Until the 20th century, forest policies across the globe focused primarily on effective forest utilization for timber production. Subsequent loss of forest land prompted many countries to review and amend such policies, in an attempt to incorporate the principles of conservation and sustainable forest management. One of the countries to implement such changes was India, which introduced new policies, acts and programmes to regulate forest conversion and degradation, beginning in the 1980s. These policies, acts, and programmes included the Forest Conservation Act of 1980, the National Forest Policy of 1988 and the Hon. Supreme Court Order of 1996. All of these regulations affected the timber supply from government forest areas, and created a huge gap in timber supply and demand. Currently, this deficit is met through imports and trees outside forests (TOFs). Timber production from government forest areas is abysmally low (3.35% of total demand) compared to potential timber production from TOFs, which fulfil 45% of the total timber demand in India. This implies that TOFs have immense potential in meeting the growing timber demand; however, they have not been fully utilized due to discrepancies in state level TOFs’ policies. The present paper provides a review of different forest policies, acts and guidelines in relation to timber production in India, and provides specific recommendations in order to maximize timber production in the context of increasing demand for timber products.