The domestic tractors sales registered a healthy growth of 12.2% in FY23 normal monsoons and good water reservoir levels, continued government focus on various schemes and subsidies for farming, and ease in financing availability. However, the sales declined by 2% in Q1FY24 compared to Q1FY23 due to below-normal monsoons and hence subdued demand from the agriculture segment.
According to Tanvi Shah, Director of CareEdge Advisory & Research, “The domestic tractor industry growth is expected to moderate to 3%-5% in FY24, on the back of the high base of last year and increasing commercial demand for tractors with the government’s infrastructure push and higher construction activity. However, the demand from the agriculture segment is expected to remain subdued due to below-normal and erratic monsoons across the country affecting food crops and rural income. The deficit rainfall in eastern and southern India, as well as the flooding in certain parts of north India, could further accentuate inflationary pressures thereby impacting tractor sales in the near term.”
The sector continues to benefit from government support through various schemes like Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri Krishi Sinchayee Yojana and the launch of ‘Made in India’ farm machinery products. The Ministry of Agriculture & Farmers Welfare is also promoting farm mechanization through various schemes and programmes to increase in farm efficiency.