Karnataka had emerged on top with highest compounded annual growth rate (CAGR) of over 18 percent in terms of tractor sales registered during the eight year period of 2004-05 and 2011-12 and remained the only state to have registered higher growth than all-India level (16 percent), according to a recent ASSOCHAM study.
“However, Karnataka is suffering from poor tractor penetration of just about three percent,” noted the study titled ‘Future Outlook for Demand of Tractors in India,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“Haryana and Punjab remained on top with highest tractor penetration of about 27 percent in both the states followed by Uttar Pradesh (23.5 percent), Bihar (20 percent) and Odisha (12 percent),” highlighted the study prepared by the ASSOCHAM Economic Research Bureau (AERB).
Tractor production in India has grown at a CAGR of double digits (10 percent) during decadal period of 2001-02 and 2012-13, noted the study.
Clocking a compounded annual growth rate of over 26 percent during 2003-2013, India had registered third highest growth in exports of tractors after Poland (31 percent) and China (30.5 percent).
However, tractor penetration in India is very low and that might encourage potential demand for tractors.
“Demand for tractors is heavily dependent on agriculture production and level of monsoon received, thus with forecast of normal Monsoon this year production, demand and sale of tractors might improve in the later half of this year,” said DS Rawat, national secretary general of ASSOCHAM.
“India might get normal monsoon rainfall at 102 percent of long-period average during June-September this year,” noted a recently released ASSOCHAM-Skymet Weather joint study.
“However some pockets that might be deficient (by a narrow margin) include Himachal Pradesh, Punjab, Haryana, Uttarakhand, Marathwada, Rayalseema, South Interior Karnataka, North Tamil Nadu and parts of the North East,” noted the study titled ‘Monsoon 2015: Agri-business Risk or Opportunity,’ conducted by ASSOCHAM and Skymet.
Growing at a compounded annual growth rate (CAGR) of over 20 percent, the domestic tractor industry (in volume terms) is likely to cross eight lakh units by the end of this fiscal.
Increasing application of tractors for non-farm operations like infrastructure and construction projects, transportation, haulage and better crop realisation through higher minimum support prices (MSPs) clubbed with continued government support through increase in budget outlays for agri sector and increasing farm labour costs due to scarcity are key growth drivers of tractor industry.
Apart from being used in farming and crop cultivation, tractors find application in activities like harvesting, canal irrigation, land reclamation, drawing water, powering agricultural implements and serves as a multi-utility vehicles, this has expanded the domestic tractor market.