 "Why are India’s tractor exports soaring? Which countries are making the most buys?")
India’s tractor exports are through the roof. On Thursday, commerce and industry minister Piyush Goyal tweeted that India’s exports of tractors registered a spectacular growth of 224 per cent in April-July 2022 over the same period in 2013.
This impressive feat comes amid Prime Minister Narendra Modi’s ‘Make in India’ push and in the backdrop of the automobile industry’s struggles during the COVID-19 pandemic with domestic tractor volumes in recovery mode after moderate sales over the past few months. Let’s take a closer look: Facts and figures India’s tractor industry gets 10 per cent of its revenue from exports, as per Economic Times.
The total value of tractor exports is estimated at more than $1 billion.
As per Hindu Business Line, tractor exports crossed the one-lakh yearly mark for the first time in February. India in August 2021 alone exported 11,760 tractors, as per Economic Times. Total tractor exports stood at 10,490 units as compared to 9,234 units in January 2021 and 11,186 units in December 2021. During April 2021-January 2022, exports grew 54 per cent to 106,957 units against 69,421 units in the same period of the previous fiscal. And the trend looks set to continue. In June, tractors sales remained at peak levels with shipments abroad hitting a record high at 12,849 units. The previous high was in September 2021 when tractor exports stood at 12,690 units. Tractor exports remain at 10,000 plus levels for 13 straight months, as per the report. Who are the top buyers? As per NewsNCR, the top buyers are America (25.2 per cent), Nepal (7.3 per cent), Bangladesh (6.5 per cent), Thailand (5.4 per cent) and Sri Lanka (5.3 per cent). Brazil and Turkey also account for a major chunk, as per Economic Times. Why are tractor exports up? The support of the Centre is a big factor. As per NewsNCR, since 2014 the government has taken several proactive and effective steps to boost India’s exports. [caption id=“attachment_10076151” align=“alignnone” width=“640”]
Prime Minister. ANI[/caption] A new Foreign Trade Policy (FTP) 2015-20 launched on 1 April 1, 2015 rationalised the earlier export promotion schemes. Two new schemes: Goods Exports from India Scheme (MEIS) to improve export of goods and Services Exports from India Scheme (SEIS) to increase exports of services were also introduced, as per the report.
Duty credit scrips issued under these schemes were made fully transferable.
Mid-term review of Foreign Trade Policy (2015-20) was undertaken in 2017 and corrective measures implemented. The period of Foreign Trade Policy (2015-20) was extended to 2022 keeping in mind the COVID-19 pandemic. A new logistics division was created in the Department of Commerce for the integrated development of the Logistics Sector. In order to provide cheaper loans to exporters, interest equalisation scheme on Rupee export credit has been implemented with effect from 1 April, 2015 , on pre-shipment and post-shipment rupee. The Centre further assisted Micro, Small and Medium Enterprises (MSMEs) through adaptation programmes, counseling sessions, personal facilitation etc. on various aspects of foreign trade to enable them to enter international trade, as per the report. The Centre also implemented a slew of projects including the Export Bandhu Scheme, Business Infrastructure for Exports Scheme (TIES) and Market Access Initiative (MAI) Scheme to protect and promote exports from India. ‘Beyond expectations’ Gaurav Saxena, president and CEO, international business, Sonalika Tractors, told Economic Times one of the reasons for the growth in exports is the government’s support for agriculture in those countries where farm mechanisation and food security have larger interest. Saxena was quoting as saying by Economic Times, “…the trend of surge in tractor exports has been seen in Europe and America where our volumes and demand has gone beyond expectations.” Sonalika Tractors has assembly plants outside India and has been into tractor exports for the past 10 years. Explaining the importance of exports in business, Saxena said, “If something happens in the Indian market, another country’s sales can support the business. So it is always good to have an export business and not have over-dependence on one market.” Saxena also said another cause could be attributed to the particular range of tractors. In India, the demand for tractors ranges up to 60 horsepower (HP) and the major demand comes from 30-60 HP tractors, explained.
However for exports, demand ranges below 30 HP and above 60 HP, he added.
“Initially, we did not have the range for tractors which is suitable outside India. Now we have a strong product lineup below 30 HP and above 60 HP as well, going up to 120 HP. Likewise, many manufacturers have developed the competencies and product range which are suitable for the markets outside,” he said. Indian farms are becoming smaller because the population is growing and families have divided the farms among them, he added. But outside India, farms are huge and follow corporate farming so people are using bigger machines. Thus they need better technology, more comfortable cabins and AC-fitted tractors. Such products have given us good growth, he said. “In five years, I expect that this market of exports should grow up to almost 2 lakh tractors which is almost double the present levels,” Saxena added. With inputs from agencies Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .