How Profitable Is Sandalwood Farming in India?

Sandalwood farming requires careful planning and long-term commitment. Santalum album—white sandalwood—is one of the world’s most valuable timber species. Revered in India for religious, medicinal, cosmetic, and perfume uses, sandalwood commands exceptionally high prices due to its scarcity and long maturation cycle.
Sandalwood farming in India is gaining momentum due to its profitability.

Global supply is extremely limited. Production barely covers a fraction of demand—annual demand is ~40,000 MT versus supply under 100 MT.
Sandalwood tree farming involves understanding host plant interactions and soil types.

Roughly 1 kg of quality heartwood typically fetches INR 10,000 – INR 20,000, while sandalwood oil can sell for INR 150,000– INR 250,000 per liter.
The potential sandalwood farming profit has attracted both farmers and investors.

These fundamentals underlie why sandalwood farming is often hailed as a “goldmine”—or “liquid gold.”

Cultivation Basics & Timeline for Sandalwood Tree Farming

Soil & Climate

• Thrives in well-draining red sandy or loamy soils, pH 6.0–7.5).
• Adapted to hot, tropical-to-sub-tropical climates (10–40 °C).
  
  

Host Plant Requirement

Sandalwood is a semi-parasitic species and requires a host plant, such as Acacia, Pongamia, Casuarina, Cassia, or Sesbania, planted alongside to support its growth.

Planting & Maintenance.

• Standard spacing: ~3 × 3 m or ~10 feet apart.
• Initial irrigation (especially the first 2–3 summers), followed by drip irrigation to conserve water.
• Weed management, pest monitoring (e.g., spike disease) and pruning are essential.
  
  

Harvesting Cycle

• Maturity is typically reached in 12 to 20 years, depending on management .
• Heartwood forms around the 8–12 year mark, but peak yields are at 15–20 years.
  
  

Investment & Returns from Sandalwood Farming Profit.

Cost Structure (Per Acre)

Costs vary across sources but generally include:

• Land preparation, host plants, seedlings INR 3–4 lakh.
• Maintenance & protection over 15 years ≈ INR 2.5–15 lakh.
• Total costs range from ₹4 lakh to as high as ₹15 lakh per acre over 15–20 years.
  
  

Yield Estimates

• An acre with ~400–600 sandalwood trees yields 12–20 kg per tree, totalling 3,000–4,000 kg of heartwood.
• Some reports cite as high as 5,000 kg/acre.
• Heartwood often constitutes 6–10 kg per tree at maturity.
  
  

Revenue Projections

Using average rates and mid-range yields:

• 3,500 kg × INR 10,000/kg = INR 3.5 crore/acre 士 INR 700 crore.
• Upside: 3,500 kg × ₹20,000/kg = INR 7 crore .
• Even conservative estimates show ₹2–4 crore gross returns per acre over 15–20 years Sapwood and oil add value—oil alone can fetch ₹150,000–₹250,000 per liter.
  
  

Profitability & ROI

• After deducting INR 4–10 lakh costs, net profits can range from INR 2–7 crore/acre.
• ROI rates of 15–20% annually are realistic via managed farmland investment models.
• Sandalwood farming commonly returns 10× initial investment in 15–20 years.
  
  
  

Risks & Challenges

• Long Gestation – capital and patience locked for 12–20 years.
• Host Plant Dependency – requires complex biology and balance with host trees.
• Pests/Disease – spike disease, sap borers etc. need vigilant management.
• Theft Risk – high-value trees attract thieves (necessitates fencing, guards).
• Regulatory Controls – harvesting restricted by forest department; requires thorough compliance.
• Market Volatility – although historically increasing, prices may vary, especially for crude oil markets.
  
  
  

Managed vs. Independent Sandalwood Farming in India

Managed farmland models—run by Nimbus Agro Farm—offer turnkey solutions:

• Handle planting, host-plant maintenance, irrigation, compliance, and security.
• Investors can monitor remotely and may even lease back unused portions.
• Benefits include ease, professional management, and reduced risk—but share profits with the service provider (often ~50:50).
  
  
  

Spotlight on Sandalwood Vista Farm 

Development Overview

Run by Estatebull Realtors Pvt. Ltd., Sandalwood Vista Farms is a managed farmland project focusing on premium white sandalwood near Bengaluru.

Located ~95 minutes from Bangalore International Airport, close to Lepakshi Temple and Jatayu Theme Park—creating value as a weekend retreat and investment.

Infrastructure includes borewells, large reservoir, club-house, cottages, swimming pool, party hall, cafeteria, meditation deck, kids’ area, Gaushala etc.—positioning it as a farm-lifestyle community.

Farmer & Investor Testimonials

Investors report being “mesmerized,” praising the high quality managed farmland concept.

Positive user experiences highlight professional maintenance, enjoyment, and future returns.

Financial Highlights

Land cost: around ₹55–60 lakh/acre in Bengaluru region.

No direct ROI figures are published, but based on sector norms:

• Expect gross returns of ₹2–4 crore over 15–20 years per acre.
• After costs (~₹10–15 lakh plus estate management fees), net profits could range from INR 1.5–3.5 crore per acre, yielding 15–20% annualized returns.

These returns are highly attractive compared to typical asset classes.

Strategic Advantages

• Proximity to Bengaluru—good resale or value appreciation potential, not just farming returns.
• Lifestyle amenities—for recreation, retreats, or weekend homes.
• Turnkey farming services—no need for the investor to handle ground-level operations.
• Tourism-linked potential—temples and theme parks nearby may increase appeal.

Sandalwood farming in India offers one of the most lucrative long-term agricultural investments available. With minimal recurrent costs and high-value outputs—heartwood and oil—it delivers strong ROI, especially when professionally managed.

FAQs

Q1. What is sandalwood farming profit per acre?
Answer: Profit per acre of sandalwood farming ranges from INR 1.5 crore to INR 2.5 crore after 12 to 15 years of practice. Profits depend upon cropping, climate, tree population, soil, and upkeep. Further, adopting scientific farming practices, eco-friendly methods, and sustainable farming boosts profitability.

Q2. What is sandalwood price per kg?
Answer: Depending on the grade, sandalwood prices differ. On average, heartwood of sandalwood fetches INR 10,000 to INR 20,000 per kg, while sandalwood oil fetches an even higher price.

Q3. Is sandalwood farming profitable?
Answer: Yes, sandalwood farming is one of the best agroforestry ventures in India. Government aid coupled with the need for sandalwood and its oil in the cosmetic, therapeutic, and religious sectors have made it one of the highest return crops.

Q4. What is sandalwood plantation cost?
Answer: Sandalwood plantation’s the cost of INR 80,000 to 1,20,000 per acre covers the purchase of seedlings, irrigation system, maintenance, protection, and even intercropping. Given the price of sandalwood, the cost is easily recouped many times over.

Q5. How long is sandalwood tree lifespan?
Answer: A natural sandalwood tree lives for 80–100 years. However, the tree is generally felled at 12–15 years when the heartwood and oil content is at its highest commercial value.

Q6. What is sandalwood farm investment return?
Answer: Profits from sandalwood cultivation can be 20 to 30 times the investment. For instance, if you invest approximately INR 1 lakh per acre, after 12–15 years, the profit can rise to INR 1.5–2.5 crore, subject to efficient management and price rates.

Q7. How much kg of sandalwood per tree?
Answer: A healthy sandalwood tree produces about 15–20 kg of heartwood and 3–6 kg of sandalwood oil, depending on its age and growth environment.

Q8. How many sandalwood trees can be planted per acre?
Answer: Typically, 300 to 400 sandalwood trees can be planted per acre, along with host plant species, since sandalwood is a semi-parasitic tree that relies on host species for nutrition.

Q9. What is the price of one sandalwood tree?
Answer: The price of a sandalwood tree depends on its age, size, and the amount of heartwood it contains. On average, a 20–30-year-old tree costs around 1.5 to 4 lakhs.