Led by Diwali, which begins with Dhanteras later this month, manufacturers expect sales momentum to return in the current month. Advancing for four straight years from FY20, tractor sales in India ended FY23 with a record 944,000 units, up 12% YoY. Domestic tractor sales in October dropped 5% to 117,714 units from 123,526 in the same period a year ago, according to data from Tractor Junction, an online aggregator for tractor and farm equipment.
September-November is the peak period for tractor sales as farmers harvest their kharif (post-monsoon) crops, while preparing to sow for the next season. If the kharif crop output and prices are good, they would be encouraged to invest in tractors for the coming rabi planting season.
However, the country’s rice production — which is the main kharif crop — is estimated to drop 3.79% to 106.3 million tonnes in the kharif season of the 2023-24 July-June crop year due to poor rainfall in key growing states, according to the agriculture ministry’s latest estimates.
“The rural demand is a running concern. The government’s projection of the lower kharif crop (rice) output only mounts the concerns. The decline in tractor sales for the last two months and year-tomonth is an indication of stress. I don’t see the situation in rural India improving unless something dramatic happens in the next couple of months,” said Madan Sabnavis, chief economist at Bank of Baroda.
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