Farm mechanization: Key market research findings
- Inflow of FDI spurs market growth
- Tractor segment accounts for a majority of the market’s revenue
- Key vendors – John Deere, Mahindra, TAFE, and International tractors
Technavio’s market research analysts predict the farm mechanization market in India to grow at a CAGR of around 8% between 2016 and 2020. The market’s growth is fueled by the increase in foreign direct investment (FDI) inflow in the agricultural sector. To increase agricultural production and boost the efficiency of the Indian agriculture system, the government of India has allowed 100% FDI in many agricultural activities. Furthermore, the government of India announced 100% FDI in processed food retailing to help set up food-only retail outlets in February 2016. This helps create FDI flow in the food multi-brand retailing sector and reduces the number of intermediaries in the food processing value chain as farmers will engage directly with retail stores.
The new market research report from Technavio presents a breakdown and analysis of the farm mechanization segments based on the product.
“The market is currently witnessing the introduction of several smart farming initiatives. Many villages in India, especially in the states of Punjab and Haryana, are part of the climate-smart agriculture project run by the Research Program on Climate Change, Agriculture, and Food Security. The project aims to make agriculture sustainable and resilient to climate changes. It also focuses on increasing farm income and food production,” says Abhay Sinha, Lead Analyst, New Coverage, Technavio Research.
The tractor segment of the market is expected to reach $8 billion by the end of the forecast period. High growth of this segment can be attributed to India’s position as one of the key tractor manufacturers in the world. The growth of the rural sector supported by government subsidies for food, fertilizers, agricultural equipment, and programs to waive farm loans are expected to contribute to the growth of the tractor market in India in the coming years.
The key vendors in the farm mechanization market in India include John Deere, Mahindra, TAFE, and International tractors. The farm mechanization market in India is highly fragmented owing to the presence of diversified global and regional vendors. However, as the international vendors are striving to increase their footprint in the market, the local vendors are finding it increasingly difficult to compete with them in terms of quality, technology, and pricing. The market has the presence of many vendors that provide plowing and cultivation machinery at lower costs. The competitive environment in this market will intensify further with an increase in product and service extensions, technological innovations, and M&A.
A more detailed analysis is available in the Technavio report, Farm Mechanization Market in India 2016-2020.
We can customize reports by other regions and specific segments upon request.
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