This paper analyses social, economic and ecological issues affecting sustainability of the four selected forestry clean development mechanism (CDM) projects from India. Data from the group discussions and stakeholder interviews suggest that three out of the four projects are economically unsustainable for local people because of high opportunity cost of land and labour, and delayed and low benefits. The average opportunity cost of the land is 20000, 12000 and 9000 INR/ha/year in case of Haryana, Himachal Pradesh and Tamil Nadu, India projects respectively, which is unlikely to be met through projected carbon revenues and other benefits. A significant number of farmers have already withdrawn their private lands in Haryana and Tamil Nadu projects. Very few of them have undertaken plantations on the private lands in the Himachal project. All the four projects have undertaken block plantations of predominantly fast growing species such as Eucalyptus (Eucalyptus hybrid), Casuarina (Casuarina equisettifolia) and Ailanthus (Ailanthus excelsa) for high growth and quick returns, which could have adverse social and ecological impacts over long term. There are social and institutional issues such as low participation of local communities, weak or non existing community institutions, inflexible design and rigid CDM rules, which affect sustainability of these projects. It has implications for other carbon forestry programmes such as Green India Mission and Reducing Emissions from Deforestation and Degradation (REDD+) being rolled out at a large scale in the country. The rationale and significance of these programmes needs to be objectively reexamined in context of the issues affecting CDM projects.