International Trade Dynamics of Agricultural Machinery: A Sectoral Trend Analysis of India

Abstract

The agricultural machinery sector in India has witnessed significant growth over past two decades, playing a crucial role in improving farm efficiency and rural livelihoods. The export of agricultural machinery improves the manufacturing capabilities of the country and earn precious foreign exchange. This study analyses the trade patterns of agricultural machinery from 2000-01 to 2024-25. It also forecasts export and imports up to 2030 using unobserved compound model in SAS software. The analysis covers five major sectors of agricultural machinery, viz., tractors, farm machinery, post-harvest machinery, food processing machinery, and machinery for animal husbandry. During 2000-01 to 2024-25, both export and import of agricultural machinery, including tractors, have grown steadily at a compound annual growth rate (CAGR) of 17.5% and 24%, respectively. In 2000–01, tractors accounted for nearly 85% of total agricultural machinery exports, with only 15% contribution from other equipment. By 2024-25, this share shifted to 74% for tractors and 26% for other machinery such as ploughs, tillers, harvesters, and planting tools. This change indicates a gradual broadening of India’s manufacturing capacity beyond tractors, reflecting positive development in the production of diverse farm machinery. The similar trend was observed in post-harvest machinery, food processing machinery and machinery for animal husbandry. Imports have also increased, reaching nearly ₹60 billion in 2024-25, largely driven by the rising demand for high-tech and crop-specific precision machinery. The forecasted values indicate continuous growth in both exports and imports across all categories of agricultural machinery, however, the growth in export of tractors will lead to trade surplus. The import of tractors is likely to be zero by 2030 due to strong domestic manufacturing capacity. The study also analysed the trend of export and import of agricultural machinery sector in relation to strategic challenges and constraints. There is a need for indigenous development of high-tech machinery, better quality control and targeted export strategies.