Craterellus inusitatus is currently only known from Kerala state, India. At the moment it is only known from two sites, but there are areas of suitable habitat in the surrounding region and into adjacent parts of Tamil Nadu. Assuming a wider distribution the population size is estimated to fall in the range 12,500-45,000 mature individuals all in one subpopulation, but if it were to be more highly restricted the population size could even fall beneath 1,000 mature individuals. Ongoing forest loss may be impacting the species, but it appears adaptable, with several potential host plants. Therefore, a continuing decline is only tentatively suspected. Even though the best estimate population size does not meet the threshold for consideration as threatened, it is only just above this threshold at the lower end of the estimate and there is uncertainty over the full distribution of the species such that this itself may be an overestimate. Therefore, a relatively precautionary approach is taken and C. inusitatus is assessed as Near Threatened under criterion C2a(ii).

Most collections of this species come from the Jawaharlal Nehru Tropical Botanic Garden and Research Institute campus in Palode, Kerala, India, with an additional record from Kulathupuzha, Kerala (Bijeesh et al. 2018). It is known from several collections, all between from August to October 2017 (see Bijeesh et al. 2018). Based on these known records it is possible that the species may be more widespread in suitable habitat in the surrounding area such the protected areas of Shendurney Wildlife Sanctuary and Agasthyamalai Biosphere Reserve.

While the species is found under protection in the Jawaharlal Nehru Tropical Botanic Garden and Research Institute campus, and its distribution likely includes additional areas of habitat under protection, there has been a low level of forest cover loss within its range (see World Resources Institute 2023), which might indicate a decline. However, it also has a range of potential host species (see Bijeesh et al. 2018) and so may be more adaptable. A precautionary approach is taken and a slow decline is tentatively suspected.

Based on collections at the type locality, depending to what extent collections were made from the exact same functional individual, the timing of collections suggest at least five to nine functional individuals may occur at that site. Per Dahlberg and Mueller (2011), each functional individual would equate to 10 mature individuals, thus this site would contain 50-90 mature individuals. Scaling up to include potential areas of suitable habitat in the surrounding region, could increase this value by 250-500 times. Which would give an overall population size of 12,500-45,000 mature individuals, all in one subpopulation. Further research is required to gain a clearer understanding of the full range of the species, as this could be a large over-estimate of the population size, and if it were indeed more restricted to the immediate area around the two known collecting sites then the population size could be a lot lower (i.e. fewer than 1,000 mature individuals).

This ectomycorrhizal fungal species occurs in tropical evergreen forest. Its sporocarps has been found in scattered groups, being formed on rocks, soil and herbaceous plants, including on the leaves of Pothos scandens, on an exposed root of Hopea parviflora, and on the seedlings of Vateria indica and H. parviflora (Bijeesh et al. 2018). Fruiting has been observed August–November (Bijeesh et al. 2018).

There is ongoing loss of forest cover within the range of this species, but it is only at a very low rate (e.g. Kollam District lost only 1.1% of its primary forest between 2001 and 2022; see World Resources Institute 2023). Key potential drivers of such forest loss, as highlighted by one of its potential host species, Vateria indica, are urbanisation, agricultural expansion and logging (Dhyani and Barstow 2020). Further research is needed in order to confirm whether these threats are likely to significantly affect Craterellus inusitatus.

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This species occurs under protection in the Jawaharlal Nehru Tropical Botanic Garden and Research Institute campus, and may occur in additional adjacent protected areas and other appropriate potential forest habitats. Further research into this species’ habitat preferences, potential threats, and wild distribution is required.