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Small and Medium Forest Enterprises (SMFEs) carry out most of India’s forest-based production and processing. While the government owns most forests, the bulk of SMFEs are in the private sector, These SMFEs generate significant employment in India with tens of millions of people working in diverse timber and non-timber forest product sectors. Many products such as medicinal plants also earn valuable foreign exchange. The policy environment in India has historically favoured SMFEs through direct protection and concessions – but this is changing. Simultaneously, access to forests and forest resources has become increasingly difficult. But new opportunities are emerging for household and community level enterprises. The contribution of SMFEs to rural livelihoods merits greater attention – collating scattered information, identifying major constraints and improving the policy environment.