Analysis of India as a market area for sawnwood

India is a fast growing economy with a high rate of gross domestic product that has improved the local spending power and has turned the country into a potential player in the global economy. In terms of wood products, India has been a net importer and currently is one the largest consumers of hardwood sawnwood in the world. The demand for sawnwood is rapidly growing in India and due to this situation, the country is a potential destination for Finnish and foreign exporters able to reach this market. The research attempted to increase the understanding of the importance of the demand for sawnwood in India. Thus, the purposes of this study are to: 1) provide a general description about the market environment of sawnwood in India and its situation at global level; 2) model and estimate potential factors impacting the demand level for Indian imports of sawnwood; 3) draw general conclusions about key opportunities and challenges for Finnish and major foreign exporters of sawnwood in the Indian market. Despite there is valuable information published about India’s wood market, empirical research on the Indian sawnwood market is scarce and unreliable. Hence, based on descriptive and explanatory methods, this study gathered secondary data from official and international sources for background and statistical information. The purpose was to analyze the sawnwood market through empirical modelling. Thus, econometric time-series modeling, for the period of 1992-2013, was used to explain the demand for imports of sawnwood in the Indian market by testing the conventional demand model, for income and price variables, and ad hoc models, for several explanatory variables. In addition, Engle and Granger, MacKinnon and Johansen methods were used to test cointegration among variables. The results suggest that the demand for imports of sawnwood is positively related to consumer income and negatively to prices. In addition, it depends on other factors such as population density, unemployment and economic openness. However, based on the elasticity estimates, the Indian sawnwood demand seems to be income and price elastic. The knowledge obtained in this study provides a valuable tool for foreign wood-based industries searching for market prospects to export their products as well as for public authorities involved in formulating forest and economic policies. However, further modelling is left for future research in this area.