Ideas That Generate Results

Tractor Exports Sales Touching New Heights

Feb 15, 2006

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India has come a long way in the agriculture sector and has witnessed numerous changes with the introduction of new and improved farming techniques, mechanized tools and enhanced irrigation methods implemented by Indian agriculturists. These developments raised agricultural productivity and led to a substantial increase in the supplies of various agricultural products for export markets rather than for own consumption by the farm households.

The Indian farming sector employs over 256 million labor force, making it one of the largest employers. At the same time, the share of agriculture in total GDP of India has fallen with the current contribution standing at about 23%. In the last financial year (2003-04), the agricultural exports totaled up to $6506 million and are expected to increase by 1.1% in the present year. The share of agricultural exports in the total annual export of the country is about 13-18%.

Owing to an excellent monsoon, the Indian economy is developing rapidly regardless of the falling contribution of the agriculture sector to the Indian GDP ratio. The agriculture equipment sector is also witnessing an upward growth due to the timely, good monsoon.

India is the world’s second largest maker of tractors, which form one of the most important agriculture equipments. The New Industrial Policy has de-licensed the manufacture of tractors in India and since 1970 the production of tractors has been witnessing steady growth. Tractor manufacture is now firmly established in India and is highly competitive with rapid advances being made in technical design and quality with increasing attention to export markets. The growth in the sales of tractor touched an all time high in the last five years to about 30% in 2004-05 at 249,000 units, inclusive of exports. This is in comparison to 191,000 units in the previous year.

According to a latest market research report by RNCOS – a leading market research report company, the sale of tractors in the first seven months (April 05-October 05) of the present fiscal year climbed up to nearly 15% annually with total sales touching 161,155 units as against 140,186 units, last year.

The report “Indian Auto Industry Market Overview” published by RNCOS reveals some surprising facts about the domestic market. Although Punjab and Haryana are the agriculture centers of the country, the South Indian state of Tamil Nadu witnessed a record growth with nearly a 100% rise in sales in 2004-05, followed by Karnataka at 87%, Gujarat registering 69%, Maharashtra at 66% and Orissa at 62%.

The export of tractors recorded a healthy growth of about 27%, rising from 13581 units in 2002-03 to 16,000 units in 2003-04. The existing average sized tractors at 30-40 HP rules the roost with 60% market share; the 40 HP and above, and the 30 HP units capturing 23% and 17% of the market share respectively.

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