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Why India’s plywood industry faces an environmental crackdown
This follows complaints about pollution from plywood units in Haryana’s Yamuna Nagar district. The tribunal flagged the lack of national norms on factory location, pollution control equipment, and handling of carcinogenic chemicals, among other things.
Mint explains the NGT ruling and its fallout.
What did the NGT say?
On 27 May the NGT’s principal bench, led by chairperson Justice Prakash Shrivastava, directed the environment ministry to draft comprehensive guidelines for the plywood industry. Despite the industry’s high pollution index of 78.3, it is currently categorised as a ‘moderate’ polluter under the Central Pollution Control Board’s (CPCB’s) ‘orange’ category, with no dedicated national regulations.
“Plywood industries, having a pollution index of 78.3 and falling in the ‘orange’ category, are acknowledged to cause air and water pollution… but no guidelines have been issued regarding location, pollution control devices, and safeguards to be adopted in the use of carcinogenic chemicals,” the NGT order stated.
The tribunal directed the ministry to file an action-taken report within six months.
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The NGT also highlighted severe pollution from plywood units, especially in Haryana’s Yamuna Nagar district—one of the country’s largest plywood hubs—where factories emit harmful pollutants and carcinogenic chemicals such as formaldehyde without proper controls. The tribunal ordered guidelines on critical issues including factory location, pollution control equipment, safe handling of adhesives, and volatile organic compound (VOC) emissions.
The tribunal also directed the Haryana government and the state’s pollution control board to enhance its monitoring of plywood factories. This includes reviewing clearances, inspecting resin production, enforcing safe chemical storage, proper disposal of wood ash, ensuring functional pollution control equipment, and making compliance information publicly available online. The Haryana board must report its progress within three months.
What sparked the move?
It was triggered by Sumit Saini, a resident of Damla village in Yamuna Nagar, who petitioned the NGT in May 2022, citing severe air and water pollution from nearby plywood factories. He described black smoke, ash deposits, health issues, and a lack of pollution control in around 20 factories.
The NGT treated his letter as a suo motu case and set up a joint committee comprising state and local authorities to investigate the matter. The committee’s report said most factories were compliant with pollution laws, but the NGT found the inspection insufficient and ordered further probes, particularly into formaldehyde emissions and VOC safeguards.
Why plywood pollution is harmful
The NGT order noted that plywood manufacturing involves wood and adhesives such as phenol formaldehyde and urea formaldehyde, which release VOCs and carcinogenic fumes, especially during hot pressing. Pollution also arises from wood dust, fuel combustion, chemical waste, and improper disposal of wood ash.
These emissions contaminate the air, water, and soil, posing health risks and environmental damage. Currently, there are no plywood-specific pollution standards—only general boiler emission rules.
What lies ahead for the industry?
The industry has expressed concerns over the NGT ruling.
Ajay Maniktala, ex-president of the Haryana Plywood Association, said, “We are tense about the order. These laws might increase operational costs for the units. We are not against framing laws, but they should consider older units that have been running for years and may not be able to comply with new norms. We are seeking relief in compliance norms,” he added.
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According to Maniktala, the association plans to meet Haryana’s chief minister to present their grievances and suggestions.
How big is India’s plywood market?
India’s plywood market was valued at ₹23,510 crore in FY25 and is projected to grow at a compound annual rate of 5.44% to hit ₹38,790 crore by FY34. The industry faces competition in the form of low-quality plywood imports from Indonesia, Vietnam, Malaysia and Nepal, contributing to India’s widening plywood trade deficit, which grew from $85.83 million in FY19 to $154.57 million in FY24.
Key manufacturing hubs include Kerala, Haryana, Punjab, Uttar Pradesh, Uttarakhand, Tamil Nadu, Karnataka and Gujarat. While exports grew from $32.28 million in FY19 to $75.26 million in FY23, they dipped to $57 million in FY24, indicating shifting market dynamics.
Why Haryana is key
Haryana, especially Yamuna Nagar, is central to India’s plywood industry, contributing 40-50% of national output. However, the industry faces a raw material crisis. It needs more than two lakh quintals of poplar and eucalyptus wood daily but currently receives less than half of this, partly because new plywood factories in Uttar Pradesh and Uttarakhand are attracting local wood suppliers.
The Haryana Plywood Manufacturers Association had earlier urged the state government to reduce market fees and support the industry amid these challenges.
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