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India stands second worldwide for Farm outputs. The share of agriculture in India’s GDP has reached 19.9% for the first time in the last 17 years, making it the sole bright spot in GDP contribution and employing 41.49% of the workforce in 2020.
Agriculture was largely insulated from the lockdown in India as timely and proactive exemptions from COVID-induced lockdowns to the sector facilitated uninterrupted harvesting of crops. However, supply chain disruptions impacted the flow of agricultural goods.
Mechanization of agriculture enhances productivity, besides reducing human drudgery and the cost of cultivation. Mechanization also helps in improving the utilization efficiency of other inputs like the safety and comfort of the agricultural worker.
Total farm mechanization in India has been lower at 40-45% compared to other countries such as the USA (95%), Brazil (75%) and China (57%). The government has decided to enhance farm power availability from 2.02 kW/ha (2016-17) to 4.0 kW/ha by the end of 2030 to cope with increasing demand for food grains.
The farm mechanization market in India has been growing at a CAGR of 7.53 per cent during 2016-2020 due to thrust given by various government policies
Long back then in 1961, the annual production of tractors was 880 units per year and major manufacturers were Eicher, Gujrat tractors, TAFE, Escorts and M&M. Credit facilities for farmers continued to improve and the tractor market expanded rapidly with the total use passing the half million mark by 1980 to about 700000 units per year in 2020. Today about 20% of world tractor production is carried out in India.
India’s growth is unmatched even with the country’s long history of tractor manufacturing and various policies adopted by the government to enable it to effectively meet the demand.
95% of tractor sales are on credit. Credit is extended by Commercial banks, state land development banks and regional rural banks.
Most companies use Constant Mesh transmission and prefer center Shift, these types of tractors have about 60% market share, For quieter operation, more durability and less maintenance. Over the past two years, manufacturers have been less involved in the innovation of powertrains and more concentrated on improving product portfolios like live monitoring and Diagnostics tools in instrument clusters.
Mahindra & Mahindra Ltd and Mitsubishi of Japan to develop four new platforms for tractors ranging from 13HP to 70HP.
Tractors and Farm Equipment Limited (TAFE), and IIT-Kanpur, India will together be developing technology for tractor engines that can run on Dimethyl Ether (DME), rather than fuels like diesel and petrol. DME is clean burning and non-toxic, and is potentially renewable fuel.
The minimum lifting capacity of PTO pumps in India varies from 750Kgf to 3650Kgf because this feature is very important in India as tractors are used for non-agricultural purposes also.
TAFE and New Holland procure their tractor engines from Simpsons and Fiat Powertrain Technologies (FPT). Mini & Compact tractors with their power ranging from 15Hp to 50Hp have a market share of almost 90% in India.
Here is a list of the top 10 tractors in India in 2020:
Indian tractor market is the second biggest market worldwide which accounts to one-third of the global production. China and the United States of America are the other major tractor markets in the world. The market share of less than 20 HP tractors doubled in recent years and the segment has seen much technological advancement.
Sales within India closed at 802,670 units in 2020, 11 % higher than 2019 volumes and 1 % more than the previous all-time record, set in 2018 during a pandemic year.
Mahindra & Mahindra- the market leader recorded an average sales growth of >15% post-lockdown every month and their total market share declined 2% in 2020 compared to 2019.
TAFE had an 18% market share and a rise of 15.6% in sales. But, the top 3 market leaders- Mahindra & Mahindra, TAFE and Sonalika have a combined market share of over 72%.
Even during this economic slowdown, the stand-out performer in the Indian tractor Industry was Japan-based Tractor manufacturer- ‘Kubota’ which grew its sales by 18% and a market share of 0.44%.
Based on the last 5 Financial Years, Mahindra & Mahindra holds the top position in its market shares at around 39%. Sonalika has a market share of 15% and had a growth of 40.5% in 2020 compared to 2019. Kubota is the stand-out performer with a 1.8% share in the market considering the company arrived in 2016.
The farm tractor market in India is estimated at $XX Million in 2020 growing at –4.5% CAGR till 2025.