Report Overview

India Tractor Market – Industry Trends & Forecast Report, 2030

The India Tractor Market size was estimated at USD 1,935.72 million in 2023. During the forecast period between 2024 and 2030, the India Tractor Market size is projected to grow at a CAGR of 5.55% reaching a value of USD 2,676.82 million by 2030. A prominent driver of the market is the government’s increasing supportive initiatives focused on rural development. India holds a prominent position in the global tractor market, consistently selling between 600,000 to 700,000 tractors annually from 2016 to 2021. Two-wheel drive tractors outpace four-wheel-drive counterparts in popularity within the Indian market. Domination of the agriculture tractor market is evident among indigenous Indian Original Equipment Manufacturers (OEMs), including Mahindra & Mahindra Limited, TAFE, International Tractors Ltd (Sonalika), and Escorts Limited. Despite this, international players, such as Deere & Company and CNH, have also successfully entered the market and established a significant presence. India also remains an attractive tractor market due to the declining availability of farm labor and the emergence of innovative business models like custom hiring solutions for tractors. The government's support, including subsidies under the mechanization component of the agriculture macro-management scheme, further contributes to the sector's growth. Notably, a 25% subsidy, limited to INR 30,000, is provided for the purchase of tractors with up to 35 PTO HP. With sustained government backing and a focus on enhancing farm mechanization and crop production, the agricultural tractor sales are expected to rise during the period in analysis.

India Tractor Market – Overview

The tractor industry serves as a significant gauge for the rural economy in India. While relatively young, the Indian tractor industry has evolved into the largest global market, excluding sub-20 hp belt-driven tractors used in China, representing a substantial one-third of global production. Other key tractor markets worldwide include China and the United States. Historically, prior to 1960, the demand for tractors in India was entirely met through imports. The indigenous manufacturing of tractors commenced in 1961. Although India continued importing tractors to fulfill its needs until the late 1970s, reaching around 50,000 units in the early 1980s, the India Tractor Market has now expanded significantly, surpassing 600,000 units per year.

India Tractor Market

Growth Drivers

Increasing Demand for Food Production

The burgeoning need for enhanced food production propels the thriving India Tractor Market. Fueled by factors like increased Kharif sowing, favorable cash flows, and timely monsoons, the market has shown resilience amid the challenges of COVID-19. Government initiatives in rural development and farm mechanization, coupled with India's global leadership in the tractor market, contribute to its positive trajectory. Recent advancements in farm mechanization, with widespread adoption of tractors, revolutionize the agriculture sector. Stakeholders collaborate to subsidize agricultural mechanization, empowering farmers through easy credit, favorable schemes, and government concessions. The commitment to achieve 4 kW/ha farm power availability by 2030 positions the agricultural machinery market for substantial growth, aligning with India's rising demand for food production.

Challenges

High Initial Investments

The India Tractor Market could face growth constraints due to high initial investment requirements. The substantial upfront costs associated with acquiring tractors pose a challenge for potential buyers. Farmers, particularly those with limited financial resources, may find it daunting to make the initial investment, limiting their access to modern agricultural machinery. This financial barrier can hinder the widespread adoption of tractors, affecting overall market growth in India. Despite the benefits of mechanization, addressing the issue of high initial investment remains crucial to ensuring broader accessibility and fostering the sustained growth of the India Tractor Market.

Impact of COVID-19 on India Tractor Market

COVID-19 pandemic had a positive impact on the India Tractor Market. It is primarily due to heightened demand for agricultural produce including cereals, vegetables, and fruits. The surge in demand for these essential food items resulted in an increased need for mechanized farming, leading to a boost in tractor sales. As the pandemic unfolded, the agricultural sector emerged as a resilient force, driving the tractor industry's growth. This unexpected positive effect showcased the vital role of tractors in meeting escalating food demands during challenging times. The pandemic underscored the significance of mechanization in sustaining agricultural productivity and responding to dynamic market needs in the India Tractor Market.

India Tractor Market

Segmental Coverage

India Tractor Market – By Power Output

Based on power output, India Tractor Market is divided into Less Than 30 HP, 30–50 HP, 51–100 HP, and More Than 100 HP segments. The 30–50 HP segment holds the highest share in the India Tractor Market by power output. In India, there is a growing and consistent demand for tractors with 30–50 HP output, driven by their ability to enhance agricultural productivity and meet demand effectively. These robust tractors are equipped with advanced technology, ensuring exceptional performance even in varying weather conditions. The increasing popularity of 30–50 HP tractors underscores their role in modernizing and optimizing agricultural operations, contributing to improved efficiency and output for farmers.

India Tractor Market – By Drive Type

On the basis of drive type, the India Tractor Market is bifurcated into 2 Wheel Drive and 4 Wheel Drive segments. The 2-wheel driver segment holds a higher share in the India Tractor Market by drive type. In arid farming conditions, two-wheel tractors are widely utilized, especially in fields that are not excessively muddy, sloped, or wet. They prove effective for tasks like seed sowing, fertilizer and pesticide spraying, and pasture topping. Affordable and cost-effective, two-wheeled tractors cater to the needs of small and marginal farmers, who are the largest segment in the Indian agriculture sector. Boasting easy handling and enhanced maneuverability, they ensure comfortable operation. Key players in this domain, including Sonalika, Mahindra and Mahindra, John Deere, Swaraj, and Eicher, focus on research, development, and product launches to bolster their market presence. Despite challenges such as low fuel efficiency and brand availability, advancements in models and their cost-effectiveness are expected to drive segment growth.

India Tractor Market – By Application

By application, the India Tractor Market is divided into Agriculture, Construction, and Mining & Logistics segments. The agriculture segment holds the highest share in the India Tractor Market by application. With approximately two-thirds of India's population engaged in the agriculture and related activities, tractors have become indispensable in the country’s agriculture sector. They contribute essential efficiency and productivity, enabling the country to compete internationally in agricultural activities. Tractors serve as a cornerstone in modernizing and optimizing farming practices, consolidating the agriculture segment's prominence in the Indian Tractor Market.

India Tractor Market – By Region

Regionally, the India Tractor Market is segmented as North India, South India, East India, and West India. The North India and West India regions dominate the tractor market, attributed to the presence of manufacturing units and significant agricultural production. Punjab, Haryana, and Uttar Pradesh follow suit, with state governments actively promoting tractor adoption to stimulate market growth. A pivotal factor in the industry's expansion is the influence of normal monsoons, fostering production and bolstering farmers' income, thereby driving increased tractor demand in key states like Maharashtra, Madhya Pradesh, Bihar, Karnataka, Gujarat, Andhra Pradesh, and Uttar Pradesh. In the Southern region, sustained growth, particularly in Andhra Pradesh, Tamil Nadu, and Telangana, outpaces other regions, propelled by government support programs and improved rural sentiments. Meanwhile, the Eastern region experiences robust volume growth, aided by government initiatives for farm mechanization. In contrast, the Northern region, including key markets like Uttar Pradesh, faces challenges in keeping up with nationwide growth, with certain states such as Rajasthan and Punjab struggling due to weak haulage and replacement demand.

Competitive Landscape

Major players operating in India Tractor Market include Force Motors Limited, CNH Industrial N.V., Escorts Limited, HMT Limited, Deere & Company, V.S.T. Tillers Tractors Ltd, Mahindra & Mahindra Ltd, and Sonalika International Tractors Ltd. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

 Recent Developments

• In October 2023 - International Tractors announced that it had invested INR 1,000 crore in a new plant and R&D operations, unveiling five tractors for international markets, including an all-electric model. The tractors, with power output ranging from 16hp to 125hp, targeted various agricultural needs and boasted advanced technologies and modern design. Also, the company aims to establish a dedicated 100,000-unit export plant by 2025, adjacent to its existing facility in Punjab.

• In September 2023 - Swaraj Tractors, a key player in the India tractor market and part of the Mahindra Group, launched a new range in the 40 to 50 HP category. The tractors aim to address the evolving needs of Indian farmers.

• In August 2023 - Mahindra & Mahindra, India's largest tractor manufacturer, announced its plans to double export volumes to 36,000 units in three years with its new Oja range of lightweight tractors. Targeting 12 new markets, including the ASEAN region and countries like Thailand and Indonesia, the company anticipates a significant boost in overseas sales, catering to a broader global customer base.

Scope of the Report

By Power Output

• Less Than 30 HP

• 30–50 HP

• 51–100 HP

• More Than 100 HP

By Drive Type

• 2 Wheel Drive

• 4 Wheel Drive

By Application

• Agriculture

• Construction

• Mining & Logistics

By Region

• North India

• South India

• East India

• West India

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. India Tractor Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Increasing demand for food production
         2. Rising farm labor costs
      2. Restraints
         1. High initial investment
      3. Opportunities
         1. Seasonal labor shortages
      4. Challenges
         1. High maintenance costs
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. India Tractor Market Overview
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Power Output
         1. Less Than 30 HP
         2. 30–50 HP
         3. 51–100 HP
         4. More Than 100 HP
      2. By Drive Type
         1. 2 Wheel Drive
         2. 4 Wheel Drive
      3. By Application
         1. Agriculture
         2. Construction
         3. Mining & Logistics
      4. By Region
         1. North India
         2. South India
         3. East India
         4. West India
5. North India Tractor Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Power Output
      2. By Drive Type
      3. By Application
6. South India Tractor Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Power Output
      2. By Drive Type
      3. By Application
7. East India Tractor Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Power Output
      2. By Drive Type
      3. By Application
8. West India Tractor Market
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Power Output
      2. By Drive Type
      3. By Application
9. Competitive Landscape
   1. List of Key Players and Their Offerings
   2. India Tractor Company Market Share Analysis, 2023
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Developments (Mergers, Acquisitions, Partnerships, etc.)
10. Impact of Covid-19 on India Tractor Market
11. Company Profiles (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)
    1. Force Motors Limited
    2. CNH Industrial N.V.
    3. Escorts Limited
    4. HMT Limited
    5. Deere & Company
    6. V.S.T. Tillers Tractors Ltd
    7. Mahindra & Mahindra Ltd
    8. Sonalika International Tractors Ltd
    9. Other Prominent Players
12. Key Strategic Recommendations
13. Research Methodology
    1. Qualitative Research
       1. Primary & Secondary Research
    2. Quantitative Research
    3.  Market Breakdown & Data Triangulation
       1.  Secondary Research
       2.  Primary Research
    4.  Breakdown of Primary Research Respondents, By Country
    5.  Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable.

List of Figures

Figure 1       India Tractor Segmentation      

Figure 2       India Tractor Market Value Chain Analysis    

Figure 3       Company Market Share Analysis, 2023

Figure 4       India Tractor Market Size, By Value (USD Million), 2019–2030   

Figure 5       India Tractor Market Share, By Power Output, By Value, 2019–2030   

Figure 6       India Tractor Market Share, By Drive Type, By Value, 2019–2030       

Figure 7       India Tractor Market Share, By Application, By Value, 2019–2030       

Figure 8       North India Tractor Market Size, By Value (USD Million), 2019–2030   

Figure 9       North India Tractor Market Share, By Power Output, By Value, 2019–2030    

Figure 10     North India Tractor Market Share, By Drive Type, By Value, 2019–2030        

Figure 11     North India Tractor Market Share, By Application, By Value, 2019–2030        

Figure 12     South India Tractor Market Size, By Value (USD Million), 2019–2030   

Figure 13     South India Tractor Market Share, By Power Output, By Value, 2019–2030   

Figure 14     South India Tractor Market Share, By Drive Type, By Value, 2019–2030       

Figure 15     South India Tractor Market Share, By Application, By Value, 2019–2030       

Figure 16     East India Tractor Market Size, By Value (USD Million), 2019–2030     

Figure 17     East India Tractor Market Share, By Power Output, By Value, 2019–2030     

Figure 18     East India Tractor Market Share, By Drive Type, By Value, 2019–2030

Figure 19     East India Tractor Market Share, By Application, By Value, 2019–2030

Figure 20     West India Tractor Market Size, By Value (USD Million), 2019–2030    

Figure 21     West India Tractor Market Share, By Power Output, By Value, 2019–2030    

Figure 22     West India Tractor Market Share, By Drive Type, By Value, 2019–2030

Figure 23     West India Tractor Market Share, By Application, By Value, 2019–2030

List of Tables

Table 1        India Tractor Market Size, By Value (USD Million), 2019–2030

Table 2        India Tractor Market Size, By Power Output, By Value, 2019–2030

Table 3        India Tractor Market Size, By Drive Type, By Value, 2019–2030

Table 4        India Tractor Market Size, By Application, By Value, 2019–2030

Table 5        North India Tractor Market Size, By Value (USD Million), 2019–2030

Table 6        North India Tractor Market Size, By Power Output, By Value, 2019–2030

Table 7        North India Tractor Market Size, By Drive Type, By Value, 2019–2030

Table 8        North India Tractor Market Size, By Application, By Value, 2019–2030

Table 9        South India Tractor Market Size, By Value (USD Million), 2019–2030

Table 10      South India Tractor Market Size, By Power Output, By Value, 2019–2030

Table 11      South India Tractor Market Size, By Drive Type, By Value, 2019–2030

Table 12      South India Tractor Market Size, By Application, By Value, 2019–2030

Table 13      East India Tractor Market Size, By Value (USD Million), 2019–2030

Table 14      East India Tractor Market Size, By Power Output, By Value, 2019–2030

Table 15      East India Tractor Market Size, By Drive Type, By Value, 2019–2030

Table 16      East India Tractor Market Size, By Application, By Value, 2019–2030

Table 17      West India Tractor Market Size, By Value (USD Million), 2019–2030

Table 18      West India Tractor Market Size, By Power Output, By Value, 2019–2030

Table 19      West India Tractor Market Size, By Drive Type, By Value, 2019–2030

Table 20      West India Tractor Market Size, By Application, By Value, 2019–2030

Table 21      Force Motors Limited Company Overview

Table 22      Force Motors Limited Financial Overview

Table 23      CNH Industrial N.V. Company Overview

Table 24      CNH Industrial N.V. Financial Overview

Table 25      Escorts Limited Company Overview

Table 26      Escorts Limited Financial Overview

Table 27      HMT Limited Company Overview

Table 28      HMT Limited Financial Overview

Table 29      Deere & Company Overview

Table 30      Deere & Company Financial Overview

Table 31      V.S.T. Tillers Tractors Ltd Company Overview

Table 32      V.S.T. Tillers Tractors Ltd Financial Overview

Table 33      Mahindra & Mahindra Ltd Company Overview

Table 34      Mahindra & Mahindra Ltd Financial Overview

Table 35      Sonalika International Tractors Ltd Company Overview

Table 36      Sonalika International Tractors Ltd Financial Overview