Under the "Multi-Stakeholder Partnership for Forestation", the government proposes to invite bids for areas with a tree cover of less than 10 percent under a contract that will see the paper industry farm trees in return for making paper pulp.

Authorities say the plan will benefit both the environment and industry, as well as provide employment to millions in poor communities who live off meagre forest resources.

But social activists are sceptical. "The forests do not belong to the state or industry and cannot be owned or traded," said Shankar Gopalakrishnan of the Campaign for Dignity and Survival, an umbrella organisation of forest community groups.

"An enormous number of people live off minor forest produce and they will lose their homes and their livelihoods if the big corporates move in and get their way."

EQUAL PARTNERS?

More than 40 million people depend on the country's resource-rich forest areas -- which make up around 25 percent of the landmass -- eking out a meagre living from cattle grazing, collecting firewood and simple farming, activists said.

Analysts say India's economic boom has led to a surge in the number of middle-class consumers who demand paper products like tissue paper, tea bags and filter paper, leading to rising demand for raw materials.

The paper industry, which has been lobbying hard for forest land for years, will gain an assured source of raw material and supporters of the plan say forest dwellers will get the right to be employed first by the industry.

"The local communities would be equal partners and contracts would be negotiated upfront and hardwired into a legal contract which would be enforceable by all sides," said Prodipto Ghosh, India's former environment secretary.

The plan will entail hundreds of thousands of hectares of degraded forests being leased to the paper and pulp sector.

But while the plan mentions safeguarding the traditional rights of local communities, activists say the language is ambiguous and does not provide any guarantees.