India Agricultural Tractor Market – Key Highlights
- The Indian agricultural tractor market is projected to witness a CAGR of 8.9% during the forecast period 2022- 2027.
- Government initiatives regarding rural development and farm mechanization and various factors, such as high rural wages and scarcity of farm labor, are likely to increase the tractor volume over the long term. In terms of units, India is one of the largest tractor markets globally, selling 600,000 to 700,000 tractors per annum, on average.
- The agricultural tractor market in India is consolidated and dominated by large global and domestic manufacturers, and farmers prefer trusted brands for assurance of quality and better after-sales services. Mahindra & Mahindra Ltd is the leading player occupying the highest share in the Indian agricultural tractors market, followed by Tractor and Farm Equipment Ltd (TAFE), International Tractor Ltd, and Escorts Limited.
- Two-wheel drive tractors are found to be more popular than four-wheel-drive tractors in the Indian market. The two-wheel-drive tractors are cost-effective and affordable for small and marginal farmers, who are prominent in the Indian agriculture sector.
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Indian Government Initiatives Boosting Growth
India remains a highly lucrative tractor market because of the decreasing availability of farm labor and the rise of innovative business models, such as custom hiring solutions for tractors. In India, under the mechanization component of the macro-management scheme of agriculture by the Indian government, there is a provision of subsidy for promoting agricultural mechanization, including 25% of the cost limited to INR 30,000 for buying tractors of up to 35 PTO HP. Thus, with the rising government support for enhancing farm mechanizations and expansion in crop production, the sale of agriculture tractors is anticipated to rise in the upcoming years.
Easy availability of credit to farmers is made possible through many financial institutions, and these are led by favorable government policies and subsidy programs. Various loan schemes, easy breakdown of installments as per crop cycles, and low-interest rate plans generate funding for mechanization. As per NABARD norms, any farmer with 8 acres of land can take a tractor loan to be paid over nine years, with 12.5% interest over the principal amount. Various concessions from the Indian government, like exemption of excise duty for tractors less than 1800 cc of capacity, have helped small farmers purchase the machine. In order to offer loans to a higher number of small and marginal farmers, the government has also reduced the minimum land holding from 10 acres to 4 acres over the years, and the credit period has been increased from 7 to 9 years.
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Recent Developments in the India Agricultural Tractor Market
- In February 2021, TAFE, manufacturer of Massey Ferguson tractors, launched its new DYNATRACK Series, an advanced range of tractors that offer dynamic performance, sophisticated technology, unmatched utility, and versatility, all engineered into a single powerful tractor.
- In 2020, Mahindra launched the new Sarpanch Plus Tractor series in Maharashtra, India. This tractor offers 2 HP (1.49kW) more power, higher max torque, and backup torque to cover more land quickly and comes with Mahindra’s industry-first 6-year warranty.
- International Tractors Limited-owned Sonalika Tractors launched a field-ready electric tractor for the domestic market called Tiger Electric.
Related Research and Links
- India Agricultural Machinery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
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List of Key Players in the India Agricultural Tractor Market
- Mahindra & Mahindra Limited
- John Deere India Private Limited
- CNH Industrial (India) Pvt. Ltd
- TAFE Ltd
- International Tractors Limited (Sonalika)
- Escorts Group
- Kubota Corporation
- Force Motors Limited
- Preet Tractors (P) Limited
- Standard Corporation India Limited
*List Not Exhaustive
Mordor Intelligence has segmented the India Agricultural Tractor Market based on engine power, drive type, and application:
- Engine Power (Market Size & Forecast based on Value (USD million), 2017-2027)
- Less than 30 HP
- 31-50 HP
- 51-80 HP
- Above 80 HP
- Drive Type (Market Size & Forecast based on Value (USD million), 2017-2027)
- Two-wheel Drive
- Four-wheel Drive
- Application (Market Size & Forecast based on Value (USD million), 2017-2027)
- Row Crop Tractors
- Orchard Tractors
- Other Applications
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