Agricultural Export Market in India 2023-2028

Agricultural Export Market in India 2023-2028

Agricultural equipment reduces manual labour efforts in farming activities. Traditional farming methods include ploughs, tillage, and seeders, which are being replaced with multiple modern types of machinery such as spraying equipment, hay, and forage equipment, harvesters, and irrigation and crop processing equipment. Crop productivity is in direct correlation with farm mechanization, which saves labor costs and time, brings down production costs in the long run, reduces drudgery, curtails post-harvest losses, boosts crop output, and enhances farm income.

The export of agricultural machinery in India was valued at ~USD 1,0005 Mn in FY 2021. The export of non-tractors however witnessed a CAGR of 12.87% during the same period. The growth is restrained due to the limited external as well as internal demand of non-tractor machinery. To stimulate domestic manufacturing for export purposes, India has strengthened its agricultural machinery export sector through the establishment of free trade agreements, both bilateral and regional, with nations including the United Kingdom, the United Arab Emirates, Algeria, Argentina, Bangladesh, and several others.

India predominantly ships its agricultural machinery to the United Kingdom, the United States, and the United Arab Emirates, securing its position among the prominent exporters of agricultural machinery. Denmark, Spain, Hungary, and Lithuania are other major destinations for the export of agricultural machinery and its parts.

Market drivers:

The growing participation of corporations in farming via contract farming agreements has led to a demand for increasing overall farm output. This led to a surge in the use of machinery in the field, promoting mechanization in countries developed as well as developing countries. This creates a crucial demand market for modern farming machinery in these countries leading to increased exports from countries including India.

Government Initiative:

The government is actively promoting agricultural exports through various measures. Several states have developed state-specific action plans to boost agricultural exports including assigning nodal agencies for agricultural exports and formation of State Level Monitoring Committees (SLMCs) to oversee export-related activities. The government has also introduced a Central Sector Scheme known as the Transport and Marketing Assistance for Specified Agriculture Products to support the international freight costs associated with exporting agricultural products.