India Agricultural Machinery Market Outlook to 2028

India Agricultural Machinery Market Overview

The India agricultural machinery market is valued at USD 16 billion, based on a five-year historical analysis. This growth is primarily driven by the governments strong push for agricultural mechanization, increasing demand for food production, and the rising need for efficiency in farming practices. The continued adoption of advanced machinery such as precision agriculture tools and automated equipment is facilitating faster farming cycles, resulting in higher yields and productivity across the country.

The dominant regions in the market include states like Punjab, Haryana, Uttar Pradesh, Maharashtra, and Tamil Nadu. These regions dominate the market due to their large-scale agricultural operations, well-established irrigation systems, and the strong presence of commercial farming practices. Additionally, the availability of government subsidies and initiatives like Make in India and Atmanirbhar Bharat have accelerated mechanization in these areas, further consolidating their leadership in the market.

The Indian government allocated 1,41 crores in 2023 to this scheme, aiming to promote mechanization in the country. Through SMAM, many machines were distributed to small and marginal farmers in 2023. This initiative aims to increase mechanization from the current 40% to 60% in the next five years, improving productivity levels.

India Agricultural Machinery Market Segmentation

By Product Type: The market is segmented by product type into tractors, harvesters, irrigation machinery, planting & fertilizing equipment, and soil preparation machinery. Tractors hold a dominant share in the market. The reason behind this is the growing adoption of multi-purpose tractors across diverse farming landscapes, from smallholder farms to large estates. Brands like Mahindra and TAFE have established themselves with reliable product offerings that cater to varied horsepower requirements, especially for small and medium farms where tractors below 50 HP are the most sought-after.

By Power Output: The agricultural machinery market is also segmented by power output into machines with less than 20 HP, 2050 HP, 50100 HP, and more than 100 HP. The 2050 HP segment is the most dominant in India, primarily due to the prevalence of small and medium-sized farms across the country. These tractors and machines offer the perfect balance between power and affordability, making them ideal for Indias farming landscape.

India Agricultural Machinery Market Competitive Landscape

The market is dominated by a few major players, including Mahindra & Mahindra, Escorts Group, and TAFE, among others. These companies leverage their extensive distribution networks, strong research and development capabilities, and established brand presence. Additionally, their localized manufacturing facilities, catering to specific regional needs, have cemented their leadership in the market.

Company

Establishment Year

Headquarters

Product Range

Revenue (INR Bn)

Market Share (%)

Global Presence

Employees (No.)

R&D Investment (INR Bn)

Manufacturing Units (No.)

Mahindra & Mahindra Ltd.

1945

Mumbai, India

Escorts Group

1944

Faridabad, India

TAFE (Tractors and Farm Equipment)

1960

Chennai, India

John Deere India Pvt. Ltd.

1998

Pune, India

CNH Industrial India Pvt. Ltd.

1999

Gurgaon, India

India Agricultural Machinery Market Analysis

Market Growth Drivers

Mechanization of Indian Agriculture: Indian agriculture is transitioning towards higher levels of mechanization, as highlighted by the increase in tractor sales, which surpassed 1.1 million units in 2023. The expanding demand for agricultural machinery is attributed to the need to improve efficiency, given the limited availability of manual labor in rural areas. The governments focus on increasing food grain production to over 320 million metric tons by 2025 is also driving this mechanization.

Increasing Land Fragmentation: As landholdings in India become more fragmented, the demand for small and medium-sized agricultural machinery has surged. Small farm equipment sales grew by over 150,000 units in 2023, driven by the necessity to work efficiently on smaller plots. This trend is fueled by the structural nature of Indian agriculture, where nearly 86% of farmers operate on landholdings of less than two hectares.

Government Subsidy Programs: The government of India has significantly increased its financial support for farmers to adopt mechanized tools. The Pradhan Mantri Kisan Tractor Yojana, for instance, provided financial assistance to over 500,000 farmers in 2023 to purchase tractors. Additionally, more than 200,000 farmers received assistance for other agricultural equipment such as harvesters and plows, stimulating demand for agricultural machinery.

Market Challenges

Limited Access to Financing: Even though there are government schemes to provide financial assistance, the availability of formal credit remains limited. Data from the Reserve Bank of India (RBI) revealed that only 37% of Indian farmers had access to institutional credit in 2023, leading to lower uptake of modern machinery, especially for marginalized farmers.

Inadequate After-Sales Service: A lack of proper maintenance and after-sales service infrastructure, especially in remote areas, has led to underutilization of machinery. Many agricultural machines become non-operational due to poor maintenance, with reports showing that over 10% of equipment in the northern states was out of service in 2023, affecting overall productivity.

India Agricultural Machinery Market Future Outlook

Over the next five years, the India agricultural machinery industry is expected to experience growth, driven by favorable government policies, increasing mechanization in agriculture, and technological advancements such as automation and precision farming. The rising demand for food due to population growth, coupled with the need for increased efficiency in farming operations, will further fuel the adoption of advanced agricultural machinery.

Future Market Opportunities

Increased Demand for Electric and Hybrid Agricultural Machinery: Over the next five years, the demand for electric and hybrid tractors is expected to rise. By 2028, sales of electric tractors are anticipated to reach 20,000 units per year, driven by stricter emission norms and the government's focus on reducing carbon emissions in agriculture.

Precision Agriculture and Automation: Automation will play a more prominent role in Indian agriculture, with autonomous tractors and robotic harvesters becoming more common. By 2028, it is estimated that 10,000 autonomous tractors will be operational in India, revolutionizing the way large-scale farms operate and reducing reliance on human labor.
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