Water availability is the central limiting factor for vegetation carbon allocation in semi-arid forests. However, the sensitivity of this relationship likely varies as a function of total tree cover and tree diversity. In the present study, a set of re-measured semiarid forest plots in India were analysed to test how sensitive biomass, productivity and soil organic carbon (SOC) accumulation were to variability in precipitation from plot-level and remote sensing solar-induced fluorescence (SIF) measurements. Variability in mean precipitation at zones I and II impacted tree density, recorded as 150 and 400 trees ha(-1) respectively. Results show that low tree cover plots had lower woody biomass NPP (NPPwood) and lower SIF sensitivity to inter-annual variation of precipitation. Increment in NPPwood over a five-year period was significantly smaller (P < 0.05) in zone I (0.21 Mg ha(-1)year(-1), CI95, 0.14-0.28) than at zone II (2.44 Mg ha year(-1), CI95, 1.43-3.45). Mean annual SOC increment at 0-5 cm depth varied between 0.13 and 0.75 Mg ha year(-1) across the study area. Results highlight the importance of tree cover diversity in modulating the response of semi-arid forests to carbon storage across a precipitation gradient.