About 54% of the total geographical area of the Northeast is covered by forest. The percentage is highest in Mizoram (75.59%) and lowest in Assam (39.15%). The figures for other states are: Arunachal Pradesh (61.55%), Manipur (67.87%), Tripura (60.00%), Nagaland (52.02%), and Meghalaya (42.34%). In interior areas, timber and minor forest produce are the principal source of livelihood. Selling firewood to those requiring the same for cooking purpose augments their meagre incomes from other source. Immigrants and denudation of shifting or jhum cultivation have encroached upon forests in many tribal areas. There has been a net depletion rather than net addition to the area under forest cover. The ownership pattern of forest differs in the different states. In the hilly region, the ownership rests with the local communities and, therefore, the proportion of reserved forests in those hilly states is quite small.

Utilisation of forest resources in the region is maximum in Assam where there are over 40 plywood-producing units besides a large number of saw mills. It appears that more plywood units were allowed to be set up than what the forest resources could sustain on a long-term basis. So much so, that in view of the alarming rate of extraction of timber and resulting deforestation in the forests in Upper Assam and Karbi Anglong as also south-east of Arunachal Pradesh, the requirement of logs for the plywood units of Assam are now met mostly from impors from foreign countries. Regeneration of forests in specific areas and planned extension would be needed in states like Assam, Meghalaya and parts of Arunachal Pradesh in order to meet the requirements of industry and to maintain ecological balance.