HEADLINES:  

The Indian tractor industry experienced strong volume growth during FY10-FY12. Though tractor volumes remained robust through most of FY12, the domestic tractor market is showing some signs of weakness of late. Some of the favorable aspects for the Indian tractor industry are support from the Government of India towards rural development and agri-mechanisation, scarcity of farm labour, increase in credit flow to agriculture, increase in non-agri application of tractors, besides healthy export sales.

On a regional basis, the western and southern parts of the country have performed above par while the eastern and central parts of the country have reported reduced growth figures in FY12. Furthermore, the northern region, which is the largest tractor market of the country, grew at a healthy pace during the period.


The demand outlook from southern India continues to be robust over the medium term. During this financial year, Indian tractor manufactures witnessed margin contraction in light of continued hardening of rubber and steel prices.

Overall ICRA believes that over the short to medium term the tractor industry is likely to face the challenges of moderation in growth rates on one hand and large capacity additions on the other. The industry expects tractor volumes to slowdown, resulting in a volume growth of 10-11% in the coming years.

  INDIAN tractor Industry AT A Glance IN 2011 - 2012

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