India to tap growing tractor market in Latin America

New Delhi | Updated: March 05, 2019 4:36 PM

Indian tractors are equipped with a digital dashboard, attractive design and modernity necessary to meet the demands.

agriculture, agriculture sectorExports from Indian tractor have increased from last decades in Mexico, Argentina and Brazil.

By Sandeep Wasnik

Brazil, Argentina, and Mexico are big agriculture market in Latin America. The annual agricultural commodities exports in 2017 across Brazil, Argentina, Mexico, Chile and Peru accounted for over billions of USD dollars which is only possible by modern machines technology in which, the tractor is one of them.

Exports from Indian tractor have increased from last decades in Mexico, Argentina and Brazil. But Indian Tractor Manufacturers and Exporters also need to focus on other countries in the region, like Colombia, Chile, Ecuador, Peru, Paraguay, Bolivia and Uruguay. These markets have good opportunities for Tractor market. Where Colombia is fourth largest producer of coffee, banana, rice, corn and others. Chile is good for Grapes, Corn, wheat and have mines and Mineral. Ecuador is good for Banana, Flowers and Cocoa. Peru is good in paprika, bananas, citrus and avocado.

Exports of Indian tractor from Year 2014 to 2018 (HS : 8701 “Other than tractor of heading 8709”) as shown in Chart, which is clearly shown Year 2018 Indian Tractor’s Export to LAC in Values US-$, were Mexico – $ 41.35 Million, Argentina – $ 7.41 Million, Colombia – $ 2.96 Million, Chile – $ 6.18 Million, Ecuador – $ 1.16 Million, Peru – $ 2.04 Million, Paraguay – $ 3.94, Brazil – $ 4.01 Million, Bolivia – $ 0.84 Million and Uruguay – $ 1.11 Million.

The rising demand of 40HP to 100HP (horsepower) tractors across the region will create lucrative opportunities for Indian tractor manufacturers in Latin American markets. Indian tractors are equipped with a digital dashboard, attractive design and modernity necessary to meet the demands.

Export market or consumption climate in Latin America can be easily identified by tractor segments, according to its Horse Power (HP) and Wheel Drive (2WD or 4WD). Indian tractor manufacturers keep focusing on the precision of agriculture so the tractors equipped with smart technologies, such as sensor technology, GPS and Climate Satellites.

Nowadays by using the Smartphone, a tractor can easily drive. Indian tractor manufacturers are also focusing on developing tractors with alternative fuels such as bio-diesel and electric or battery-operated machines to attract new consumers. Alternative fuel sources will help the Indian tractor exporter to gain a larger market share of Latin America as well as generates good revenues.

Also read: PM Shram Yogi Maandhan: Modi launches pension scheme for unorganised sector; key things to know

Brazil is the largest exporter of coffee soybeans, crop-based ethanol, cotton, corn, rice and sugarcane in the world and is the second-largest region after the US in tractor sales across the world market. With the introduction of “Emission Standard” MAR-1, it will help manufacturers to launch new agricultural machines in the Brazilian market which can be the Indian Tractors Market Hub in LAC. For instance, Brazilian government subsidies will drive the growth of the tractor market in Latin America during the forecast period until 2023.

Tractor market in Latin America is expected to reach volumes of around 87,000 units by 2023 growing at a CARG of more than 4% from 2018 to 2023.

The author is chairman, Atlassons Business Services Private Limited.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Fuel, base effect : WPI inflation hits series high, CPI at 6-month peak
2Schism in GST Council out in the open
3UN Trade Forum event: Decouple trade policy from green goals: Goyal