In recent times farmers are showing great interest in growing a few economically important tree species plantations and as an integral component of Agroforestry systems. Sandalwood is one such species that is gaining wider attention among farming and corporate communities for its high economic value. India is the major exporter of Indian sandalwood in the world, accounting for 90% of the total global production. Most of the produce comes mainly from natural stands, wherein presently sandalwood trees are under tremendous pressure because of indiscriminate exploitation, especially for a high export value of wood coupled with poor regeneration, fire, disease, and change in land-use pattern.

…Sandalwood production has reduced from 400 to 500 Tonnes per year, whereas the global demand is between 5000 and 6000 Tonnes per year of heartwood or 100–120 Tonnes of oil1

(Proceedings of the National Seminar on Conservation, Improvement, Cultivation and Management of Sandal (eds Gairola, S. et al.), 12–13 December 2007, pp. 1–8)

The declining natural stock has increased the price of sandalwood in the national and international market by many folds and East Indian sandalwood continues to enjoy the prime position attracting greater commercial venture.


Indian sandalwood (Santalum album L.) is one of the precious woods known for its sweet fragrant aroma and commercial value in both national and international markets. Besides, its wide adaptability to varied climate, hosts, and edaphic conditions have attracted farmers and corporates for commercial ventures.

Sandalwood is a semi-root parasite, the successful establishment of sandalwood plantations depends on the understanding of parasitism ecology, especially the relations between host and parasite, their ratio, and other silviculture techniques. Sandalwood relies on host plants for mineral nutrients and water through haustorial connections which act as a physiological bridge between the parasite and the host. It parasitized over a vast array of plants from grasses to trees, whereas leguminous associations are superior. Deep-rooted and slow-growing perennial hosts help in sustained growth. For a better yield of heartwood and oil, we should grow it for over 15 years, whereas the optimum rotation age would be 25–30 years.

Sandalwood is naturally found in many regions such as Indonesia, Pakistan, Bangladesh, Hawaii, Sri Lanka, and other Pacific islands. It is native to Australia and India, the oil and wood of Indian sandalwood which is often referred to as East-Indian Sandalwood, is highly valued in the world market. The aromatic oil, which is in yellow color, is obtained from both tree wood and roots. The sandalwood odor persists in articles made of sandalwood for decades. It is an evergreen tree with a slow growth rate reaching a height of about 10 to 15m with a girth size up to 1 to 2.5m at chest height. It takes nearly 15 years for the tree to reach marketable feasibility. However, under fertigated conditions, it takes nearly 20 years for the tree to reach commercial value. The leaves are leathery and in pairs on either side of the stem. Matured leaves are bluish to greenish-yellow while young leaves are pinkish green making the tree look evergreen. The bark of young trees is reddish-brown and smooth while maturing trees have a rough, dark brown color with deep vertical cracks. The inward part of the bark remains reddish. The tree is a semi-parasitic on other tree species roots. The tree roots spread wide and forms ‘root grafting’ with nearby tree roots. By attaching its roots with nearby tree roots, it gets water and nutrients for its growth. The flowering of the tree depends on the altitude, flowering starts a month early on trees growing at lower altitudes compared to trees at higher altitudes. The young flowers are yellow and change to deep purplish-brown on maturation. It takes a month from bud stage initiation to anthesis and three months for fruit ripening from the initial stage. The sandalwood tree grows well in various sets of environmental and climatic conditions.

The scientific name of sandalwood plant is Santalum album, belonging to the family Santalaceae.

The main species of international commerce are:

Santalum album (East Indian Sandalwood) – native to Indonesia and India, and presumed naturalized in the Top End of northern Australia. Historically, S. album has been a highly regarded sandalwood species in international commerce. The species is now commercially extinct in its native habitats, with most of the future supply coming from plantations in northern Australia (and also from plantations being established in many tropical countries in Asia)

S.spicatum (Australian sandalwood)–native to southwestern Australia. The dominant traded sandalwood in recent decades because of more sustainable management by WA authorities: not valued for its oil, which has lower percentages of santalols and high levels of E, E farnesol, but well suited to incense sticks, carving wood and alike.

S.austrocaledonicum (sandalwud)–native to New Caledonia and Vanuatu. The quality of oil varies with some populations (such as Santo and Malekula in Vanuatu and Isle of Pines in New Caledonia) having extremely high-quality oils similar in profile to East Indian sandalwood oil.

S.yasi (yasi or ‘ahi) – native to Fiji, Tonga and Niue. Usually produces an excellent quality heartwood and oil, which meets ISO standards for East Indian sandalwood, although limited analysis suggests an E,E Farnesol level of around 2-3% of its oil: this rather dubious skin allergen may limit the use of S. yasi oil in Europe for perfume and body care products.

S.paniculatum (‘iliahi) – native to Hawai’i.

Sandalwood Cultivation:

Growing Conditions for Sandalwood. Places with moderate rainfall, full sun, and mostly dry weather in a year. They grow well in tropical and sub-tropical regions where the climate is hot. Sandalwood plants grow well in various soils such as sandy, red clay, and clay-rich black soils. Soils that are red ferruginous loam are preferable with 6.0 to 7.5 soil pH value. Sandalwood tolerates gravelly soil, rocky ground, high winds, intense heat, and drought conditions. Though they prefer a lot of sun but will grow in part shade. They thrive well in 13° to 36° C temperatures and with annual rainfall between 825 to 1175 millimeters. Sandalwood is sensitive and does not tolerate water-logging. Lands in the altitude regions of 1960 to 3450 feet are most preferred for proper and full growth.

Unlike other plantations, sandalwood plantations need sites for proper tree development. Lands that have a slope facing north to the west with good sunlight are preferable. Lands with free-draining soils are ideal for plantations. Land should be tilled to 40cm in depth. Prepare the land with a couple of deep plowing to bring the soil to a fine tilth for facilitating root penetration. Add a good amount of farmyard manure in the last plow. Clear all the weeds from the site, leaving trees that will serve as suitable hosts.

We can propagate sandalwood either by seed or vegetative grafts. With propagation by seeds, seeds of 15-20years old trees are collected, soaked in water for 24hrs and sun-dried to crack open the seed coat which makes seed germination easy

Vegetative propagation is done by grafting or air-layering or by root cuttings. Most commercially available sandalwood saplings use tissue culture propagation. This method is easy to perform, with about 60% success rate. Vegetative propagation is influenced by the time of planting such as cuttings planted in early April did better than cuttings planted in May month.

Before transplanting seedlings in the farmland, host plants should be raised early for pricking out together with young sandalwood plants. Plants such as indigenous Acacia species, Casuarina sps, Cajanus Sps, Croton megalocarpus etc are appropriate host plants for sandalwood farming.

Pits of sizes 45 x 45 x 45 cm are dug with a minimum spacing of 2.5mx2.5m or 5m x 5m cm that includes about 600 to 400 sandalwood plants per acre. Each pit is filled with red soil and farmyard manure or compost in 1:2 ratios. In each row at about every fifth tree, a long-term plant is planted and at every 150 cm distance from the sandalwood plant, an intermediate plant sown. The intermediate plants must not be taller than the sandalwood plant, hence regular pruning is required. Seedlings that are 6 to 8 months old or those plants about 30 cm in height are ideal to be transplanted to the primary field. The young sandalwood plants must be well-branched with a brown stem.

Sandalwood grows well under is rain-fed cultivation and may require watering in summers. Young sandalwood plants are to be provided with irrigation in summer season once in 2-3weeks intervals. In hot and summer days we can provide water through drip irrigation and depending on the soil moisture retention capacities provide irrigation in the months from December to May. As the trees draw most of their nutrients from nearby host plants by the means of Haustoria, they can survive with very less fertilizer input. However, Organic manures such as compost, farmyard manure, and green-manure are helpful for tree growth.

Weeding is to be done thoroughly in the first year, followed at regular intervals. This will help to prevent nutrient loss and soil moisture. For additional income, farmers can go for intercrops to optimize the use of land utilization and soil management. Short-duration crops with shallow roots are favorable for inter-cultivation.

Sandalwood trees are prone to lots of varieties of insects, but only a few affects the economic performance of the tree. The tree is mostly vulnerable to pest damage during its initial years of growth.

Harvesting Sandalwood

The best time to harvest sandalwood is when the tree is 15+ years old.  The Heartwood forms well in maturing trees that are older than 30 years old and attain a girth of 40 to 60 cm. 20 to 50 kg of heartwood can be harvested at an average from a tree with a girth of 50 to 60 cm. Sapwood is peeled off the trunk, roots, and branches to get the heartwood core. Some commercial farmers having sandalwood farms, practice early harvest of 10-12year old trees which have attained a girth 15-25cm. The essential oil got from young trees is usually of low grade. Trees that are 13 years old have 12% high-grade wood, and trees that are 28 years old have 67% high-grade wood. The value of essential oils depends on the quality and grade of the harvested trees. The older the sandalwood trees better is the quality of wood with superior grade oil.

Usually trees with >13cm and sapwood less than 1/6th of the diameter of the trunk at 130cm above the ground are chosen for harvesting. Fallen or dead wood of any size retains the oil for very long periods and thus can also used for oil extraction. Chipped branches and wood dust is used in incense preparation.

Yield: Sandal trees are among the slowest growing trees taking a minimum of 10 to12 years for Heartwood formation. The growth rate of sandalwood trees is 4cm to 5cm increase in girth per annum under favorable climate and soil conditions with assisted irrigation.

Economics of Sandalwood Cultivation:

Investment and Maintenance pattern on Sandalwood farming in the one-acre land.

The figures being mentioned are only indicative and subject to vary according to the market demand.

Grid Size: 2.6mx2.6m

Total no of plants per acre: 650

No. of saplings that should be procured to adjust for mid-term losses: 750

Cost per tree unit (Sandalwood sapling, Host plant, Basal fertilizers, Live mulch, etc): ₹ 1000/-

Cost of digging per pit: ₹ 150/-

Cost of Drip irrigation installation: ₹200,000/-

Total planting Cost per Acre: Approx. ₹10,50,000/-

Annual maintenance cost of the farm (pruning, labor, irrigation, electricity etc): ₹6,50,000/-

The total cost of the project, assuming the wood is harvested at 15th year: ₹1,08,00,000/-

This cost is excluding the cost of security which becomes a necessity once the trees produce the oil. Since ages, Sandalwood has always faced a major risk of being stolen and has also given rise to smugglers like Veerappan. Hence it becomes imperative not to practice it without ample arrangements of security. Under such scenarios, Collective/Community farming schemes become more attractive as they distribute and thus mitigate the high cost of security. 

The average heartwood harvest may go up to 10 kg per tree in 15years, giving up to 6.5 Tonnes per acre under best farming practices with good soil and climatic conditions. Thus, approximate returns from 1 Acre of Sandalwood forest at the current price is ₹4.9 crores/-. This makes the farmer a net profit of 3.92 Crore per acre in 15years giving approx XIRR of 17.45%.

The global sandalwood market remains buoyant, with current sales of Santalum album oil at approximately ₹1,30,000/- (unlicensed production through Dubai) to ₹1,60,000/- (licensed production from India), up to ₹1,85,000/- per kg of Oil.

As per Institute of Wood Science and Technology, Bengaluru under the aegis of Indian Council of Forestry Research and Education of the Ministry of Environment and Forests, Govt. of India:

The currently the government price of Class I heartwood of Indian sandalwood is Rs.7,500 per kg and oil is around Rs. 1,50,000 per kg. In domestic market, price of the sandalwood is Rs. 16,500 per kg. The price international market is about 15 to 20% higher than the domestic market. The annual augment of price is going at a premium if over 25%.

Future of Sandalwood:

Sandalwood has several quite distinct, high value end uses which underpin its price and maintain demand in different market segments and regions: these include as an ingredient in fine perfumes, exclusive natural body care products and new pharmaceuticals, especially for European and North American markets; for solid furniture, carvings, traditional medicines and religious uses in China, Korea and Japan; for attars, funeral pyres and chewing tobaccos in India and for customary uses in the Middle East.

As per studies conducted in 2014, global demand of Sandalwood oil is projected to reach about 10,000 MT with China alone requiring up to 5000MT by 2040. Due to this gap in Demand and supply, Sandalwood market pricing is projected to increase at an average of 25% per annum. Since nothing goes to waste, including the sawdust, is also marketable. And with current relaxation in Government norms along with boost to promote Sandalwood cultivation it promises to be a very lucrative business proposal.