Sandalwood has always been a precious tree in India. From temples to perfumes, from medicines to cosmetics, its demand never goes down. That is why sandalwood farming is becoming one of the most talked-about investment opportunities today. People who are looking for long-term, secure, and high-return investments are now exploring sandalwood plantations.
Why Sandalwood is Special
Sandalwood is often called “green gold” because of its high market value. Both the heartwood and the oil extracted from it are used in many industries:
- Religious purposes – Sandalwood paste is used in Hindu rituals and temple offerings.
- Perfumes and cosmetics – Sandalwood oil is one of the costliest essential oils in the world.
- Medicines – It is used in Ayurvedic and Unani systems for treating skin problems, infections, and stress.
- Handicrafts – Sandalwood carvings and artefacts are popular in domestic and export markets.
This evergreen demand makes sandalwood farming a profitable option compared to many other crops.
Legal Changes in India
Earlier, growing and cutting sandalwood trees was tightly controlled by the government. Farmers had to depend on the forest department, and it was risky to invest. But now, several states in India have relaxed the rules. For example, Karnataka, Tamil Nadu, Andhra Pradesh, and Kerala allow private cultivation with proper permissions.
This legal change has opened the doors for private investors. Today, individuals, groups, and companies can grow sandalwood trees legally, harvest them, and sell them through authorized channels.
Investment Model of Sandalwood Farming
When we talk about sandalwood farm investment, there are mainly two ways:
1. Direct Farming (Own Land)
- You buy or use your own agricultural land.
- You plant sandalwood saplings and take care of them.
- After 12–15 years, you harvest the trees and sell the heartwood and oil.
2. Contract or Managed Farming
- Many companies offer sandalwood plantation projects.
- They plant trees on their land or leased land and manage everything.
- You invest money, and after maturity, you get your share of profits.
Both models have pros and cons. Direct farming gives you full control, but it also requires patience, knowledge, and regular care. Managed farming is easier but requires choosing a reliable company.
Cost of Sandalwood Farming
The cost depends on land, location, and method. Let’s look at some rough estimates:
- Land: If you already own land, cost is lower. Buying new land adds major expense.
- Saplings: A sandalwood sapling costs between ₹100 to ₹200. About 400–500 trees can be planted per acre.
- Intercrops: Since sandalwood grows slowly, many farmers plant intercrops like pulses, vegetables, or medicinal plants in the early years to get side income.
- Maintenance: Includes irrigation, fertilizers, labour, and protection from pests.
On average, the cost of planting sandalwood on one acre may come around INR 3–5 lakhs in the first few years. After that, the maintenance cost reduces.
Returns from Sandalwood Farming
This is where sandalwood investment attracts people. A mature sandalwood tree (after 12–15 years) can give 15–20 kg of heartwood and 1.5–2 liters of oil. The price of heartwood ranges between ₹7,000 to INR 10,000 per kg, and oil is even higher, going up to ₹1.5 lakh per liter depending on purity.
Let’s take an example:
Suppose you plant 400 trees on one acre.
After 15 years, even if 70% survive, you get around 280 trees.
Each tree gives on average 15 kg heartwood.
280 trees × 15 kg = 4,200 kg.
At a conservative price of ₹8,000 per kg, you get about ₹33 crores from one acre.
Of course, this is a long wait, but the return is massive compared to normal crops.
Risks and Challenges
Like any investment, sandalwood farming also has risks:
- Long gestation period: Returns come only after 12–15 years.
- Tree survival rate: Not all saplings survive. Proper care and soil suitability are crucial.
- Theft and security: Because of its value, sandalwood trees attract thieves. Farmers must ensure fencing and protection.
- Market fluctuations: Though demand is strong, prices may vary based on supply and regulations.
- Company frauds: In managed farming, some companies make big promises but fail to deliver. Investors should research carefully before investing.
How to Start Sandalwood Farming
If you are planning to invest, here are some simple steps:
1. Check Legal Rules
- Consult your state forest department.
- Take required permissions and registrations.
2. Select Land
- Sandy, red, or loamy soil is best.
- Ensure proper drainage and moderate rainfall.
3. Get Quality Saplings
- Buy saplings only from government-approved nurseries.
- Healthy saplings improve survival rate.
4. Planting Method
Plant sandalwood along with a host plant (like pigeon pea, casuarina, or neem) because sandalwood is semi-parasitic and takes nutrients from nearby plants.
5. Maintenance
- Regular irrigation in early years.
- Pest control and pruning.
- Security measures as trees mature.
6. Marketing and Selling
- At the time of harvest, contact authorized buyers, government auctions, or companies.
- Keep legal documents ready for hassle-free selling.
Who Should Invest
Sandalwood farm investment is suitable for:
- Farmers with spare land who can wait for long-term gains.
- Professionals and NRIs looking for alternative investments.
- Investors willing to diversify into agriculture.
It is not for those who want quick profits or short-term income. Patience is the key here.
Sandalwood farming is a golden opportunity if planned wisely. With changing laws, high demand, and growing awareness, it has become one of the most profitable agricultural investments in India. But like all investments, it requires research, patience, and proper management.
If you are ready to wait 12–15 years, sandalwood can turn into a life-changing investment. Always start small, learn the process, and then expand. Green gold may take time, but it surely shines bright for those who believe in long-term vision.
