tonnes in 2019, whereas the demand projected was more than 30 million metric tonnes [NEF 2023]. The interesting point is that even by utilising India’s vast bamboo resources, the net output of novel productivity (assuming a yield of 6 tonnes/ha) would still be low, primarily due to limiting non-forest bamboo land and lower yield.
Finally, high waste generation persists due to non-mechanized processing methods and an unskilled labor force, which is further exacerbated by cheap imported raw material from China. Some estimates points the number as high as 40% with 70-80% in sectors like incense sticks [Bamboonomics] [NCDC DPR]. In 2019, The ITC reported that its share of Indian bamboo for its agarbatti manufacturing operations is limited to 5%, implying the majority is sourced through imports [NBM MoM 2019].
Nevertheless, what is the way out of this dichotomy and solutions towards substantially reducing our import dependence from China, which costs us more than 64 million USD annually [INBAR 2021]? And how can the National Bamboo Mission proceed with planning strategic reforms for the industry?
The National Bamboo Mission has been instrumental in curating and crafting the bamboo industry in India since its inception in 2006. Though several factors have influenced the positionality and nature of imaging bamboo as a product, the central goal of reducing import dependence remains consistent. It is crucial to build on this inherent perspective and radically propose reforms in the way the bamboo industry is structured and operates. To address these challenges and reduce dependence on Chinese imports, India must shift its focus from a production-centric model to a demand-centric one. The focus on ‘demand pull’ economic policies can not only provide a direction to the produced goods in the value chain but also provide the impetus for increasing the supply of bamboo.
A robust framework tailored to end-user segments should prioritise high-growth (potential), high-demand (prospective) use cases for bamboo, such as bioethanol, charcoal, and daily-use articles. The focus should be on drafting sectoral strategies, inter-sectoral waste management plans, integrated value chain development, and focusing on MITP, i.e., creating new and accessible market avenues with fair pricing, strategic investments in product development, manufacturing and imports of technologies for processing bamboo & its use in prospective high economic industries and ways for robust partnerships between producers and industries [NEF 2023].
It is also inefficient for the NBM to function as a sub-scheme under MIDH as it tends to push the priorities of the product according to the central mission (MoA&FW Annual Report 2023). Since the NBM is a dedicated mission based at MoA&FW, it would be effective to provide a separate governance avenue in order to mitigate challenges associated with its operations, capacity, accountability and coordination. The government must provide avenues to mainstream bamboo as a separate product category for governance due to its high potential, versatility, and relevance for Indian demography. In addition to strategising roadmaps, trade regulatory measures like putting a cap on imports of bamboo raw materials for domestic industrial operations, can create opportunities for industries and incentivize farmers to cultivate bamboo at the same time, hence increasing productivity. Moreover, bamboo textiles are in high demand in the US and European markets. It is crucial to include bamboo-based fibre clothing in existing PLI schemes under MMF apparel and fabrics for incentivising indigenous manufacturing [Invest India PLI].
It is also vital to find synergies across existing schemes/interventions under various ministries and departments in order to mainstream the bamboo economy in the central policy landscape of India. These steps will ensure the creation of a robust and coherent policy environment that caters to demand, creates opportunities for markets and exports, and pushes bamboo production on private lands. The dominance of global exports by China highlights a pressing situation for India to undertake an evidence based approach in developing policy and regulatory practices. This should be undertaken through two avenues (i) lessons from the leading exporters (ii) and catering to emerging and prospective demand sectors. This will provide a push for the development of a self sustainable demand centric industrial model for the domestic industries and will make India export ready for potential as well as prospective bamboo products. It’s time to relook, reassess and transform the bamboo industry from a crisis into a thriving opportunity for economic growth, which can compete with the success of global players like China.
In a recent felicitation ceremony organised by the Bamboo Society of India (BSI) and Vidarbha Bamboo Development and Promotion Committee (VBDPC), Union Minister of Road, Transport and Highways, Mr. Nitin Gadkari, made a compelling offer to farmers: “You (farmers) grow Bamboo, I will give you a market” [Times of India, 2023]. The statement serves as an acknowledgement by the government about the policy shortcomings being faced by the Indian bamboo industry for the last two decades. The piece will try to position these shortcomings through a central problem and provide direct and indirect policy measures to address and actively engage with the solutions.
Approximately two decades ago, the planning commission envisioned the Indian bamboo industry as a potential 25,000-30,000 crore industry (estimated in the year 2004). This figure has also been reiterated by the central cabinet minister in a bamboo virtual conference in 2021, while providing assurance to the farmers for the support in product development and promotion from the Ministry of MSME [Economic Times, 2021]. The National Bamboo Mission (NBM), initiated in 2006, was meant to be a catalyst for the industry’s growth. It is a central institution embedded as a sub scheme under the Mission for Integrated Development of Horticulture (MIDH) to allocate financial resources, set priorities & goals, and formalise the national institutional structure for the development of the bamboo value chain. Fast forward to the present, the industry is still striving to develop and stands at a curious crossroad. Despite undertaking dedicated reforms in 2018 by the central government to address potential policy gaps by restructuring NBM, India’s bamboo industry has still failed to match the growth witnessed by its Chinese and global counterparts [NBM Revised Guidelines] [UNCTAD]. For context, the Restructured National Bamboo Mission (RNBM) refocused its strategy on product development, market creation, and waste utilisation, extending well beyond the existing priorities of cultivation and plantation of bamboo.
So, how effective has the NBM been for the growth (or not) of the bamboo industry over the past two decades? Examining international trade provides a uniquely troubling scenario. India, despite having the world’s largest bamboo cover [ISFR 2021] and being the second-largest bamboo producer with nearly 14.6 million MT of harvest in 2019 [NBM Operational Guidelines 2019], still imported 88% of its bamboo raw materials in 2021 [INBAR 2021]. This glaring dichotomy highlights the industry’s dismal condition on both the supply and demand fronts domestically as well as globally. Due to lower productivity and gaps in the supply of raw materials, imported bamboo is being used to cater to the domestic demand as well as manufacture exportable goods. In addition to that, India’s integration in the global value chain of bamboo is also very minimal indicating a vivid supply-demand gap. After a detailed and careful assessment, it is theorised that the domestic bamboo industry grapples with four intertwined challenges, each one hampering its growth potential and needs to be addressed holistically.
First, the bamboo productivity in India is extremely low, indicating low yield cultivation, compared to China which stands at 30-40 tons/ha, in India, it ranges between 1-3 tons/ha with figures only as high as 6-9 tons/ha [NBM Concept Note] [NEDFI Action Plan 2020]. One among many issues are the legal ambiguities on the governance of upstream segments of bamboo across states that have yielded inefficiencies [CCS n.d] [CCS 2013]. These regulatory inconsistencies between states and between states and the central government have further hindered progress. These discrepancies are bamboo species specific and range from transit tariff collection to imposing royalties [MoEFCC 2017].
Second, a significant portion of funds, amounting to more than 50%, allocated to state bamboo missions goes unutilised, within which 55% of the funds are directed solely towards planting and cultivation related activities [NBM Annual Action Plan 2021]. Ironically, despite increased investment in bamboo cultivation, the average annual plantation area has decreased significantly and has gone down from 10,417 (before 2018) to 5,939 (after the restructuring of NBM) [MoA&FW Annual Report].
Third, as the value chain ends up becoming a low policy and funding priority over the years, the development of midstream and endstream segments received limited support and focus, with a majority of sectors still involved in manual labour work for product development [NBM Annual Action Plan]. The industry has primarily focused on low-value-added products with labor-intensive work, resulting in limited profitability, and lower interests from farmers. Additionally, there is a distinct supply-demand gap in the domestic bamboo economy. Estimates suggest that domestic bamboo supply is half the demand in the finished product market. The production figure for bamboo was 14.6 million metric tonnes in 2019, whereas the demand projected was more than 30 million metric tonnes [NEF 2023]. The interesting point is that even by utilising India’s vast bamboo resources, the net output of novel productivity (assuming a yield of 6 tonnes/ha) would still be low, primarily due to limiting non-forest bamboo land and lower yield.
Finally, high waste generation persists due to non-mechanized processing methods and an unskilled labor force, which is further exacerbated by cheap imported raw material from China. Some estimates points the number as high as 40% with 70-80% in sectors like incense sticks [Bamboonomics] [NCDC DPR]. In 2019, The ITC reported that its share of Indian bamboo for its agarbatti manufacturing operations is limited to 5%, implying the majority is sourced through imports [NBM MoM 2019].
Nevertheless, what is the way out of this dichotomy and solutions towards substantially reducing our import dependence from China, which costs us more than 64 million USD annually [INBAR 2021]? And how can the National Bamboo Mission proceed with planning strategic reforms for the industry?
The National Bamboo Mission has been instrumental in curating and crafting the bamboo industry in India since its inception in 2006. Though several factors have influenced the positionality and nature of imaging bamboo as a product, the central goal of reducing import dependence remains consistent. It is crucial to build on this inherent perspective and radically propose reforms in the way the bamboo industry is structured and operates. To address these challenges and reduce dependence on Chinese imports, India must shift its focus from a production-centric model to a demand-centric one. The focus on ‘demand pull’ economic policies can not only provide a direction to the produced goods in the value chain but also provide the impetus for increasing the supply of bamboo.
A robust framework tailored to end-user segments should prioritise high-growth (potential), high-demand (prospective) use cases for bamboo, such as bioethanol, charcoal, and daily-use articles. The focus should be on drafting sectoral strategies, inter-sectoral waste management plans, integrated value chain development, and focusing on MITP, i.e., creating new and accessible market avenues with fair pricing, strategic investments in product development, manufacturing and imports of technologies for processing bamboo & its use in prospective high economic industries and ways for robust partnerships between producers and industries [NEF 2023].
It is also inefficient for the NBM to function as a sub-scheme under MIDH as it tends to push the priorities of the product according to the central mission (MoA&FW Annual Report 2023). Since the NBM is a dedicated mission based at MoA&FW, it would be effective to provide a separate governance avenue in order to mitigate challenges associated with its operations, capacity, accountability and coordination. The government must provide avenues to mainstream bamboo as a separate product category for governance due to its high potential, versatility, and relevance for Indian demography. In addition to strategising roadmaps, trade regulatory measures like putting a cap on imports of bamboo raw materials for domestic industrial operations, can create opportunities for industries and incentivize farmers to cultivate bamboo at the same time, hence increasing productivity. Moreover, bamboo textiles are in high demand in the US and European markets. It is crucial to include bamboo-based fibre clothing in existing PLI schemes under MMF apparel and fabrics for incentivising indigenous manufacturing [Invest India PLI].
It is also vital to find synergies across existing schemes/interventions under various ministries and departments in order to mainstream the bamboo economy in the central policy landscape of India. These steps will ensure the creation of a robust and coherent policy environment that caters to demand, creates opportunities for markets and exports, and pushes bamboo production on private lands. The dominance of global exports by China highlights a pressing situation for India to undertake an evidence based approach in developing policy and regulatory practices. This should be undertaken through two avenues (i) lessons from the leading exporters (ii) and catering to emerging and prospective demand sectors. This will provide a push for the development of a self sustainable demand centric industrial model for the domestic industries and will make India export ready for potential as well as prospective bamboo products. It’s time to relook, reassess and transform the bamboo industry from a crisis into a thriving opportunity for economic growth, which can compete with the success of global players like China.