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India Agricultural Machinery Market Trends

Statistics for the 2023 & 2024 India Agricultural Machinery market trends, created by Mordor Intelligence™ Industry Reports. India Agricultural Machinery trend report includes a market forecast to 2029 and historical overview. Get a sample of this industry trends analysis as a free report PDF download.

Market Trends of India Agricultural Machinery Industry

Increasing Focus on Farm Mechanization

  • In India, agriculture is the primary income source for nearly half the population and supplies raw materials to various industries. As the production of grains, cereals, and oilseeds rises, there's a growing demand for modern farm equipment. This equipment helps manage heavy harvesting operations, minimizes waste, and boosts yields. The Agricultural and Processed Food Products Export Development Authority (APEDA) reported that in the 2023-2024 financial year, India produced approximately 304.3 million metric tons of cereals, including rice, wheat, barley, millet, and ragi. Being the world's second-largest producer of rice and wheat, India is increasingly turning to farm mechanization to sustain its high yields.
  • As workforce preferences shift from traditional farming to allied sectors, India faces a persistent labor shortage for intensive agricultural operations. This trend is exacerbated by rapid urbanization, with many moving to cities. World Bank data highlights this shift: employment in agriculture dropped from 45% in 2020 to 43% in 2022. Given this labor crunch, the demand for farm equipment is poised to rise in the coming years.
  • Moreover, challenges like the need for timely farm activities and the narrow window for these operations underscore the urgency for mechanization. With mounting pressures to boost production amidst a steady labor shortage, the emphasis on farm mechanization is set to grow in the coming years.
India Agricultural Machinery Market: Employment in Agriculture, in %, 2021-2022

Tractor Segment to Drive the Indian Agricultural Machinery Market

  • India stands as one of the world's top producers of tractors, making the tractor segment the primary driver of the Indian agricultural machinery market. Tractors are pivotal in numerous agricultural tasks, from plowing and sowing to harvesting and transportation. Their rising adoption can be attributed to government subsidies, enhanced affordability, and a growing farmer awareness of mechanization's advantages. As reported by the Federation of Automobile Dealers Associations (FADA), tractor sales in India reached around 915 thousand units in 2023.
  • The tractor segment's prominence in India's agricultural machinery landscape stems from its versatility across varied farming conditions. With the ability to operate numerous implements, tractors have become indispensable for farmers, regardless of scale. Affordable financing options have further broadened tractor accessibility. Highlighting this, the central government introduced the Pradhan Mantri Kisan Tractor Yojana in 2022, granting a 50% subsidy on tractor purchases. In 2024, the National Bank of Agriculture and Rural Development (NABARD) unveiled a scheme offering a 30% subsidy for tractor acquisitions.
  • These government incentives have propelled tractor sales by 28.6% from 2020 to 2023, underscoring India's pivot towards mechanized farming. This shift is largely fueled by escalating labor costs and a quest for heightened efficiency. With continued government backing for agricultural modernization, the tractor market is poised for sustained growth. Coupled with rising farmer incomes and an expanding expanse of farmland, these factors are set to bolster the trajectory of Indian agriculture.
India Agricultural Machinery Market: Sales of Tractors, in Thousand Units, 2022-2023

Agricultural Machinery In India Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)